After several weeks of negotiations, an agreement was reached Sunday, December 20 in the United States Congress between Democrats and Republicans to vote a new plan to support the economy, announced the Republican leader of the Senate, Mitch McConnell. It remains, however, to finalize the text of this agreement and to avoid last-minute obstacles, he noted.
→ READ. United States: Congressmen ready to vote on aid plan
This $ 900 billion (734 billion euros) support plan for businesses and households in difficulty includes measures for the distribution and logistics of coronavirus vaccines, as well as additional unemployment benefits of $ 300 (245 €) per week and direct checks to families of $ 600, or half of the amount granted in March 2020 under the CARES law (Coronavirus Aid, Relief, and Economic Security Act).
Compromise on central bank loans
The blockage was not on financial support to individuals and businesses at the heart of the aid plan, but on the role of the central bank (Fed) and its ability to set up emergency lending programs without the Congress approval. The Republican Party was seeking to limit its ability to provide credit to businesses and other institutions, saying the Democratic Party was trying to use the legislation to create a “Slush fund” for the local communities they control.
For Democrats, restricting the powers of the central bank could worsen the fiscal crisis and hamper the new Biden administration’s ability to stimulate the struggling US economy. Under the deal, the Fed will be able to set up these types of loans in the future, but will need approval to restart existing programs under the CARES law promulgated in March, once they will expire at the end of this year.
A group of Republican elected officials led by Pennsylvania Senator Pat Toomey invented this partisan ploy to hinder the future Biden administration, suspected of wanting to use the Fed’s money-making ability to bypass a Republican-controlled Senate. Their initial proposal would have resulted in giving Congress veto power over the Fed.
Does the compromise obtained in the snatch prefigure the kind of relationship that could be established between the Democratic president and the Republican elected representatives of Congress after January 20, once Joe Biden installed in the White House?
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The answer lies, at least in part, in the result of the second round for the two senators’ seats in Georgia, scheduled for Tuesday, January 5. It would be enough for one of the two outgoing Republican senators to win to secure the Republican majority in the Senate, already strong of 50 seats, against 48 in the Democrats.
Conversely, a double Democratic victory would give Kamala Harris, Joe Biden’s vice president and statutory president of the Senate, a casting vote in a tied upper house.