On The Money: Powell, Mnuchin stress limits of emergency loans | House seeks to salvage vote on spending bill | Economists tell lawmakers: Kill the virus to heal the economy
Happy Tuesday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
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THE BIG DEAL— Powell, Mnuchin stress limits of current emergency lending programs:
Federal Reserve Board Chair Jerome Powell and Treasury Secretary Steven MnuchinSteven Terner MnuchinShutdown clash looms after Democrats unveil spending bill Lawmakers fear voter backlash over failure to reach COVID-19 relief deal United Airlines, unions call for six-month extension of government aid MORE told lawmakers Tuesday that the struggles faced by thousands of small businesses and some hard-hit sectors are beyond the scope of lending authorities.
In Tuesday testimony before House lawmakers, Powell and Mnuchin asserted that the Fed and Treasury lack the legal or logistical abilities to expand certain emergency lending programs to a wider range of borrowers.
- The Fed and Treasury are facing rising pressure from both Democrats and Republicans to broaden the scope of programs meant to help businesses and local governments secure enough cash to stay afloat and prevent layoffs until the economy recovers.
- Those programs are backed by $454 billion allocated by Congress through the $2.2 trillion March economic rescue bill, much of which has gone unused.
Even so, Powell and Mnuchin argue that direct fiscal support from Congress may be the only solution to bolster the smallest U.S. businesses and certain industries, even as such support has become increasingly unlikely to reach President TrumpDonald John TrumpBubba Wallace to be driver of Michael Jordan, Denny Hamlin NASCAR team Graham: GOP will confirm Trump’s Supreme Court nominee before the election Southwest Airlines, unions call for six-month extension of government aid MORE’s desk before Election Day.
“There is a lot of work to do there and our policies will support that, but it will go faster for those people if it’s all of the government working together,” Powell told the House Financial Services Committee. I have more here.
LEADING THE DAY
House moves toward spending vote after bipartisan talks: House Democrats are aiming to vote Tuesday evening on legislation to avert a government shutdown after rekindling talks with Republicans and the Trump administration over disputed farm assistance.
- The House was originally slated to vote Tuesday afternoon on legislation advanced solely by Democrats.
- But multiple aides said those plans were temporarily put on hold as bipartisan talks resumed over aid for farmers impacted by the coronavirus pandemic and nutrition assistance for children in low-income families.
House Majority Leader Steny HoyerSteny Hamilton HoyerWhite House opposes House energy bill as Democrats promise climate action This week: Supreme Court fight over Ginsburg’s seat upends Congress’s agenda House Democrats postpone vote on marijuana decriminalization bill MORE (D-Md.) said the two sides are ”close” to a deal on government funding and could vote on an amended bill as soon as Tuesday night.
“I’m hopeful that we may be able to move it tonight,” Hoyer told reporters, noting that ”if we have a deal and people want to cooperate, it won’t be that late.” Here’s more from The Hill’s Cristina Marcos.
The race to avoid a shutdown: Time is running short to strike a deal. There are only eight days left before current federal funding expires and the government would shut down on Oct. 1 if Congress doesn’t pass a spending bill in time.
The conflict: House Democrats introduced legislation on Monday that would extend government funding through Dec. 11, but it does not include a provision requested by the White House to ensure farm aid payments continue past the $30 billion borrowing limit of the Commodity Credit Corporation (CCC).
Democrats have been opposed to including the CCC funding in the stopgap spending bill, arguing that it amounts to a “political slush fund” to soften the impact of the president’s trade policies.
Economists spanning spectrum say recovery depends on containing virus: A panel of economists and experts from across the political spectrum on Tuesday testified that controlling the coronavirus was the most important step to boosting the economy.
- “Normally economists would propose economic policies, but I think most of the economists are proposing public health policies, like getting more mask wearing, getting more testing and tracing,” said Austan Goolsbee, who chaired the White House Council of Economic Advisers for President Obama, at a Joint Economic Committee hearing on COVID-19 and the economy.
- Ashish K. Jha, the dean of Brown University’s School of Public Health, took aim at the common narrative that steps to control the virus were necessarily going to take a bite out of the economy. “There is no trade-off between controlling the spread of this virus and economic health,” he testified.
The Hill’s Niv Elis takes us there.
Trump administration reimposes ‘public charge’ rule following court victory: The Trump administration will begin to retroactively apply its controversial “public charge” rule to immigrants, following a court decision that lifted a nationwide injunction on the policy.
Under the rule, any immigrant who receives at least one designated public benefit — including Medicaid, food stamps, welfare or public housing vouchers — for more than 12 months within any three-year period will be considered a “public charge” and will be more likely to be denied a green card.
The rule would make it easier for immigration officials to deny entry or legal status to people likely to rely on government assistance. The Hill’s Nathaniel Weixel explains here.
GOOD TO KNOW
ODDS AND ENDS
- The Pentagon redirected most of its $1 billion in pandemic funding to defense contractors, The Washington Post reported on Tuesday.
- New York prosecutors suggested President Trump and his businesses could be investigated for tax fraud and insurance fraud, according to a court filing submitted Monday.
- U.S. Gross Domestic Product (GDP) will be 1 percent smaller than it would have been otherwise in 2050 because of climate change, according to a new projection from the nonpartisan Congressional Budget Office (CBO).