In mid-September, the Federal Reserve faced a simple question from regulators: Why are profitable corporations being offered money from the central bank at a far cheaper interest rate than local communities? In one instance, Chevron was able to borrow money at half the rate as Wisconsin — meaning the oil giant was effectively getting a government subsidy, while state taxpayers were being offered a predatory rate. Why?

Fed officials had few answers and still haven’t addressed the iniquity. The result is a perverse dynamic: cheap Fed cash is boosting corporate profits, stock prices, shareholder dividends, and executive pay, all while budget-strapped states and cities are being forced to choose between high-interest loans or mass layoffs of teachers, firefighters, emergency workers, and other public-sector employees during a deadly pandemic.

It doesn’t have to be this way, according to a coalition of lawmakers and grassroots groups that have launched a campaign for reform. Their demands are straightforward: they want the Fed to use its authority to make long-term loan commitments to cities and states at 0 percent interest — the rate that the Fed already lends to Wall Street banks. Proponents say that would allow municipalities to avoid mass layoffs and also save $160 billion in annual interest payments they pay Wall Street firms on their past debt.