Trump Vetoes Defense Bill; CDFI, Paycheck Protection Program Loans in Jeopardy

President Trump on Wednesday vetoed the massive defense authorization bill and then threatened to veto the massive economic stimulus and omnibus appropriations bill.

The vetoed defense bill contains a plan to maintain free rent benefits on military bases for credit unions, but not for banks. It also contains money laundering provisions long sought by credit union trade groups. Trump did not cite the credit union or money laundering provisions in his veto message.  Instead he objected to a lack of technology provisions and a plan to rename military installations that currently are named after Confederate soldiers as justification for his veto.

Then before leaving for Florida for Christmas, Trump made comments that left open the possibility of his vetoing the massive economic stimulus and omnibus appropriations bill that contains an extension of the Paycheck Protection Program and $12 billion for the Community Development Financial Institutions program. Congressional leaders and the administration officials who negotiated the bill thought Trump was in agreement with the bill that was passed and that it would be signed and become law. Now it is not clear whether there will be any coronavirus relief before Trump leaves office.

The House and Senate may try to override the veto of the defense authorization bill next week; the 4,517-page conference report passed both Houses with enough votes to accomplish that. The vote to override the veto is not a certainty, however, because it is not clear how many members of Congress may change their vote on the bill because of the President’s response to it. Some Republicans who voted for the bill may now vote against it to uphold the veto, while Democrats who voted against the bill may now vote for it to override the veto.

In his comment on the economic stimulus and omnibus appropriations bill, Trump said he believes the economic impact payments that would be made to people to offset the economic effects of the coronavirus should be $2,000 rather than the $600 included in the measure. The Trump Administration had agreed to $600 during negotiations and Republicans rejected the larger number.

House Speaker Nancy Pelosi (D-Calif.) immediately welcomed the larger number Trump suggested and had a measure brought to the floor to increase the amount of the economic impact payments to $2,000. To do this quickly, the measure required unanimous consent. House Republicans Thursday blocked this attempt by Democrats to comply with Trump’s request.

Trump also said he opposed foreign aid provided in the 5,593-page bill. That assistance is provided in the omnibus spending portion of the bill that would fund the government for the remainder of FY21 and much of that assistance had been included in the Trump Administration’s own budget.

The next steps regarding the stimulus and omnibus spending bill remain uncertain. President Trump still may sign the measure despite his objections. He may veto it and send it back to Congress for an override vote. Or he may do nothing with the bill until this Congress is adjourned on January 3. Both funding the government and the programs in the economic stimulus portion of the bill are currently in doubt.

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