- A bipartisan group of senators unveiled a $US908 billion stimulus plan that contains $US300 federal unemployment benefits but omits another round of $US1,200 direct payments to taxpayers.
- The plan also includes aid for strapped state and local governments.
- The compromise package represents a concerted effort to break the deadlock on Capitol Hill on another coronavirus relief plan, but congressional leaders have not endorsed the plan.
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A bipartisan group of senators unveiled a $US908 billion stimulus plan on Tuesday directed at breaking the deadlocked negotiations around coronavirus relief on Capitol Hill as the pandemic threatens to inflict new devastation on the American economy.
The plan was introduced by a group of lawmakers at a press conference including Democratic Sen. Joe Manchin of West Virginia, Republican Sen. Susan Collins of Maine, and Democratic Sen. Mark Warner of Virginia.
“Our action to provide emergency relief is needed now more than ever before,” Manchin said. “The people need to know we are not going to leave until we get something accomplished.”
The concerted effort comes as Congress faces mounting pressure to act before the end of the year with the looming end of several programs keeping struggling people afloat. Provisions within the plan include:
- $US300 federal weekly unemployment benefits retroactive from December 1 for 18 weeks.
- $US240 billion in new Paycheck Protection Program assistance for small businesses.
- $US160 billion in funding for state and local governments.
- $US51 billion in new healthcare and vaccine-related funds.
- A temporary liability shield for businesses from coronavirus-related lawsuits.
The compromise plan omitted another round of $US1,200 stimulus checks, likely in an attempt to keep the plan’s price tag under $US1 trillion. A previous effort among Republicans to push for a stimulus package of that size failed in July because many GOP senators were reluctant to support a costly plan, pointing to the rising national debt.
Both Democrats and President Donald Trump support a second wave of direct payments to taxpayers. Congressional leaders in either party did not endorse the plan.
Lawmakers have not passed a coronavirus relief bill since the spring, when Congress approved over $US3 trillion to support people and businesses as the economy collapsed under the weight of the coronavirus pandemic. Negotiations between the White House and congressional Democrats ultimately went nowhere over the summer and in the run-up to the election on Nov. 3.
Instead, Senate Majority Leader Mitch McConnell has for months touted a $US500 billion relief plan that would provide funding for schools, public-health systems, and small businesses. But Democrats blocked it twice and say it’s not enough to address the economic and health crises. They have sought at least $US2.2 trillion in further spending.
The Trump administration has largely withdrawn from the relief talks and put McConnell in charge. On Tuesday, McConnell said he was in conversations with the White House about designing a plan that could draw the support of Trump.
McConnell circulated a plan among Senate Republicans that would omit federal unemployment benefits but provide limited aid for jobless people, The Washington Post reported. The bulk of the plan’s funding would go towards small business assistance, then schools.
Trump has largely been quiet on the matter of economic relief since his election loss to President-elect Joe Biden. The bipartisan proposal drew a chilly reception from the administration. “The $US908 billion proposal has not been a topic of discussion,” White House press secretary Kayleigh McEnany said in a statement about coronavirus aid.
The economy needs more government support, experts say
Many experts say the economy is in need of additional government support as it enters a perilous stretch of the pandemic. Coronavirus cases are surging nationwide, prompting states to renew restrictions in a bid to thwart the spread of the virus.
Nearly 12 million people are also at risk of losing all of their jobless aid the day after Christmas if Congress doesn’t step in. Other protections, such as an eviction moratorium and a deferral of student-loan payments, expire next month, along with a paid leave initiative for millions of workers.
Ernie Tedeschi, a policy economist at Evercore ISI, said the plan would help support people and businesses going into early next year as Biden takes office. But he raised concerns about attaching another expiration date for programs aiding unemployed people, similar to how the CARES Act rescue package did in March.
“Cementing an end date for the package is a risk because we don’t know how the virus is going to evolve,” Tedeschi said in an interview. “The US is entering some tough winter months, and March 31 will probably be the very beginning of vaccine distribution.”
Some conservatives say the US economy is recovering on its own, citing the unemployment rate, which has fallen from a high of 14.7% in April to 6.9% in October.
“We don’t need another trillion-dollar spending bill. The economy is growing much faster than everyone thought,” Steve Moore, an outside economic advisor to Trump, told Business Insider. “The stock market is booming, and the only thing that’s holding down the economy is these blue states that are locking down their businesses.”
Senate Minority Leader Chuck Schumer on Tuesday urged a compromise, though it was unclear whether Congress would pass another package with a few weeks left on the legislative calendar.
“We need to come together and come to an agreement that will not satisfy any one of us completely but gets the job done,” the New York Democrat said Tuesday on the Senate floor.
Biden, meanwhile, also urged both parties to pass a large, multitrillion dollar economic rescue plan. He said at a speech in Wilmington, Delaware that “any package passed in a lame-duck session is likely to be, at best, just a start.”