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Stimulus Compromise Doesn’t Resolve Fed Emergency Powers Debate

  • Republicans, Democrats have different view of what Fed can do
  • Opposing views set up future clashes over Fed authority
Pandemic Relief Deal Near As Lawmakers End Fed Impasse
Photographer: Ting Shen/Bloomberg

A compromise reached during pandemic relief talks over restrictions on the Federal Reserve doesn’t resolve differences in how Republicans and Democrats view its emergency lending authority, setting up a potential clash over how the central bank is able to respond to future crises.

Senator Pat Toomey, a Republican from Pennsylvania, insisted on tacking a provision onto the $900 billion stimulus plan that would prohibit the Fed from restarting programs supporting corporate bonds, small and mid-sized companies, and municipalities, which are set to expire on Dec. 31.