Senate approves Biden’s $1.9tn stimulus plan

The US Senate has voted to approve Joe Biden’s $1.9tn stimulus legislation, taking the president’s plan to stoke America’s economic recovery a big step closer to securing its final passage in Congress.

The upper chamber of Congress passed the fiscal stimulus legislation by 50 to 49, following party lines with all Democrats voting in favour and all Republicans present opposing.

The Senate green light brings Biden’s goal of boosting the US economy with a large-scale dose of federal support during his first months in office within sight of the finishing line.

The Democrat-controlled House of Representatives will now consider the Senate version of the stimulus plan over the coming days. If approved by the House, it will then head to Biden’s desk to be signed into law.

With the labour market still 9.5m jobs short of its pre-pandemic level and low-income workers and minority communities taking a disproportionate economic hit, the US president and Democrats have touted the package as essential to ensuring a strong and even recovery.

The stimulus “will go down as one of the most sweeping federal recovery efforts in history,” Chuck Schumer, the Senate majority leader, said shortly before the final vote. “It’s never easy to pass legislation as momentous as this. But it will all, and soon, be worth it.”

Biden and his economic team have rejected criticism from some economists that the plan is excessive and risks an inflation spike, even with US recovery showing some signs of a solid revival in February after the winter slump.

The president’s failure to get a single Republican lawmaker to support the legislation is a blow to his hopes of using his decades-long experience in Washington to foster a new era of bipartisanship to back his agenda. But it meant that the White House and Democrats did not have to accept a smaller stimulus that would have inevitably resulted from a compromise with Republicans.

Still, securing unity among Democrats was not easy. The Senate was on a knife-edge for several hours on Friday when Joe Manchin, the centrist Democrat from West Virginia, held out for changes to the unemployment benefit provisions of the legislation.

But after hours of intense negotiations with senior members of his own party, Manchin agreed to support the legislation, allowing it to advance.

US lawmakers then spent the night voting in the upper chamber on a series of amendments to the bill brought by members of both parties, leaving the senators bleary-eyed until the final vote shortly after noon.

The centrepiece of the stimulus package is a new round of means-tested direct payments to most US individuals — worth $1,400 per person — that would be the third government cheque since the pandemic began.

The first delivered $1,200 to each eligible US citizen a year ago at the start of the crisis and a second $600 payment was made last December.

But this plan is much broader, including an extension of federal emergency unemployment benefits worth $300 per week until early September, $350bn in aid to states and local governments and the expansion of a tax credit for children. It also includes extra funding for the rollout of vaccinations and the reopening of schools.

The unemployment benefit provisions and the eligibility for direct cheques were both trimmed in the final stretch of the Senate talks on the bill under pressure from centrist Democrats.

Progressive Democrats and the White House suffered a blow when a group of moderate lawmakers, including Manchin, joined Republicans in rejecting calls to include an increase in the federal minimum wage to $15 per hour.

Republicans fiercely attacked the stimulus bill as excessive and improperly targeted, in a bet that over time it will be backfire economically and lose popularity. Most opinion polls show Biden’s plan has the support of the majority of Americans.

“This weekend’s spending is bigger than the entire annual economy of Canada, yet only 1 per cent of it is vaccine-related,” said Ben Sasse, the Republican senator from Nebraska. “This $1.9tn ‘emergency’ bill is overwhelmingly non-emergency — we should’ve just bought Canada too,” he quipped.

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