President-elect Joe Biden on Thursday unveiled details of a $ 1.9 trillion coronavirus rescue package designed to support households and businesses through the pandemic.
The proposal, called the American Rescue Plan, includes several family stimulus measures in the hope that additional tax support will keep U.S. families and businesses until the Covid-19 vaccine is widely available.
This is what Biden asks:
- Direct payments of $ 1,400 to most Americans, a total relief of $ 2,000, including December’s $ 600 payments
- Increase the federal weekly unemployment benefit to $ 400 and extend it until the end of September
- Increase the federal minimum wage to $ 15 per hour
- Extend the moratoriums on evictions and foreclosures until the end of September
- $ 350 billion in state and local aid
- $ 170 billion for K-12 schools and higher education institutions
- $ 50 billion in Covid-19 testing
- $ 20 billion for a national vaccine program in collaboration with states, localities 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 first months of his presidency, according to senior Biden officials.
The second bill, expected in February, will address the president-elect’s long-term goals of creating jobs, reforming infrastructure, combating climate change and advancing racial equity.
Senior Biden officials, who have been working on the stimulus plan for weeks, also confirmed that the president-elect is still backing $ 10,000 in student debt forgiveness. The president-elect will formally present the plan during a speech at 7:15 p.m. ET from Wilmington, Delaware.
Still, the price of about two trillion dollars is likely to provoke contempt from Republicans, such as Sen. Rand Paul of Kentucky, who may be wary of spending even more after the $ 900 billion December bill.
Still, Biden officials said Thursday that they are optimistic that the current bailout package will be enough to make it enjoyable for lawmakers across the political spectrum and that the president-elect has been consulting with allies in Congress. the last few weeks on the best path to approval.
Others, such as Senator Marco Rubio of R-Florida, have offered initial bipartisan support for Biden’s spending plans. Earlier this week, the Florida Republican implored the president-elect to make direct payments of $ 2,000 as a top priority.
“Across our nation, people are looking for answers and demanding accountability, but they are also desperate for hope: we hope Washington’s political leaders can begin to take steps to heal our deeply divided nation,” he said. write Rubio in a letter to Biden dated Tuesday.
“I would send a powerful message to the American people if, on the first day of your presidency, you asked the House and Senate to send legislation to increase direct economic impact payments to Americans struggling because of the $ 600 to $ 2,000 pandemic, “he added.
Most economists, including Federal Reserve Chairman Jerome Powell, warn that additional Covid-19 aid funding and economic stimulus may be needed to help companies stay afloat until the population more wide have access to vaccines.
By Thursday morning, the virus had killed more than 384,000 Americans, according to data from Johns Hopkins University.
There is also evidence available that the virus continues to hamper the U.S. economy.
The latest unemployment claims report, released Thursday earlier, showed first-time unemployment insurance claims rose to 965,000 last week. The figure represents the highest level of initial unemployment claims since August.
Last week, the Labor Department’s monthly job report found that employers laid off 140,000 jobs in December, another indication that the summer business boom has stopped or been reversed.
“I think we’ll see that the existing stimulus program will mitigate that, but it won’t give us the bounce we need to make until the vaccine really controls the virus,” said Brad McMillan, investment director at Financial Network. the Commonwealth.
“The question is, at what speed will we recover again? If we assume that we will recover again without further stimuli, this is basically the case with no further stimuli,” he added. “Personally, I’m not convinced it’s like that. And even if it is, it will certainly be much faster and more humane if we get more stimulus.”
While some wondered if Biden would try to force legislation through Congress through a special budget tool known as reconciliation, the president-elect hopes the proposal will attract members from both sides.
Biden’s interest in bipartisan support could be a first attempt to foster the camaraderie he will need if his long-term aspirations, such as infrastructure and tax reform, have a chance in a 50-50 Senate divided.
While Vice President-elect Kamala Harris will cast a tie-breaking vote, Biden and the rest of the group cannot afford to lose fellow Democrats (and will likely try to attract moderate Republicans) if their Build Back Better plan is to have a chance in Congress.
Biden’s cooperative stance may also be in the hope that Senate lawmakers will differentiate bargaining for Covid-19 relief legislation from Trump’s possible dismissal trial and the more routine process of confirming those nominated to the Cabinet.
– CNBC’s Jacob Pramuk contributed to this report.