WASHINGTON • United States senators have broken through an impasse over a Republican effort to curtail the powers of the Federal Reserve, clearing away what had been seen as the final hurdle to a deal on a US$900 billion (S$1.2 trillion) stimulus package.
With time running out for a compromise, Republican Senator Patrick J. Toomey agreed to narrow his efforts to rein in the central bank, according to three aides familiar with the discussion.
The three aides, speaking on condition of anonymity, noted that the precise language was still being finalised.
Mr Toomey had sought to bar the Fed and Treasury Department from setting up any loan programme similar to those established this year, but has not agreed to an agreed-upon alternative.
The deal late on Saturday was a critical breakthrough for lawmakers who have been racing to complete the emergency plan to rush direct payments, unemployment benefits, and food and rental assistance to millions of Americans, as well as provide relief to businesses and funds for vaccine distribution.
While negotiators were still wrangling over a number of smaller issues, the Federal Reserve language had emerged as the thorniest sticking point to a final agreement, before the deadline yesterday evening in order to avoid a government shutdown.
"If things continue on this path, and nothing gets in the way, we'll be able to vote tomorrow (Sunday)," Democrat Senator Chuck Schumer, the minority leader, told reporters as he left the Capitol shortly before midnight on Saturday.
President Donald Trump, who has been absent from the frenzied negotiations on the measure, weighed in on Twitter, exhorting Congress to "Get it done" and provide "more money in direct payments".
The emerging deal would send direct payments of US$600 to many Americans and provide enhanced federal jobless payments of US$300 per week until early spring.
It would also provide hundreds of billions of dollars to prop up small businesses, schools and other institutions struggling amid the pandemic.
With government funding set to lapse yesterday and both chambers hoping to merge the stimulus package with a catch-all measure to cover all federal spending for the remainder of the fiscal year, time was dwindling to finalise the recovery plan and rush it to Mr Trump's desk.
Without action by Congress, two programmes designed to expand and enhance unemployment benefits are set to expire in the coming days, leaving about 12 million Americans without federal support.
A number of other benefits are set to expire at the end of the year.
The Fed rolled out a wide-ranging suite of emergency loan programmes in response to market disruptions in March and April, and Congress allotted US$454 billion to back up those efforts in the first pandemic stimulus law, enacted in March.
But Mr Toomey remained concerned for months that the programmes might last past the end of the year. Under the compromise, Fed emergency programmes would not be stopped from lending to states or medium-sized businesses in the future, as long as the design of the programmes was somewhat different, the people said.
Mr Toomey had been particularly concerned that Democrats might harness the Fed's powers to funnel cheap money to state and local borrowers.