Mr Toomey and his Republican allies argued that his initial proposal only codified what Congress intended in March when it enacted the $ 2.2 trillion pandemic stimulus bill, which affected funds to support the Fed’s emergency lending programs. But the reach of the language proposed by Mr Toomey went beyond that, raising alarm among Democrats, who said they were enlisting prominent figures to lobby against it.
Ben S. Bernanke, who led the Fed during the 2008 financial crisis, issued a statement warning that it was “vital that the Federal Reserve’s ability to respond quickly to damaging credit market disruptions is not constrained.” .
Referring to the March stimulus bill, Bernanke added: “The relief bill should at least ensure that the Federal Reserve’s emergency lending authorities, as they stood before the adoption of the CARES law, remain fully intact and available to respond in the future. crises. “
Mr Schumer said Jerome H. Powell, the current Fed chairman, whom he called “hardly a fiery liberal”, was “strongly opposed” to Mr Toomey’s proposal. The Fed declined to say whether Mr. Powell, a Republican who was first appointed central bank governor by former President Barack Obama, had discussed the issue with Mr. Schumer in recent days. Mr Schumer’s office did not respond to a request for more details.
In a private call with House Democrats on Saturday, President Nancy Pelosi of California denounced the proposal, telling lawmakers that “for them to write in there that it can never happen again is just beyond pale, ”according to a caller, who disclosed the comments on condition of anonymity.
“It’s a way for them to say to Joe Biden, ‘We are binding your hands. No matter what happens on the pike, you can’t do that, ”Pelosi told Democrats.
Mr Toomey denied he was seeking to hamper the Biden administration and pointed out that he had sought for months to stop the Fed’s pandemic programs. But the language he proposed to attach to the stimulus package was broader than that.