Joe Biden’s $1.9tn stimulus bill clears hurdle in Senate

Joe Biden’s $1.9tn stimulus bill cleared a big hurdle in the US Senate on Friday after Joe Manchin, the centrist Democratic senator, reached a deal with party leaders on the extension of unemployment benefits in the legislation.

Manchin’s opposition to a previous proposal on emergency jobless aid had for hours stalled progress towards approving Biden’s plan in the upper chamber of Congress on Friday, in a worrying development for the White House and Democratic leaders.

But the agreement will pave the way for the Senate’s consideration of the stimulus plan to continue on Friday night and into the weekend, offering new legislative momentum for Biden’s top priority since entering the White House in January.

Under the terms of deal forced by Manchin, the pandemic-related top-up to unemployment benefits would be extended until September 6 with payments of $300 per week, one Democratic aide said. It also exempts the first $10,200 of jobless benefits from taxes for households earning less than $150,000 in annual income.

“The president has made it clear we will have enough vaccines for every American by the end of May and I am confident the economic recovery will follow,” Manchin said in a statement. “We have reached a compromise that enables the economy to rebound quickly while also protecting those receiving unemployment benefits from being hit with an unexpected tax bill next year,” he added.

Manchin’s opposition to earlier language on unemployment benefits — which would have extended benefits until October — had blindsided Democratic leaders and the White House, forcing them into negotiations to satisfy the recalcitrant West Virginia lawmaker. At one point some Democrats were concerned that Manchin might support a rival amendment being pushed by Republican senators led by Ohio’s Rob Portman, which would seek to end unemployment benefits in July.

But the watering down of the jobless benefits imposed by Manchin could prove problematic for the fate of Biden’s bill once it returns to the House of Representatives, where Democrats hold a slim majority and cannot afford more than a handful of defections among progressive lawmakers. The House passed its own version of Biden’s stimulus last Saturday, and it included $400 per week benefits until the end of August.

The need to maintain emergency unemployment benefits after they expire on March 14 has been one of the primary catalysts for the push for extra stimulus from Biden, who wants to offer protection to millions of Americans who remain out of work because of the coronavirus pandemic.

The changes to unemployment benefits mark the second big change to the stimulus bill this week, after Democratic senators agreed to narrow eligibility for the $1,400 direct payments in the plan.

The upper chamber is evenly divided between 50 Democrats and 50 Republicans, and Kamala Harris, the vice-president, casts any tiebreaking votes.

The tension on unemployment benefits was reached as data from the US labour department showed jobs growth rebounding from its winter slump but still far short of pre-pandemic levels, prompting Democrats to stress the need for more stimulus as Republicans said the economy would recover without it.

“The February jobs report shows some progress, but much more is needed to address the daily reality of joblessness and financial insecurity facing millions of Americans,” said Nancy Pelosi, the Democratic House speaker, on Friday.

Even though opinion polls show a large majority of Americans support the stimulus, Republican lawmakers have mounted united opposition to the legislation, saying the aid is not sufficiently targeted at those who need it most and that the overall price tag is excessive.

“[Democrats] are dead-set on ramming through an ideological spending spree packed with non-Covid-related policies,” said Mitch McConnell, the Republican leader in the Senate, on Friday morning.

Ron Klain, the White House chief of staff, responded to the Republican criticism on Twitter: “If you think today’s jobs report is ‘good enough,’ then know that at this pace . . . it would take until April 2023 to get back to where we were in February 2020.”

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