President-elect Joe Biden on Thursday revealed the details of a $ 1.9 trillion coronavirus rescue package designed to aid households and businesses in the pandemic.
The proposal, dubbed the American Rescue Plan, includes several well-known stimulus measures in the hopes that the additional tax support for U.S. families and businesses will remain in place until the Covid-19 vaccine is widely available.
Biden demands the following:
- Direct payments of $ 1,400 to most Americans, bringing the total relief to $ 2,000, including the $ 600 payments made in December
- Federal weekly unemployment benefit increased to $ 400 and extended through September
- Federal minimum wage increased to $ 15 an hour
- Extension of the eviction and enforcement moratoria until the end of September
- $ 350 billion in state and local state aid
- $ 170 billion for K-12 schools and colleges
- $ 50 billion for Covid-19 testing
- $ 20 billion for a national immunization program in partnership with states, places and tribes
- Make the child tax credit fully refundable for the year and increase the credit to $ 3,000 per child ($ 3,600 for a child under 6)
The plan is the first of two major spending initiatives Biden will seek in the early months of his presidency, according to senior Biden officials.
The second bill, expected in February, will address the elected president’s longer-term goals of creating jobs, reforming infrastructure, tackling climate change and promoting racial justice.
Senior Biden officials who have been working on the stimulus plan for weeks also confirmed that the president-elect continues to support $ 10,000 student debt relief. Biden will officially introduce the plan during a speech at 7:15 p.m. ET from Wilmington, Delaware.
Democratic leaders swiftly welcomed the move, and House Speaker Nancy Pelosi and the new Senate majority leader Chuck Schumer issued a joint statement.
“He is moving quickly with the COVID bailout package announced today by the president-elect to provide that aid and meet the needs of the American people. House and Senate Democrats thank you for your cooperation with the president-elect and look forward to the rescue plan, “said the two in a press release.
“The emergency framework announced tonight by the new Biden Harris administration is the right approach,” added the couple. “It shows that the Democrats will finally have a partner in the White House who understands the need to take quick action to meet the needs of the struggling communities.”
The nearly $ 2 trillion price tag is likely to despise Republicans like Kentucky Sen. Rand Paul, who may want to spend even more after December’s $ 900 billion bill.
Still, Biden officials said Thursday they were optimistic that the current bailout package contains enough to make it palatable to lawmakers across the political spectrum and that the president-elect has been consulting allies of Congress on the best route to approval over the past few weeks Has.
Senator Marco Rubio, R-Fla., Offered early bipartisan support for Biden’s spending plans. Earlier this week, Rubio pleaded with the president-elect to make direct payments of $ 2,000 a top priority.
“Everywhere in our nation people are looking for answers and calling for accountability, but they are also desperate for hope: they hope that Washington leaders can take steps to heal our deeply divided nation,” Rubio wrote in a letter Biden on Tuesday.
“It would send a strong message to the American people if, on the first day of your presidency, you called on the House and Senate to pass laws to you to limit payments for the direct economic impact to Americans struggling with the pandemic to increase from $ 600 to $ 2,000, “he added.
Most economists, including Federal Reserve chairman Jerome Powell, warn that additional Covid-19 aid funding and economic incentives may be needed to help businesses stay afloat until the wider population has access to vaccines Has.
By Thursday morning, the virus had killed more than 384,000 Americans, according to Johns Hopkins University.
There is also evidence that the virus continues to hold back the US economy.
The latest unemployment claims report, released Thursday, showed that initial unemployment insurance claims rose to 965,000 in the past week. The number was the highest number of initial jobless claims since August.
Last week, the Labor Department’s monthly employment report found employers cut 140,000 jobs in December. This is yet another indication that the summer business recovery was interrupted or reversed.
“I think we’ll see the existing stimulus plan soften this, but it won’t give us the bounce we need until the vaccine really gets the virus under control,” said Brad McMillan, chief investment officer at Commonwealth Financial Network.
“The question is, how fast are we going to bounce back? If you assume that we will bounce back with no more stimuli, basically it will when there are no more stimuli,” he added. “Personally, I am not convinced that this is the case. And even if it is, it will certainly be much faster and more humane if we receive more impulses.”
Though some wondered if Biden would try to enforce legislation through Congress using a special budgetary tool known as reconciliation, the president-elect hopes the proposal will appeal to members of both parties.
Biden’s interest in bipartisan support could be an early attempt to foster the camaraderie he needs if his long-term endeavors like infrastructure and tax reform are to stand a chance in a 50:50 Senate.
While Vice-President-elect Kamala Harris will cast groundbreaking votes, Biden and the rest of the caucus cannot afford to lose other Democrats – and will likely seek to attract moderate Republicans – if his “Better Back Down” plan is a chance to have in Congress.
Biden’s cooperative stance could also be in hopes that Senate lawmakers will differentiate haggling over Covid relief laws from Trump’s potential impeachment and the more routine process of confirming cabinet candidates.
– CNBC’s Jacob Pramuk contributed to this report.