Tag Archives: U.S. Congress

Biden backs effort in Congress to repeal ‘forever war’ authority in Iraq

By Patricia Zengerle

WASHINGTON (Reuters) – U.S. President Joe Biden’s administration said on Monday it supported an effort in the U.S. Congress to repeal the 2002 Authorization for the Use of Military Force that allowed the war in Iraq, boosting lawmakers’ push to pull back the authority to declare war from the White House.

“The administration supports the repeal of the 2002 AUMF, as the United States has no ongoing military activities that rely solely on the 2002 AUMF as a domestic legal basis, and repeal of the 2002 AUMF would likely have minimal impact on current military operations,” the administration said in a policy statement.

The U.S. Constitution gives the power to declare war to Congress. However, that authority has gradually shifted to the president as Congress passed AUMFs that did not expire – such as the 2002 Iraq measure, as well as one that allowed the fight against al Qaeda after the Sept. 11, 2001, attacks.

A handful of members of Congress have been pushing for years to repeal, and possibly replace, the authorizations.

The administration statement said Biden is committed to working with Congress to ensure that outdated authorizations are repealed and replaced with “a narrow and specific framework” to ensure the country can continue to protect itself.

The House of Representatives is due to vote this week on the legislation to repeal the 19-year-old Iraq war authorization, which was introduced by Democratic Representative Barbara Lee. There was no immediate word on when the Senate might consider it.

Lee has long sought to hold presidential military powers in check. She was the only member of Congress to oppose the AUMF passed days after the Sept. 11 attacks, saying it provided too much of a “blank check” to allow the president to pursue military action.

(Reporting by Patricia Zengerle; editing by Jonathan Oatis)

Oil jumps 2%, hits highest in year as producers limit supply

By Jessica Resnick-Ault

NEW YORK (Reuters) – Oil prices rose more than 2% on Tuesday, reaching their highest in 12 months after major producers showed they were reining in output roughly in line with their commitments.

The U.S. and global benchmarks rallied as optimism about more U.S. economic stimulus added to market bullishness from supply cuts.

Brent crude was up $1.22, or 2.2%, at $57.57 a barrel by 12:03 EST (1703 GMT) for its third straight day of gains, touching $58.05, the highest levels since January last year.

U.S. oil gained $1.26, or 2.3%, to $54.81, after touching a session high of $55.26, the highest in a year.

The rally began as OPEC production increases were less than expected.

OPEC crude production rose for a seventh month in January but the increase was smaller than expected, a Reuters survey found.

Voluntary cuts of 1 million bpd by OPEC’s de facto leader, Saudi Arabia, are set to be implemented from the beginning of February through March.

Russian output increased in January but is in line with the supply pact, while in Kazakhstan oil volumes fell for the month.

The rally picked up steam as the U.S. Congress looked ready to adopt an economic stimulus package, and as cold U.S. weather boosted heating oil demand.

“You got the U.S. economic stimulus package that no one thought we would get,” said Bob Yawger, director of energy futures at Mizuho in New York.

A cold snap and heavy snow in the U.S. northeast drove the margin for heating oil to an 8-month high of $15.88, lending further support to crude.

However, energy giant BP flagged a difficult start to 2021 amid declining product demand, noting that January retail volumes were down about 20% year on year, compared with a decline of 11% in the fourth quarter.

Oil demand is nevertheless expected to recover in 2021, BP said, with global inventories seen returning to their five-year average by the middle of the year.

(Additional reporting by Noah Browning and Aaron Sheldrick; Editing by David Evans, David Goodman and David Gregorio)

Congressional COVID-19 impasse continues, Pelosi warns ‘house is burning down’

By Susan Cornwell

WASHINGTON (Reuters) – Top Democrats in the U.S. Congress on Thursday urged renewed negotiations over a multitrillion-dollar coronavirus aid proposal, but the top Republican immediately rejected their approach as too expensive, continuing a months-long impasse.

House of Representatives Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer ticked off a litany of grim data about the spread of the coronavirus in the United States, with eight straight days of over 100,000 new coronavirus cases being reported each day.

“It’s like the house is burning down and they just refuse to throw water on it,” Pelosi said of Republicans.

She and Schumer told a news conference that President-elect Joe Biden’s victory strengthened the Democratic position, which is to spend at least $2.2 trillion on another round of coronavirus aid, on top of the $3 trillion Congress has approved since the pandemic began. Republican President Donald Trump has not conceded to Biden.

“We’re willing to sit down and talk; they haven’t wanted to talk,” Schumer said, referring to the post-election session of Congress that lasts until the end of the year.

Senate Majority Leader Mitch McConnell, speaking to reporters in a hallway a few minutes later, said he preferred previous Republican proposals in the range of $500 billion, which he said would be aimed at the “residual problems.”

“I gather she (Pelosi) and the Democratic leader in the Senate still are looking at something dramatically larger. That’s not a place I think we’re willing to go,” McConnell said.

“But I do think there needs to another package,” the Republican said. “Hopefully we can get past the impasse.”

A senior official in Trump’s administration said it was leaving any negotiations about a coronavirus relief package to McConnell and Pelosi for the time being. But there was no sign such talks were imminent. Treasury Secretary Steven Mnuchin negotiated unsuccessfully with Pelosi for several weeks earlier in the fall.

Pelosi and Schumer spoke with Biden on Thursday by phone and the three “discussed the urgent need for the Congress to come together in the lame duck session on a bipartisan basis” to pass more coronavirus relief, a statement from Biden’s transition team said.

The bill should include resources to fight the pandemic, relief for working families and small businesses, support for state and local governments, expanded unemployment insurance, and affordable healthcare for millions of families, the statement said.

The Democratic-majority House in May approved an additional $3.4 trillion in coronavirus aid, but it went nowhere in McConnell’s Senate, where Schumer’s Democrats blocked less expensive Republican proposals from floor action.

The longest-serving Republican in Congress, 87-year-old Representative Don Young, announced on Thursday that he had been infected with coronavirus, the latest of over 20 members of Congress to have been infected.

(Additional reporting by Doina Chiacu and Patricia Zengerle; Editing by Jonathan Oatis and Aurora Ellis)

House Democrats file bill to fund U.S. government but leave out new farm money

By Richard Cowan and Susan Cornwell

WASHINGTON (Reuters) – The

By Richard Cowan and Susan Cornwell

WASHINGTON (Reuters) – The U.S. Congress this week will consider legislation funding the federal government through mid-December, with lawmakers hoping to avoid the spectacle of a government shutdown amid a pandemic and just weeks before the Nov. 3 elections.

House Democrats announced Monday they had filed the legislation, which leaves out new money that President Donald Trump wanted for farmers. A Democratic aide said the bill could be on the House floor as soon as Tuesday. The Senate could then act later this week.

The new federal fiscal year starts on Oct. 1.

The bill is designed to give lawmakers more time to work out federal spending for the period through September 2021, including budgets for military operations, healthcare, national parks, space programs, and airport and border security.

The spending proposal “will avert a catastrophic shutdown in the middle of the ongoing pandemic, wildfires and hurricanes, and keep government open until December 11, when we plan to have bipartisan legislation to fund the government for this fiscal year,” House Speaker Nancy Pelosi said in a statement.

But the measure’s December end date will require Congress to return to the government funding question again during its post-election lame-duck session, either during or after what could be a bruising fight to confirm Trump’s third Supreme Court nominee after the death of Supreme Court Justice Ruth Bader Ginsburg.

And the legislation does not include $21.1 billion the White House sought to replenish the Commodity Credit Corporation, a program to stabilize farm incomes, because Democrats considered this a “blank check” for “political favors,” said a House Democratic aide who asked not to be named. Trump promised more farm aid during a rally in Wisconsin last week.

Republicans were not happy. “House Democrats’ rough draft of a government funding bill shamefully leaves out key relief and support that American farmers need. This is no time to add insult to injury and defund help for farmers and rural America,” Senate Majority Leader Mitch McConnell wrote on Twitter. Republicans could seek to amend the document to add in the provision.

The bill proposes spending $14 billion to shore up a trust fund that pays for airport improvements and air traffic control

operations. It also proposes extending surface transportation funding for another year, directing $13.6 billion to maintain current spending levels on highways and mass transit.

Pelosi said the bill would also save America’s older citizens from an increase in Medicare health insurance premiums of up to $50 per month.

Congressional Democrats have had a stormy relationship with the White House over federal funding since Trump took office early in 2017. He has sought deep cuts in domestic spending while ramping up military funds.

(Reporting by Richard Cowan and Susan Cornwell; additional reporting by David Shepardson and Doina Chiacu; Editing by Scott Malone and Steve Orlofsky)

this week will consider legislation funding the federal government through mid-December, with lawmakers hoping to avoid the spectacle of a government shutdown amid a pandemic and just weeks before the Nov. 3 elections.

House Democrats announced Monday they had filed the legislation, which leaves out new money that President Donald Trump wanted for farmers. A Democratic aide said the bill could be on the House floor as soon as Tuesday. The Senate could then act later this week.

The new federal fiscal year starts on Oct. 1.

The bill is designed to give lawmakers more time to work out federal spending for the period through September 2021, including budgets for military operations, healthcare, national parks, space programs, and airport and border security.

The spending proposal “will avert a catastrophic shutdown in the middle of the ongoing pandemic, wildfires and hurricanes, and keep government open until December 11, when we plan to have bipartisan legislation to fund the government for this fiscal year,” House Speaker Nancy Pelosi said in a statement.

But the measure’s December end date will require Congress to return to the government funding question again during its post-election lame-duck session, either during or after what could be a bruising fight to confirm Trump’s third Supreme Court nominee after the death of Supreme Court Justice Ruth Bader Ginsburg.

And the legislation does not include $21.1 billion the White House sought to replenish the Commodity Credit Corporation, a program to stabilize farm incomes, because Democrats considered this a “blank check” for “political favors,” said a House Democratic aide who asked not to be named. Trump promised more farm aid during a rally in Wisconsin last week.

Republicans were not happy. “House Democrats’ rough draft of a government funding bill shamefully leaves out key relief and support that American farmers need. This is no time to add insult to injury and defund help for farmers and rural America,” Senate Majority Leader Mitch McConnell wrote on Twitter. Republicans could seek to amend the document to add in the provision.

The bill proposes spending $14 billion to shore up a trust fund that pays for airport improvements and air traffic control

operations. It also proposes extending surface transportation funding for another year, directing $13.6 billion to maintain current spending levels on highways and mass transit.

Pelosi said the bill would also save America’s older citizens from an increase in Medicare health insurance premiums of up to $50 per month.

Congressional Democrats have had a stormy relationship with the White House over federal funding since Trump took office early in 2017. He has sought deep cuts in domestic spending while ramping up military funds.

(Reporting by Richard Cowan and Susan Cornwell; additional reporting by David Shepardson and Doina Chiacu; Editing by Scott Malone and Steve Orlofsky)

China vows retaliation after Trump ends preferential status for Hong Kong

By Jeff Mason and Steve Holland

WASHINGTON (Reuters) – President Donald Trump on Tuesday ordered an end to Hong Kong’s special status under U.S. law to punish China for what he called “oppressive actions” against the former British colony, prompting Beijing to warn of retaliatory sanctions.

Citing China’s decision to enact a new national security law for Hong Kong, Trump signed an executive order that he said would end the preferential economic treatment for the city.

“No special privileges, no special economic treatment and no export of sensitive technologies,” he told a news conference.

Acting on a Tuesday deadline, he also signed a bill approved by the U.S. Congress to penalize banks doing business with Chinese officials who implement the new security law.

“Today I signed legislation, and an executive order to hold China accountable for its aggressive actions against the people of Hong Kong, Trump said.

“Hong Kong will now be treated the same as mainland China,” he added.

Under the executive order, U.S. property would be blocked of any person determined to be responsible for or complicit in “actions or policies that undermine democratic processes or institutions in Hong Kong,” according to the text of the document released by the White House.

It also directs officials to “revoke license exceptions for exports to Hong Kong,” and includes revoking special treatment for Hong Kong passport holders.

China’s foreign ministry said on Wednesday Beijing will impose retaliatory sanctions against U.S. individuals and entities in response to the law targeting banks, though the statement released through state media did not reference the executive order.

“Hong Kong affairs are purely China’s internal affairs and no foreign country has the right to interfere,” the ministry said.

Critics of the security law fear it will crush the wide-ranging freedoms promised to Hong Kong when it returned to Chinese rule in 1997, while supporters say it will bring stability to the city after a year of sometimes violent anti-government protests.

The security law punishes what Beijing broadly defines as subversion, secession, terrorism and collusion with foreign forces with up to life in prison.

U.S. relations with China have already been strained over the global coronavirus pandemic, China’s military buildup in the South China Sea, its treatment of Uighur Muslims and massive trade surpluses.

Trump’s handling of the coronavirus pandemic has raised doubts about whether he can win re-election on Nov. 3 amid a surge of new infections. He has attempted to deflect blame onto China.

“Make no mistake. We hold China fully responsible for concealing the virus and unleashing it upon the world. They could have stopped it, they should have stopped it. It would have been very easy to do at the source, when it happened,” he said.

Asked if he planned to talk to Chinese President Xi Jinping, Trump said: “I have no plans to speak to him.”

DOUBLE-EDGED SWORD?

Analysts say that completely ending Hong Kong’s special treatment could prove self-defeating for the United States.

Hong Kong was the source of the largest bilateral U.S. goods trade surplus last year, at $26.1 billion, U.S. Census Bureau data shows.

According to the State Department, 85,000 U.S. citizens lived in Hong Kong in 2018 and more than 1,300 U.S. companies operate there, including nearly every major U.S. financial firm.

The territory is a major destination for U.S. legal and accounting services.

The United States began eliminating Hong Kong’s special status under U.S. law in late June, halting defense exports and restricting the territory’s access to high-technology products as China prepared to enact the security legislation.

In May, Trump responded to China’s plans for the security law by saying he was initiating a process to eliminate the special economic treatment that has allowed Hong Kong to remain a global financial center.

He stopped short then of calling for an immediate end to privileges, but said the moves would affect the full range of U.S. agreements with Hong Kong, from an extradition treaty to export controls on dual-use technologies.

A U.S. official, speaking on condition of anonymity, said the administration was also preparing sanctions against Chinese officials and entities involved in the Hong Kong crackdown, including further U.S. travel bans and possible Treasury sanctions.

The timing remained unclear. The White House has previously threatened such sanctions but so far has only imposed restrictions on visas for an unspecified number of unnamed Chinese officials.

(Reporting by Jeff Mason and Steve Holland; Additional reporting by David Brunnstrom, Alexandra Alper, Patricia Zengerle, Eric Beech, Makini Brice and Matt Spetalnick; Editing by Leslie Adler and Peter Cooney)

George Floyd’s brother asks U.S. Congress to ‘stop the pain’ of police killings

By David Morgan and Richard Cowan

WASHINGTON (Reuters) – A brother of George Floyd, whose killing in Minneapolis sparked protests around the world, asked the U.S. Congress on Wednesday to stop the pain of black people caused by police violence.

“I’m here to ask you to make it stop. Stop the pain,” a tearful Philonise Floyd, 42, said in testimony before the House of Representatives Judiciary Committee. “George called for help and he was ignored. Please listen to the call I’m making to you now, to the calls of our family and the calls ringing on the streets of all the world.”

George Floyd’s death on May 25 after a policeman knelt on his neck for almost nine minutes was the latest in a string of killings of African-American men and women by police that have sparked anger on America’s streets and fresh calls for reforms.

“Justice for George,” Philonise Floyd told reporters on his way into the hearing venue.

The Judiciary Committee is preparing to shepherd a sweeping package of legislation, aimed at combating police violence and racial injustice, to the House floor by July 4, and is expected to hold further hearings next week to prepare the bill for a full House vote.

“The nation demands and deserves meaningful change,” Judiciary Committee Jerrold Nadler said at the start of the hearing in the U.S. Capitol.

“We must remember that he is not just a cause, a name to be chanted in the streets. He was a man. He had a family. He was known as a gentle giant. He had a rich life that was taken from him far too early and we mourn his loss,” Nadler said.

Representative Jim Jordan, the committee’s top Republican, said “the American people understand it’s time for a real discussion, real debate, real solutions about police treatment of African-Americans.” He also praised President Donald Trump’s efforts in response to Floyd’s death and subsequent protests.

Lawmakers also heard urgent pleas from civil rights advocates for strong reforms and more funding for social services in minority communities, as well as vocal support for police from three witnesses called by Republicans.

Some witnesses and lawmakers participated by video link to ensure social distancing during the coronavirus pandemic.

The Fraternal Order of Police has welcomed the bill’s introduction, saying in a statement that further discussions could produce a law capable of having a positive impact on law enforcement and policing.

Senate Republicans are working on rival legislation, due to be released on Friday, which touches on many of the same areas but emphasizes the collection of data rather than changes in laws and policies in key areas.

Kayleigh McEnany, a spokeswoman for Trump, said on Wednesday he could take policy action on race and policing via an executive order. McEnany declined to offer specifics in her comments to Fox News.

The Republican-led Senate Judiciary Committee will hold its own hearing next Tuesday.

(Reporting by David Morgan and Richard Cowan; editing by Scott Malone)

Factbox: Six members of U.S. Congress diagnosed with coronavirus

WASHINGTON (Reuters) – At least six members of the U.S. Congress have announced that they have contracted the novel coronavirus, and more than 30 others are or were self-quarantining in hopes of limiting the spread of the pandemic.

Now that Congress has passed a $2.2 trillion economic relief bill, and President Donald Trump has signed it into law, neither the House of Representatives nor Senate is now due back in Washington before April 20 at the earliest.

An estimated 230 House members returned to Washington to pass the relief package on Friday, despite the health risks of traveling and gathering at the Capitol, after Republican Representative Thomas Massie said he would block an effort to pass it without at least half of the House’s 430 members present.

Here is a look at some of the lawmakers affected by the virus:

WHO HAS THE VIRUS?

Representative Nydia Velazquez

Velazquez, a Democrat from New York, announced in a statement on Monday that she had been diagnosed with a presumed case of coronavirus, although she had not been tested, after developing symptoms of the ailment on Sunday.

Velazquez was among the House members who returned to the Capitol on Friday.

Representative Mike Kelly

Kelly, a Republican from Pennsylvania, said on Friday he had tested positive for the coronavirus at a drive-through testing site.

Kelly said in a statement he had started experiencing mild flu-like symptoms, and his doctor ordered the coronavirus test.

Representative Joe Cunningham

Cunningham, a Democrat from South Carolina, said on Friday he had tested positive for the coronavirus, although his symptoms had already begun to improve.

Cunningham had been in self-quarantine since March 19 after learning he had been in contact with another member of Congress who had tested positive.

Senator Rand Paul

The Kentucky Republican said on March 22 that he had tested positive and was in quarantine. He said he was asymptomatic and feeling fine and was tested out of an abundance of caution. He had been in the Senate and using the gym there in the days before he received his positive result.

Representative Mario Diaz-Balart

The Florida Republican said on March 18 that he tested positive after developing symptoms on March 14. That was less than 24 hours after he and more than 400 other members of the House of Representatives crowded into the chamber to pass an earlier coronavirus aid package.

Representative Ben McAdams

The Utah Democrat said on March 18 that he had the virus, also having developed symptoms on March 14. In a statement March 24, McAdams said he had been in the hospital and doctors were monitoring his occasional need for oxygen.

He has since been released from the hospital.

WHO IS SELF-QUARANTINED?

At least six of the 100 senators have self-quarantined because of exposure to Paul or others who tested positive for coronavirus. They are Republicans Cory Gardner, Lindsey Graham, Rick Scott and Ted Cruz. All have returned to public life.

More than two dozen House members have self-quarantined, some after exposure to Diaz-Balart or McAdams, and others after contacts with constituents or staffers who tested positive. Not all are still in isolation.

The Senate’s No. 2 Republican, John Thune, missed the March 25 Senate vote on the $2.2 trillion coronavirus bill after feeling ill and flying home to South Dakota. He later announced that a coronavirus test had come back negative.

 

(Reporting by Susan Cornwell, Patricia Zengerle and Jan Wolfe; Editing by Scott Malone, Jonathan Oatis and Nick Zieminski)

McConnell, Pelosi, Mnuchin see deal soon on $2 trillion U.S. coronavirus aid

By David Morgan and Richard Cowan

WASHINGTON (Reuters) – Senior Democrats and Republicans said on Tuesday they were close to reaching a deal on a $2 trillion coronavirus economic stimulus package, raising hopes that the U.S. Congress could soon act to try to limit the economic fallout from the pandemic.

“At last, I believe, we’re on the five-yard line,” Senate Majority Leader Mitch McConnell said, using a football analogy meaning close to scoring, as the chamber opened its session on Tuesday morning.

“We are very close,” added McConnell, the top Republican in Congress.

House of Representatives Speaker Nancy Pelosi, the top Democrat in Congress, said the two sides had agreed to more oversight provisions of a $500 billion fund to help hard-hit businesses, resolving a key sticking point.

“I think there is a real optimism that we could get something done in the next few hours,” Pelosi told CNBC.

Steven Mnuchin, President Donald Trump’s treasury secretary, told reporters that lawmakers hope to have a draft ready within the next two to three hours. He confirmed the changes to the industry fund. “There’s better oversight,” Mnuchin said.

Democrats have twice blocked attempts to advance the bill, saying it did not provide enough money for states and hospitals, lacked sufficient aid for unemployed Americans and did not include adequate supervision of a massive fund to aid big businesses.

Those concerns appear to have been addressed.

“I’m very optimistic that there will be a deal announced this morning,” Democratic Senator Chris Coons said on MSNBC.

Wall Street jumped at the open on Tuesday as signs that Washington was nearing a deal on the rescue package gave a shot of optimism to markets reeling under the biggest selloff since the global financial crisis more than a decade ago.

Trump’s administration has launched a major push for action to try to blunt the economic impact of the pandemic and steep stock market decline, after he spent weeks dismissing the risks.

As talks concluded late on Monday, Senate Democratic Leader Chuck Schumer said the two sides were nearing an agreement and he expected that the legislation would be voted upon on Tuesday.

‘ALL OF THE NONSENSE’

Republicans, Democrats and top Trump aides had negotiated for days over the package, which would be the third and largest passed to address the crisis if it is backed by both the Republican-majority Senate and Democratic-majority House and signed by the Republican president.

“Congress must approve the deal, without all of the nonsense, today. The longer it takes, the harder it will be to start up our economy,” Trump wrote on Twitter on Tuesday.

The coronavirus pandemic has killed more than 550 people in the United States and sickened more than 43,800, shuttered thousands of businesses, thrown millions out of work and led state governors to order about 100 million people – nearly a third of the nation’s population – to stay at home.

Pelosi has introduced her own $2.5 trillion counterproposal that also includes $4 billion that would allow states to conduct the November presidential and congressional elections by mail.

That legislation would likely be irrelevant if a bipartisan deal is forged in the Senate.

While details of the emerging bipartisan bill were not available, it is expected to provide financial aid for Americans out of work because of the virus and help for struggling industries such as airlines.

Republicans normally hold a slim 53-47 majority in the Senate, meaning they need Democratic support to garner the 60 votes required to advance most legislation.

But the coronavirus has affected their ranks, giving Democrats even more leverage. Republican Senator Rand Paul has tested positive for coronavirus and four other Republicans are also unable to vote because they were exposed to Paul or others with the virus.

(Additional reporting by Doina Chiacu, Lisa Lambert and Susan Heavey; Writing by Andy Sullivan and Patricia Zengerle; editing by Scott Malone, David Gregorio and Will Dunham)

U.S. lawmakers hit snag over vaccine costs in bill to battle coronavirus

By Richard Cowan

WASHINGTON (Reuters) – The U.S. Congress and President Donald Trump neared agreement on Tuesday on legislation to battle the spreading coronavirus with as much as $9 billion, but a dispute over the cost of vaccines held up a deal, Senate Democratic Leader Chuck Schumer said.

Leaders in the House of Representatives and Senate hoped to resolve the dispute and approve the emergency legislation by the end of this week.

A source close to the negotiations, who asked not to be identified, said that two issues must first be resolved: Democrats insist that the spending bill contain language stating that any coronavirus vaccine be priced at a “fair and reasonable” level. Democrats also want the government to help pay for vaccines to help those who might not be able to afford them.

Republican aides were not immediately available for comment.

Trump said the measure would appropriate about $8.5 billion – far above the $2.5 billion he initially requested last month. And House Majority Leader Steny Hoyer, noting that the measure was still being written in Congress, said it could inject “$8 or $9 billion” into the U.S. economy.

Depending on when Republicans and Democrats settle their dispute, the bill could be debated by the full House on Wednesday or Thursday. Once passed by the House, the Senate is expected to attempt to act promptly.

The legislation is one part of a multipronged approach emerging from Washington following multiple deaths in Washington state this week from illnesses caused by the highly contagious coronavirus.

Earlier on Tuesday the Federal Reserve cut interest rates by a half percentage point to a target range of 1.00% to 1.25% in an attempt to cushion the economy against the impact of the virus, which could slow consumer spending and disrupt business activities.

U.S. health officials have been ramping up the government’s ability to do more testing of patients suspected of having been infected by the new coronavirus, which was first detected in China late last year.

There also are efforts by pharmaceutical companies and Washington to speed the development of a vaccine for the coronavirus.

While details were still not available, the House’s emergency spending could contain money to help state and local governments respond to local health emergencies and possibly provide interest-free loans for small businesses affected by an outbreak, Democratic lawmakers said.

On Wednesday, the top four leaders of the House and Senate are scheduled to be briefed by Capitol officials on responses to the coronavirus and the possible impact on day-to-day operations of Congress.

A senior House Democratic aide said there have been no discussions of limiting tourism in the Capitol complex or shutting public galleries for viewing House and Senate debates.

Last Friday, House lawmakers were advised to develop alternative work arrangements for aides if the virus becomes widespread.

(Reporting by Richard Cowan, David Morgan, Jeff Mason and Lisa Lambert; Editing by Chizu Nomiyama and Jonathan Oatis)

Fed says risks to economy easing, but calls out coronavirus in report to Congress

By Howard Schneider and Lindsay Dunsmuir

WASHINGTON (Reuters) – A “moderately” expanding U.S. economy was slowed last year by a manufacturing slump and weak global growth, but key risks have receded and the likelihood of recession has declined, the U.S. Federal Reserve reported in its latest monetary policy report to the U.S. Congress.

“Downside risks to the U.S. outlook seem to have receded in the latter part of the year, as the conflicts over trade policy diminished somewhat, economic growth abroad showed signs of stabilizing, and financial conditions eased,” the Fed said, noting that the U.S. job market and consumer spending remained strong.

“The likelihood of a recession occurring over the next year has fallen noticeably in recent months.”

Among the risks the Fed did note: the fallout from the spreading outbreak of coronavirus in China, “elevated” asset values, and near-record levels of low-grade corporate debt that the Fed fears could become a problem in an economic downturn.

Overall, however, the Fed saw risks to a more than decade long U.S. recovery easing following its three interest rate cuts in 2019, and evidence that “the global slowdown in manufacturing and trade appears to be at an end, and consumer spending and services activity around the world continue to hold up.”

It cautioned that “the recent emergence of the coronavirus, however, could lead to disruptions in China that spill over to the rest of the global economy.”

By law the Fed twice a year prepares a formal report for the U.S. Congress on the state of the economy and monetary policy.

Much of its amounts to a review of recent events. The new document repeats the Fed’s assessment that the current level of the federal funds rate, in a range of between 1.5% and 1.75% was “appropriate” to keep the recovery track.

It also reviewed the spike in the federal funds rate last fall and the steps the Fed has taken to relieve funding pressures, repeating it considers the measures technical and not a change in monetary policy.

Fed Chair Jerome Powell will present the report at two public hearings next week, and some Democratic U.S. senators have already posed in writing a series of questions challenging the Fed’s actions in those short-term funding markets.

The document did include a separate section analyzing how a slump in manufacturing last year impacted economic growth overall, after concern a downturn in that sector might pull the United States into a recession.

The Fed concluded that the slowdown in factory output, which also meant less business for parts and services suppliers, cut overall growth in gross domestic product between 0.2 and 0.5 percentage points.

That falls “well short” of the threshold associated with past recessions, the Fed said.

(Reporting by Howard Schneider and Lindsay Dunsmuir; Editing by Andrea Ricci)