COVID-19

Fed pandemic lending programs a sticking point in COVID relief talks

Nancy Marshall-Genzer Dec 18, 2020
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The Fed programs include Main Street business loans and purchases of corporate and municipal bonds. Pictured: Fed Chair Jerome Powell at a House committee hearing on Dec. 2, 2020. Pool/Getty Images
COVID-19

Fed pandemic lending programs a sticking point in COVID relief talks

Nancy Marshall-Genzer Dec 18, 2020
Heard on:
The Fed programs include Main Street business loans and purchases of corporate and municipal bonds. Pictured: Fed Chair Jerome Powell at a House committee hearing on Dec. 2, 2020. Pool/Getty Images
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Republicans and Democrats are set for more bargaining Friday to see if new COVID relief in the $900 billion range is still possible before year’s end. How long might extra federal money for unemployment go on into the spring?

And something else that’s contentious involves the future role of America’s central bank, the Federal Reserve. A group of Senate Republicans wants the COVID relief bill to specifically prohibit the Fed from restarting its pandemic lending programs or creating anything like them in the future.

The Fed programs include Main Street business loans and purchases of corporate and municipal bonds. Republicans say Democrats could pressure the Fed to revive the programs and use them to bail out mismanaged cities and corporations. Democrats say a ban on pandemic lending now could make it impossible for the Fed to start emergency lending programs in the future to backstop the economy without congressional approval.

In spite of protests from the Fed, the Treasury Department cut off money for most of the COVID lending programs, insisting they stop at the end of this year as scheduled.

COVID-19 Economy FAQs

Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?

This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.

Could waiving patents increase the global supply of COVID-19 vaccines?

India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.

Can businesses deny you entry if you don’t have a vaccine passport?

As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.

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