President-elect Joe Biden on Thursday revealed details of a $ 1.9 trillion coronavirus rescue package designed to support households and businesses during the pandemic.
Called the American Rescue Plan, the proposal includes several well-known incentives in the hope that the additional fiscal support will support American families and businesses until the Covid-19 vaccine is widely available.
This is what Biden is asking for:
- $ 1,400 direct payments to most Americans, bringing the total relief to $ 2,000, including $ 600 payments in December
- Increase federal unemployment benefit per week to $ 400 and extend it through the end of September
- Increase the federal minimum wage to $ 15 an hour
- Extension of the deportation and execution moratoriums until the end of September
- $ 350 billion in state and local government assistance
- $ 170 billion for primary and higher education institutions
- $ 50 billion for Covid-19 testing
- $ 20 billion for a national vaccine 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 years old)
The plan is the first of two major spending initiatives that Biden will seek in the first few months of his presidency, senior Biden officials said.
The second bill, expected in February, will address the president-elect’s long-term goals of creating jobs, reforming infrastructure, fighting climate change and promoting racial equality.
Senior Biden officials, who have been working on the stimulus plan for weeks, have also confirmed that the president-elect is still supporting $ 10,000 in student debt cancellation. The president-elect will formally introduce the plan in a speech at 7:15 p.m. ET from Wilmington, Delaware.
Still, the nearly $ 2 trillion price tag is likely to get scorn from Republicans like Kentucky Senator Rand Paul, who may be wary of spending even more after December’s $ 900 billion bill.
Still, Biden officials said on Thursday that they are optimistic that the current bailout package contains enough to make it palatable for lawmakers across the political spectrum and that the president-elect has been consulting congressional allies in recent weeks on the best path to approval.
Others, such as Senator Marco Rubio, R-Fla., Have 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 top priority.
“All over our country, people are looking for answers and demanding accountability, but they are also desperate for hope: hope that political leaders in Washington can take steps to heal our deeply divided country,” Rubio wrote in a letter to Biden from Tuesday. .
“It would send a strong signal to the American people if, on the first day of your presidency, you called on the House and Senate to send you legislation to increase direct economic impact payments to Americans struggling through the pandemic from $ 600 to $ 600. $ 2,000, ”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 businesses survive until the wider population has access to vaccines.
According to data from Johns Hopkins University, the virus killed more than 384,000 Americans on Thursday morning.
Evidence that the virus continues to disrupt the US economy is also readily available.
The latest unemployment report, published earlier Thursday, showed that first claims for unemployment insurance rose to 965,000 last week. The figure represented the highest number of initial jobless claims since August.
Last week, the Labor Department’s monthly jobs report found that employers lost 140,000 jobs in December, another indication that the summer’s recovery has been paused or reversed.
“I think we’ll see the existing incentive program mitigate that, but it won’t give us the resilience we need to push through until the vaccine really brings the virus under control,” said Brad McMillan, Chief Investment Officer. at Commonwealth Financial Network.
“The question is, how soon will we bounce back? If you assume we bounce back without more stimulus, then in fact that is the case for no more stimulus,” he added. “Personally, I’m not convinced that’s the case. And even if that’s the case, it will certainly be much faster and more humane if we get more incentives.”
While some have questioned whether Biden would try to enforce the 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 nurture the camaraderie he will need if his long-term ambitions, such as infrastructure and tax reform, are to stand a chance in a Senate split 50-50.
While Vice President-elect Kamala Harris will issue a tiebreaker, Biden and the rest of the caucus cannot afford to lose fellow Democrats – and will likely try to bring in moderate Republicans – if his Build Back Better plan has an opportunity in the Congres.
Biden’s cooperative stance may also be in the hope that Senate lawmakers will differentiate haggling over the Covid-19 relationship law from Trump’s potential impeachment process and the more routine process of confirming cabinet nominees.
–CNBC’s Jacob Pramuk contributed to this report.