Biden and economics team call for swift stimulus action as risks rise

Mr Powell, who told lawmakers the Fed would have preferred to maintain these lending programs while acknowledging that it was for Mr Mnuchin to decide, painted a darker picture of the economic outlook. He pointed to the lingering uncertainty about the speed of a vaccine deployment, the reality that millions of people remain out of work and the fact that small businesses could go bankrupt during the winter months.

“We have a long way to go,” said Powell. “We will use our tools until the danger is well and truly past, and that may also require help from other parts of government, including Congress.”

Republicans insist the economy is recovering and the United States doesn’t need to borrow more money for another big relief plan, while Democrats insist that a strong stimulus is needed and now is not the time to worry about deficits.

“There is a reason why states and localities need to have balanced budgets, but we are allowed to have a deficit to deal with crises and emergencies like we have done in the past,” Mr. Biden. “We need to keep vital public services running, providing support to local and state governments to make sure they can have law enforcement, firefighters and educators like we did in 2009. . “

After months of deadlock on Capitol Hill, a bipartisan group of senators tried to get things done with the $ 908 billion compromise stimulus proposal, funded in part by reallocating money Mr. Mnuchin had recovered from Fed loan programs.

The proposal, led by two centrists – Senators Joe Manchin, Democrat of West Virginia, and Susan Collins, Republican of Maine – and a handful of senators from both parties, has not been publicly endorsed by either President Nancy Pelosi of California nor by Mr. McConnell. .

Designed as an interim measure to last until March, it would reinstate federal unemployment benefits that expired over the summer, but at half the rate, providing $ 300 per week for 18 weeks, and does not include another round of checks for every American. The measure would provide $ 160 billion to help state, local and tribal governments face fiscal ruin – a fraction of what Democrats had been looking for. It also included $ 288 billion to help small businesses, restaurants and theaters, as well as short-term federal liability protection against coronavirus lawsuits.