Sen. Pat Toomey said Monday he opposed the extension of Federal Reserve lending programs, which came to be a major sticking point in the deal for the $900 billion coronavirus stimulus package because the United States is not in a state of financial emergency that requires such a broad lending program, and because such legislation should be passed by Congress first.
“These are unprecedented, extraordinary powers, and they’re only justifiable in a real emergency,” the Pennsylvania Republican told CNBC's Squawk Box, explaining that he'd agreed to them in March as part of the first relief package "because I thought we were in such an emergency. We are clearly not in a financial crisis at this point.”
The economy is continuing to recover from the pandemic, except for in some areas such as hospitality and travel, the senator said, and that means economic assistance programs should be more targeted.
The deal that was reached winds down lending programs created by the March CARES Act by the end of the year, will repurpose more than $400 billion that is left over, and stops identical provisions from being restarted. In exchange, Toomey agreed to drop broad language in his plan to prevent the Fed chair from establishing similar facilities in the future, reports Reuters.
However, Toomey said he's willing to allow the Fed to start wide-ranging lending programs again should the economy's conditions hit another sharp decline
Toomey, who has indicated he will not run for reelection in 2022, said he would be willing to allow the Fed to reestablish wide-ranging lending programs should economic conditions deteriorate in the future.
“If we get back to a terrible circumstance next year or 10 years from now and the Fed and the Treasury come together and say, ‘Hey, this is the kind of facility we need,’ I would support that under the right circumstances,” the senator, who is not seeking reelection in 2022, said. "It shouldn’t be a sort of permanent vehicle that’s there for some politicians to decide, ‘Let’s take this over and start doing subsidized loans.’”
Sandy Fitzgerald ✉
Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics.
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