Biden and his economic team are urging swift action on the stimulus as the risks increase


Mr. Powell, who told lawmakers that the Fed would have preferred to continue these lending programs while acknowledging that it was up to Mr. Mnuchin to decide, painted a more horrific picture of the economic outlook. He pointed to the continuing uncertainty about the pace of vaccine deployment, the reality that millions would be left out of work, and that small businesses could fail in the winter months.

“We have a long way to go,” Mr. Powell said. “We will use our means until the danger is well and truly over, and this may require other parts of the government, including Congress.”

Republicans are insisting that the economy recover and the U.S. doesn’t have to borrow more money for another big aid package, while Democrats insist it needs a big stimulus, and now is not the time to worry about deficits.

“The reason for this is that states and municipalities need to have balanced budgets, but we can afford to have a deficit to deal with crises and emergencies, as we have in the past,” Mr. Biden said. “We need to keep vital public services going, we need to provide support to local and state governments to ensure they have law enforcement officers, firefighters and instructors, as we did in 2009.”

After months of stalemate on Capitol Hill, a bipartisan group of senators tried to move things forward with a $ 908 billion compromise stimulus proposal, funded in part by money that Mr. Mnuchin withheld from Fed loan programs.

The proposal, led by two centrists – Joe Manchin, a West Virginia Democrat, and Susan Collins, a Maine Republican, and a handful of senators on both parties was not publicly supported by California House Speaker Nancy Pelosi or Mr. McConnell. .

It was planned to run until March as a temporary measure and restore federal unemployment benefits that expired in the summer, but in half, providing $ 300 a week for 18 weeks and not including another round of control for every American. The measure would provide $ 160 billion to a fraction of the budget ruins of state, local and tribal governments – a fraction of what Democrats were looking for. This included $ 288 billion to help small businesses, restaurants and theaters, and a short-term federal liability defense against corona virus lawsuits.