- Democrats won control of the Senate on Tuesday, and it opens the door for Biden to accomplish more of his policy agenda.
- Among the measures include $US2,000 stimulus checks for Americans, which was shot down by Republicans.
- Reconciliation allows tax-and-spending legislation to be passed with a simple majority vote.
- Visit Business Insider’s homepage for more stories.
The policy ambitions of President-elect Joe Biden received a major boost over the past 24 hours.
Democrats Jon Ossoff and Raphael Warnock won their Senate runoffs in Georgia on Tuesday, according to projections from Insider and Decision Desk HQ. Now Democrats are poised to control both chambers of Congress and the presidency for the first time in a decade.
They are on course to wield power during a period of extraordinary health and economic challenges facing the nation. Cases are still spiking and the economy is displaying severe signs of strain. On Wednesday morning, Democratic Sen. Chuck Schumer of New York pointed to the growing toll of the pandemic on average Americans in a statement hailing the pair of victories.
“Senate Democrats know America is hurting â€” help is on the way,” Schumer said, adding the party can deliver “bold change.” He stands to be the new majority leader in a chamber that’s evenly divided between 50 Republicans and 50 Democrats with Vice President-elect Kamala Harris casting tie-breaking votes.
It’s a razor-thin majority for Democrats and most legislation needs 60 votes to pass the Senate. But Congressional Democratic leaders have already signalled they could use a legislative manoeuvre known as budget reconciliation to approve more generous economic relief for individuals and strengthen Obamacare.
Among the measures that could make the cut in another emergency spending package are $US2,000 stimulus checks, which President Donald Trump belatedly called for in the waning days of his term. Biden has pledged that the federal payments would be sent to Americans immediately if Democrats clinched victories in Georgia.
“Their election will put an end to the block in Washington â€” that $US2,000 stimulus check â€” that money would go out the door immediately, to help people who are in real trouble,” he said at a Democratic rally.
“An opportunity to have a very different set of choices”
Reconciliation allows tax and spending bills to be approved by a simple majority vote, accelerating the process. However, legislation cannot adjust regulations or reform some programs with federal spending on autopilot such as Social Security. Lawmakers can only use it once each fiscal year.
Democrats say the the process opens to the door to policy changes that would have been inconceivable if Sen. Mitch McConnell kept control of the Senate.
“This of course gives us an opportunity to have a very different set of choices,” Sen. Ron Wyden of Oregon, the ranking Democrat on the Senate Finance Committee, told reporters on Capitol Hill on Wednesday. He later said he would push to reinstate the $US600 federal unemployment benefit which lapsed last year.
Republicans and Democrats have used reconciliation to push through their priorities without support from the other party since it was introduced four decades ago. Democrats deployed it to help pass the Affordable Care Act during President Barack Obama’s first term in 2010.
Then Republicans used it to approve the 2017 tax cuts. The law permanently slashed the corporate tax rate from 35% to 21% and provided temporary tax benefits for people.
Congress approved a $US900 billion economic aid package late last month after many months of tumultuous negotiations, though Trump held it hostage for several days in a failed attempt to increase stimulus check amounts. The legislation included $US600 direct payments and renewed $US300 federal unemployment benefits among other measures.
Biden has repeatedly referred to it as “a down payment” for a larger rescue package that could be enacted early in his first term.
House Democrats initially passed a $US3.4 trillion emergency spending plan in early May. The “Heroes Act” included relief provisions like federal unemployment benefits, aid to states, stimulus checks, and funds for public health agencies. It went nowhere in the Republican-controlled Senate because the GOP objected to its massive level of spending, and top Democrats later coalesced around a $US908 billion framework as the basis for relief negotiations.
The House also approved the CASH Act in December and it drew support from over two dozen Republicans. The bill would top up stimulus checks from $US600 to $US2,000 for taxpayers, a $US1,400 boost. But McConnell rejected it and never put it to a vote.
After the victories in Georgia, progressives began ramping up pressure on Biden to move quickly in approving the payments.
“The bill passed last month was nothing more than a small Band-Aid on a gaping economic wound,” Natalie Foster, co-chair of the Economic Security Project, said in a statement. “Those in need of desperate relief cannot afford to wait for more politics as usual or Washington gridlock.”
Business Insider Emails & Alerts
Site highlights each day to your inbox.