Democratic leaders oppose an ambitious Republican proposal to spend up to $ 500 billion on loans to various industries, from airlines and energy companies to automakers, as part of a stimulus package against coronaviruses.
In the aftermath of this and other disagreements, Democratic leaders say they do not have a deal until a key procedural vote at 3 p.m. Sunday to proceed with consideration of the package.
“From my point of view, we are separated,” Speaker Nancy PelosiNancy PelosiDemocrats move forward with Jan. 6 inquiry, eyeing new GOP reinforcements GOP banks polish the mark with Pelosi veto Meghan McCain on Pelosi, fights McCarthy: “I think they’re all bad” MORE (D-Calif.) Said Sunday morning before entering a meeting with the Senate Majority Leader Mitch mcconnellAddison (Mitch) Mitchell McConnell SE Cupp: “Politicization of science and health security has undoubtedly cost lives” Poll: Possible Sununu-Hassan clash in NH is deadlock Business groups urge lawmakers to s ” stick to the bipartite agreement on PLUS infrastructure (R-Ky.), Democratic Leader in the Senate Charles SchumerChuck Schumer administration Biden stokes frustration with Canada Schumer blames McCarthy for picking people who “supported the big lie” for Biden’s late January 6 obstruction decision: a semblance of principle at work PLUS (NY) and parliamentary minority leader Kevin mccarthyKevin McCarthyDemocrats Move Forward with Jan. 6 Inquiry, Consider Further GOP Reinforcements GOP Banks Polish Mark with Pelosi Veto Meghan McCain on Pelosi, Fights McCarthy: “I Think They’re All Bad” MORE (R-California).
secretary of the treasury Steven mnuchinSteven MnuchinThe Hill’s Morning Report – Brought to you by Goldman Sachs – Biden rallies Senate MPs behind gigantic spending plan Mnuchin dodges CNBC questions about whether Trump is lying about Democrats who are justified in obstructing the GOP, says Schumer MORE, who is pushing the massive injection of cash into the Federal Reserve’s lending program, also attended the meeting in McConnell’s office.
Democrats say the business bailout fund is insufficient in several ways.
They argue that it is not enough to demand that companies keep their employees on the payroll, urging them to keep employees only “to the extent possible” which could lead to mass layoffs after companies have accepted billions of dollars in loans guaranteed by taxpayers.
Democrats responded by proposing that business loans could be canceled if large companies such as United Airlines, which has seen its market share drop in recent weeks, retain more than 90% of their workers during the crisis.
They also balk at the proposal’s weak restrictions on restricting business takeovers, which Mnuchin can waive.
U.S. airlines, for example, have spent tens of billions of dollars in recent years on share buybacks to raise their stock prices. American Airlines alone has spent $ 12.4 billion on share buybacks since 2014.
The proposed loan program would give Treasury Secretary Steven Mnuchin and the Federal Reserve wide discretion to grant loans to industries that have been hit hard by the sharp drop in economic activity.
The bailout fund, which the Republican Senate bill initially set at $ 208 billion, would extend beyond the airline industry, which has seen its shares collapse in recent weeks, to other industries facing a credit crunch due to the health crisis.
Mnuchin argued on Sunday that the proposed $ 500 billion credit to the Treasury Department to create a capital reserve fund for the Fed would maximize the amount of liquidity that Fed Chairman Jerome Powell can inject into the markets of capital.
“We will have up to $ 4 trillion in cash that we can use to support the economy. And that’s – these are large-scale Section 133 lending programs. We can leverage our equity by working with the Federal Reserve, “Mnuchin said on” Fox News Sunday, “referring to a section of the Federal Reserve Act that gives the agency broad power. grant loans to borrowers who cannot get loans.
But Democrats argue the fund has few restrictions, giving the Treasury Department and Federal Reserve broad discretion to make loans, possibly even for President TrumpDonald Trump’s new Capitol Hill police chief to resume overnight health care on Friday: Biden officials say there are no changes to masking guidelines yet Missouri Supreme Court rules in favor of expansion of Medicaid | Mississippi Attorney General asks Supreme Court to overturn Roe v. Wade Michael Wolff and the art of monetizing gossip MOREits own hotel and real estate empire.
Democrats also want to extend the proposed cap on executive pay for companies that receive bailout loans beyond the two-year deadline suggested by Republicans.