The deal would maintain the central bank's ability to set up emergency lending programs without congressional approval
US lawmakers agreed on pandemic spending powers for the Federal Reserve late on Saturday, the Wall Street Journal reported, clearing the way for a vote on a roughly $900 billion Covid-19 relief package for millions of Americans.
The deal would maintain the central bank's ability to set up emergency lending programs without congressional approval, the Journal said, but the Fed would require approval to restart existing Cares Act programs once they expire at the end of this year.
Republicans had sought to limit the Fed's ability to provide credit for businesses and other institutions, claiming Democrats were trying to use the legislation to create a "slush fund" for state and local governments they control.
Democrats argue restricting the bank's powers could compound the fiscal crisis and hamper the ability of the incoming Joe Biden administration to boost the ailing US economy.
The impasse had threatened to temporarily shut down the government -- a scenario not unheard of in politically divided Washington, but disastrous given the worsening economy and record daily death tolls from Covid-19.
According to the Journal, Senate minority leader Chuck Schumer said the House and Senate could vote on the deal on Sunday.
Lawmakers could now "begin closing out the rest of the package to deliver much-needed relief to families, workers, and businesses," a spokesman for Senate majority leader Mitch McConnell told the newspaper.
Before the deal was reported, President Donald Trump tweeted: "Why isn't Congress giving our people a Stimulus Bill?
"GET IT DONE, and give them more money in direct payments."
The compromise would "preserve Fed independence and prevent Democrats from hijacking these programs for political and social policy purposes," a spokesman for Republican Senator Pat Toomey said, according to the Journal.
On the brink of a shutdown, the House of Representatives voted 320 to 60 late Friday to extend funding for federal agencies through Sunday to allow negotiators to thrash out a deal.
A bill to aid struggling businesses and the unemployed is seen as critical to getting the world's biggest economy back on its feet, even as new vaccines offer hope that an end to the pandemic may be in sight.
The package is expected to include aid for vaccine distribution and logistics, extra jobless benefits of $300 per week, and a new round of $600 stimulus checks -- half the amount provided in checks distributed last March under the Cares Act.
The $2.2 trillion package was credited with preventing a much more severe economic downturn.
It included huge amounts to rescue American companies, including $377 billion in grants to small businesses to pay workers and rent, $500 billion for loans to larger businesses and states and nearly $600 billion in tax breaks and deferrals.