On The Money: Fed chairman asks Congress to consider more stimulus | Pelosi invokes Powell in bid to unite party | GOP faces growing pressure for new stimulus

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THE BIG DEAL— Fed chairman asks Congress to consider more stimulus: Federal Reserve Chairman Jerome Powell on Wednesday urged Congress to consider another ambitious fiscal rescue package, warning that the economy may need further support to avoid a cycle of business failures, job losses and bankruptcies well after the pandemic passes.

In a Wednesday speech, Powell said the U.S. could suffer serious long-term economic damage from the coronavirus pandemic and called on policymakers to do whatever they can to foster a strong recovery—regardless of the cost.

“The recovery may take some time to gather momentum, and the passage of time can turn liquidity problems into solvency problems,” he said during remarks before an interview with the Peterson Institute for International Economics. 

“Additional fiscal support could be costly, but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery,” he continued. “This trade-off is one for our elected representatives, who wield powers of taxation and spending.” Read more on Powell’s warning here.

What it means: Powell is asking Congress as explicitly as tradition allows to spend substantially more money to keep the economy from collapsing into a depression. The deferential nature of his comments is little more than a formality. This is the Fed’s version of screaming from the rooftops as Republicans grow increasingly wary of further stimulus spending.

Powell tells fiscal hawks to deal with the debt later: Powell, a Republican seen as moderate, had pleaded with Congress to cut deficits during the economic boom that preceded the crisis. But with the economy cratering as COVID-19 spreads through the U.S., the Fed chair has urged fiscal hawks to temporarily set aside concerns about the mounting debt.

“When the economy is strong and unemployment is low, that’s the time to be addressing those concerns. I think now, when we are facing the biggest shock that the economy has had in modern times, is, to me, not the time to prioritize considerations like that,” Powell said.

Read more: 40 percent of households earning less than $40K lost jobs in March: Fed chairman

Pelosi echoes Powell’s call for action: While Powell’s message may have been targeted toward Republicans, Speaker Nancy Pelosi (D-Calif.) heard it loud and clear.

“The staggering scale of this crisis demands historic action and extraordinary urgency.  Members of the House and Senate must work together and not stand in the way of the relief that the American people and the experts know is needed. Families cannot afford to wait,” Pelosi said in response to Powell’s speech. 

The speaker echoed Powell’s call for stimulus to help build momentum behind the House Democrats’ $3-trillion economic rescue and COVID-19 response. 

• While Republicans have all but formally blocked the measure from becoming law, Pelosi is plowing ahead with a vote Friday on House Democrats’ $3 trillion coronavirus relief package, bucking progressives who are calling for a delay to give lawmakers time to secure additional liberal priorities in the bill.
• Democratic leaders want to limit defections to increase the pressure on President Trump and Senate Republicans who are in no rush to negotiate another costly rescue package. The Hill’s Cristina Marcos and Mike Lillis have more here.

And while Senate Majority Leader Mitch McConnell (R-Ky.) called for a “pause” last week on new coronavirus legislation, rank-and-file Senate Republicans acknowledge there is growing pressure to respond to the House Democrats, so they are assembling ideas for a package that could pass this summer. The Hill’s Alexander Bolton has more on that here.

LEADING THE DAY

Biden backs rent, mortgage forgiveness during coronavirus pandemic: Former Vice President Joe Biden, the presumptive Democratic presidential nominee, on Wednesday backed rent and mortgage forgiveness for those struggling to get by during the coronavirus pandemic.

In a Wednesday interview on the Snapchat show “Good Luck America,” Biden called for the federal government to help keep jobless Americans in their homes and apartments amid the deepest economic downturn since the Great Depression.

“There should be rent forgiveness and there should be mortgage forgiveness now in the middle of this crisis,” Biden said when asked if he supported a “federal rent bailout.”

“Forgiveness. Not paid later, forgiveness. It’s critically important to people who are in the lower-income strata,” he continued.

Biden’s major leftward shift: Biden has previously voiced support for delaying mortgage payments, banning evictions and foreclosures, and freezing rent for those who’ve lost their jobs during the pandemic. But Biden’s Wednesday embrace of mortgage and rent forgiveness “not paid later” appears to be a significant step further that aligns a Democrat widely seen as moderate with the party’s left flank. I explain here.

• A group of House progressives including Rep. Alexandria Ocasio-Cortez (D-N.Y.) and the leaders of the Congressional Progressive Caucus have rallied behind a bill from Rep. Ilhan Omar (D-Minn.) to cancel all rent and mortgage payments from March 2020 through the end of the pandemic.
• The measure would set up federal relief funds for landlords and lenders to recoup the cost of lost mortgage and rent payments if they agree to abide by a set renter protections for five years. 
• The proposal from Omar and her progressive colleagues goes well beyond the measures approved and proposed by Democratic House leadership so far. 

Lawmakers look for ways to add to annual spending bills: Congressional appropriators are seeking to pad 2021 spending levels through off-book accounts in response to the coronavirus pandemic, which is putting unprecedented pressure on lawmakers to help the nation get through a health and economic crisis.

• The approach would likely push some spending on health and veterans programs into emergency funds, which would allow Congress to technically stick to a budget caps deal negotiated last summer while still increasing spending levels by as much as $11 billion.
• Both chambers have indicated that they are open to using a budget gimmick to open the doors to additional spending that involves the Veterans Affairs (VA) Mission Act.

The Hill’s Niv Elis explains how it works here.

GOOD TO KNOW

• Stocks fell Wednesday following remarks from Federal Reserve Chairman Jerome Powell offering a gloomy outlook for the economy after the coronavirus pandemic.
• Goldman Sachs is predicting that a quarter of the U.S. workforce will be unemployed at the peak of the coronavirus pandemic. 
• Organization for Economic Cooperation and Development Secretary-General Angel Gurría on Wednesday warned that the debt countries and companies take on to weather the coronavirus pandemic would be a drag on economies in the future.
• The top Republican on the House Ways and Means Committee blasted House Democrats’ $3 trillion coronavirus relief package on Wednesday, calling it a “recipe for a prolonged recession.” 
• Eight surprises in House Democrats’ $3T coronavirus relief bill