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Referring to the March stimulus law, Mr. Bernanke added, “The relief act should ensure, at least, that the Federal Reserve’s emergency lending authorities, as they stood before the passage of the CARES Act, remain fully intact and available to respond to future crises.”
Mr. Schumer said that Jerome H. Powell, the current Fed chairman, whom he called “hardly a flaming liberal” was “strongly opposed” to Mr. Toomey’s proposal. The Fed declined to a comment on whether Mr. Powell, a Republican who was first nominated as a central bank governor by former President Barack Obama, had discussed the issue with Mr. Schumer in recent days.
On the private call with House Democrats on Saturday, Ms. Pelosi denounced the proposal, telling lawmakers that “for them to write in there that this cannot happen ever again is just beyond the pale,” according to a person on the call, who disclosed the comments on the condition of anonymity.
“It’s a way for them to say to Joe Biden: ‘We are tying your hands. No matter what comes down the pike, you can’t do this,’” Ms. Pelosi told Democrats.
Mr. Toomey defended the provision, arguing that Democrats had pushed for very generous terms on the municipal program in particular, with an eye on helping state and local governments gain access to cheap financing. Republicans have long objected to providing a direct stream of aid to state and local governments, and Democrats are seeking to provide relief through other avenues.
“Some of my colleagues want to morph these facilities into a use that was never intended for them,” Mr. Toomey said. “Fiscal and social policy is the rightful realm of the people who are accountable to the American people, and that’s us — that’s Congress.”
Mr. Toomey denied that he was seeking to hamstring the Biden administration, and pointed out that he had for months sought to ensure that the Fed’s pandemic programs sunset. But the language he has proposed to attach to the stimulus plan has been more expansive than that.
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