Coronavirus stimulus: Fed Chair Powell says Congress dithering risks 'creating unnecessary hardship'
Federal Reserve Chairman Jerome Powell warned of the risks of limited government support to American households, businesses, and the economic recovery as Congress continues to try to reach a new economic agreement and renew aid provisions.
"Too little support would lead to a poor recovery and create unnecessary trouble for households and businesses," Powell said at a conference of the National Association of Business Economics on Tuesday. "Over time, household and corporate bankruptcies would increase, affect the productive capacity of the economy and curb wage growth."
Treasury Secretary Steven Mnuchin and Federal Reserve Board Chairman Jerome Powell (R) testify during the Senate Banking, Housing and Urban Affairs Committee hearing on Sept. 24 (Photo by Drew Angerer / POOL / AFP).
Powell welcomed the government's relief efforts under the CARES Act, saying it was "by far the largest and most innovative fiscal response to an economic crisis since the Great Depression". Under the CARES Act, Americans received a one-time incentive payment and an additional $ 600 per week unemployment benefit, among other things, to provide "vital support" to households.
However, many of the key provisions of this relief have expired, and Powell stated that "the recovery will be stronger and faster if monetary and fiscal policies continue to work side by side to support the economy."
It did so when House Speaker Nancy Pelosi (D-Calif.) And Treasury Secretary Steven Mnuchin recently returned to the negotiating table in hopes of drafting laws that would pass both the Democratic-controlled House and the GOP-controlled Senate could. But after a meeting and numerous phone calls, the two have not yet reached an agreement.
At least 33 states have disbursed all funds available under the Lost Wages Assistance (LWA) program. (David Foster / Yahoo Finance)
"Collaborate and do"
The recent $ 2.2 trillion coronavirus stimulus proposal by the Democrats, which was passed by Parliament last week, still has a much higher price tag than the White House proposal, which is around $ 1.6 trillion. Dollar amounts. In addition to the price, there are sticking points such as additional unemployment benefits, funding for schools, aid to state and local governments, assistance with childcare, funding for increased testing and tracking, and funding for other funds.
Read More: Here's What You Need To Know About Eligibility for Unemployment Benefit
The president, who has been pushing for a much higher price tag, reiterated his support for a stimulus agreement in which he said the country wants and needs stimulus and called on the two parties to "work together and get it done" on a project tweet on Saturday .
The urge to reach an agreement comes less than a month before the election. Lots of lawmakers are returning to their districts and the Senate will close until October 19 after several GOP lawmakers test positive for COVID-19.
Even if an agreement is reached between the White House and the Democrats, the question remains whether or not it will pass through the Republican-controlled Senate.
"Just because the deal between Mnuchin and Pelosi and McConnell was reached on this matter doesn't mean it will be law," Mark Harkins, former congressional officer and senior fellow at the Government Affairs Institute in Georgetown, told Yahoo Money. "It has to get 60 more votes in the Senate, which means at least 13 Republicans have to say 'yes' to that."
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Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova.
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