President-elect Joe Biden on Thursday revealed the details of a $ 1.9 trillion coronavirus rescue package designed to support families and businesses during the pandemic.
The proposal, called the American Rescue Plan, includes several family stimulus measures in the hope that additional fiscal support will support US families and businesses until the Covid-19 vaccine is widely available.
Here’s what Biden asks:
- Direct payments of $ 1,400 to most Americans, bringing total relief to $ 2,000, including December’s $ 600 payments
- Increase federal unemployment insurance per week to $ 400 and extend it until the end of September
- Raising the federal minimum wage to $ 15 an hour
- Extension of eviction and foreclosure moratoriums until the end of September
- $ 350 billion in state and local government aid
- $ 170 billion for K-12 schools and higher education institutions
- $ 50 billion for Covid-19 tests
- $ 20 billion for a national vaccine program in partnership 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 that Biden will pursue in the first few months of his presidency, according to senior Biden officials.
The second project, scheduled for February, will address the president-elect’s long-term goals of creating jobs, reforming infrastructure, combating climate change and promoting racial equality.
Senior Biden officials, who have been working on the stimulus plan for weeks, also confirmed that the president-elect still supports $ 10,000 in student debt forgiveness. The president-elect will formally present the plan during a 7:15 pm Eastern Time speech in Wilmington, Delaware.
Still, the price of nearly $ 2 trillion is likely to attract the disdain of Republicans, like Sen. Rand Paul of Kentucky, who may be afraid to spend even more after the December $ 900 billion bill.
Still, Biden officials said on Thursday that they are optimistic that the current bailout package has enough to make it palatable to lawmakers across the political spectrum and that the president-elect has been consulting with Congressional allies in recent weeks about the best path to approval.
Others, like Senator Marco Rubio, R-Fla., Offered early bipartisan support for Biden’s spending plans. Earlier this week, the Florida Republican pleaded with the president-elect to make direct payments of $ 2,000 a priority.
“Across our country, people are looking for answers and demanding responsibility, but they are also desperate for hope: hope that political leaders in Washington can begin to take steps to heal our deeply divided nation,” Rubio wrote in a letter to Biden dated Tuesday.
“It would send a powerful message to the American people if, on the first day of your presidency, you call upon the House and Senate to send legislation to increase direct economic impact payments to Americans struggling with the pandemic from $ 600 to $ 2,000 , “he added.
Most economists, including Federal Reserve Chairman Jerome Powell, warn that additional Covid-19 funding and economic stimulus may be needed to help companies stay afloat until the general population has access to vaccines .
As of Thursday morning, the virus killed more than 384,000 Americans, according to data from Johns Hopkins University.
Evidence that the virus continues to harm the US economy is also readily available.
The latest unemployment benefit claims report, published on Thursday, showed that unemployment insurance claims for the first time jumped to 965,000 last week. The number represented the highest level of initial unemployment claims since August.
Last week, the Department of Labor’s monthly job report revealed that employers lost 140,000 jobs in December, another indication that the summer business recovery has been halted or reversed.
“I think we will see the existing stimulus program mitigate this, but it will not give us the leap we need to make until the vaccine has really brought the virus under control,” said Brad McMillan, director of investments at the Community Financial Network.
“The question is, how quickly are we going to recover? If you assume that we are going to recover without more stimuli, this basically happens 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 human if we receive more stimulus.”
While some wonder whether Biden would attempt to force legislation in Congress using a special budgeting tool known as reconciliation, the president-elect hopes that the proposal will appeal to members of both parties.
Biden’s interest in bipartisan support may be an initial attempt to promote the camaraderie he will need if his long-term aspirations, like infrastructure and tax reform, are to have a chance in a 50-50 Senate.
While Vice President-elect Kamala Harris takes the tiebreaker vote, Biden and the rest of the caucus cannot afford to lose other Democrats – and will likely try to attract moderate Republicans – if their Build Back Better plan is to have a shot at Congress .
Biden’s cooperative stance may also be in the hope that Senate lawmakers will differentiate the dispute over Covid-19’s relief legislation from Trump’s potential impeachment trial and the more routine process of confirming Cabinet nominees.
–Jacob Pramuk from CNBC contributed to this report.