Millions of US citizens who have got into financial hardship due to the corona pandemic can breathe a sigh of relief. After months of dispute, a cross-party agreement was reached on a gigantic new aid package.
After months of fighting, Democrats and Republicans in the US Congress have agreed on a further stimulus package to cushion the effects of the corona pandemic. That said the Republican majority leader in the US Senate, Mitch McConnell, and the Democratic minority leader, Chuck Schumer. Aid amounting to nearly $ 900 billion is planned.
Among other things, an increase in unemployment benefits and a direct one-time aid payment of 600 dollars for many citizens are planned. Aid for crisis-ridden companies is also planned as well as money for schools, the healthcare system and tenants who are threatened with eviction.
Transitional funding for one day
On Sunday evening, the House of Representatives passed transitional financing for one day to prevent the government from running out of money for a short time and a so-called shutdown – i.e. a partial standstill in government business. The Senate should also vote on the short-term financing before the deadline set for this expires at midnight (local time). The vote on the budget law package and the new Corona aid package could then follow in the course of Monday in Congress.
According to the “Wall Street Journal”, an agreement was also reached on the powers of the US Federal Reserve (Fed) during the pandemic. The Fed could continue to issue emergency loans without parliamentary approval. However, you would need the permission of the MPs to extend existing programs under the so-called Cares Act.
Dispute over Fed powers
The Republicans wanted to restrict the powers of the central bank to lend to companies and institutions. They feared that this way the US Democrats could channel funds to governments under their control in the US states. Democrats argued that restricting Fed powers would prevent President-elect Joe Biden’s new administration from stimulating the economy.
The outgoing US President Donald Trump wrote to the online service Twitter immediately before the agreement was announced: “Why is Congress not giving our people an economic stimulus program?”
Democrats and Republicans had been wrestling for another aid package for months. Since March, the US Congress has already launched stimulus packages with a volume of around three trillion dollars, which corresponds to more than ten percent of the economic output of the USA.
