The Democrat controlled US House of Representatives approved a massive $1.9 trillion coronavirus relief package, advancing President Joe Biden’s top agenda item and providing more resources to schools and businesses, boost funding for vaccinations and testing, and grant financial relief to Americans across the country.
Democrats passed the measure early Saturday morning, Feb. 27th in a party-line vote, with Republicans united against the bill calling for slimmer, more-targeted relief. All but two Democrats supported the bill in the 219-212 vote, and no Republicans backed the package.
Democrats have advanced the coronavirus legislation using the budget reconciliation process, in a bid to avoid the Senate’s 60-vote threshold and pass their package with a simple majority of votes, given the slim 50-50 divide in the upper chamber.
The Senate is expected to take up the legislation next week, after the chamber’s parliamentarian ruled that Democrats could not include a $15 minimum wage in the proposal over budgetary concerns. “This started almost a year ago,” House Majority Leader Steny Hoyer, D-Md., said of the pandemic ahead of the House vote. “Today’s vote is a crucial step in our fight to defeat COVID-19.”
The American Rescue Plan would provide $1,400 stimulus checks to millions of Americans across the country and extend federal unemployment benefits through the summer. It would also provide hundreds of millions of dollars in aid to state and local governments, schools and vaccine and COVID-19 testing efforts — in addition to nutritional and child care assistance.
While Democrats and the White House have touted public polls showing broad bipartisan support for the measure, and the endorsements of state and local GOP leaders, House Republicans are expected to vote against the bill as a bloc. For weeks, they have argued that Democrats’ proposal is too expensive and ignores the $4 trillion in coronavirus relief approved by Congress last year, some of which remains unspent.
“This isn’t a relief bill,” House Minority Leader Kevin McCarthy said Friday. “It takes care of Democrats’ political allies while it fails to deliver for American families.” Americans “want us to actually work together, to come together and solve the problems in a bipartisan way,” Rep. Anthony Gonzalez, R-Ohio, said on the House floor. “I think that message was clear. And the more the majority ignores it, the shorter their majority will be.”
Biden had briefly engaged with a group of 10 Senate Republicans pushing an alternative to his plan, but rejected their $600 billion counteroffer as too meager, arguing it did not meet the moment and would cut spending on key programs included in his legislation.
Senate Budget Committee Chairman Bernie Sanders, I-Vt., and Finance Committee Chairman Ron Wyden, D-Ore., announced they would offer an amendment to the budget bill, once it comes over from the House, that would penalize “large, profitable corporations” through the elimination of tax deductions” if those companies do not raise the minimum wage for their workers to “at least $15 an hour.” The two chairmen also said that measure would offer incentives to small businesses to raise worker wages.
House Speaker Nancy Pelosi said Democrats would still “absolutely” pass the package without the minimum wage increase, and members of the caucus reaffirmed their commitment to the issue on Friday. “I’m not going to stop till we get it,” Rep. Debbie Dingell, D-Mich., said Friday.
Look at some highlights of the legislation:
- The legislation provides a rebate that amounts to $1,400 for a single taxpayer, or $2,800 for a married couple that files jointly, plus $1,400 per dependent. Individuals earning up to $75,000 would get the full amount as would married couples with incomes up to $150,000.
- The size of the check would shrink for those making slightly more with a hard cut-off at $100,000 for individuals and $200,000 for married couples.
- Some Republicans want to cut the size of the rebate as well as the pool of Americans eligible for it, but Biden has insisted on $1,400 checks, saying “that’s what the American people were promised.” The new round of checks will cost the government an estimated $422 billion.
- Under current law, most taxpayers can reduce their federal income tax bill by up to $2,000 per child. The package moving through the House would increase the tax break to $3,000 for every child age 6 to 17 and $3,600 for every child under the age of 6.
- The legislation also calls for the payments to be delivered monthly instead of in one lump sum. If the secretary of the Treasury determines that isn’t feasible, then the payments are to be made as frequently as possible.
- Also, families would get the full credit regardless of how little they make in a year, even just a few hundred dollars, leading to criticism that the changes would serve as a disincentive to work. Add in the $1,400 per individual checks and other items in the proposal, and the legislation would reduce the number of children living in poverty by more than half, according to an analysis from the Center on Poverty and Social Policy at Columbia University.
- The legislation would send $350 billion to state and local governments and tribal governments. While Republicans in Congress have largely objected to this initiative, Biden’s push has some GOP support among governors and mayors.
- Many communities have taken hits to their tax base as millions of people have lost their jobs and as people stay home and avoid restaurants and stores to prevent getting COVID-19. Many areas have also seen expenses rise as they work to treat the sick and ramp up vaccinations.
- But the impact varies from state to state and from town to town. Critics say the funding is not appropriately targeted and is far more than necessary with billions of dollars allocated last spring to states and communities still unspent.
- The bill calls for $130 billion in additional help to schools for students in kindergarten through 12th grade. The money would be used to reduce class sizes and modify classrooms to enhance social distancing, install ventilation systems and purchase personal protective equipment. The money could also be used to increase the hiring of nurses, counselors and to provide summer school.
- Spending for colleges and universities would be boosted by $40 billion, with the money used to defray an institution’s pandemic-related expenses and to provide emergency aid to students to cover expenses such as food and housing and computer equipment.
- The bill provides another round of relief for airlines and eligible contractors, $15 billion, so long as they refrain from furloughing workers or cutting pay through September. It’s the third round of support for airlines.
- A new program for restaurants and bars hurt by the pandemic would receive $25 billion. The grants provide up to $10 million per entity with a limit of $5 million per physical location. The grants can be used to cover payroll, rent, utilities and other operational expenses.
- The bill also provides another $7.25 billion for the Paycheck Protection Program, a tiny fraction of what was allocated in previous legislation. The loans are designed to help borrowers meet their payroll and operating costs and can potentially be forgiven.
- Expanded unemployment benefits from the federal government would be extended, with an increase from $300 a week to $400 a week. That’s on top of what beneficiaries are getting through their state unemployment insurance program.
- The bill provides money for key elements of the Biden administration’s COVID-19 response, while also trying to advance longstanding Democratic priorities like increasing coverage under the Obama-era Affordable Care Act.
- On “Obamacare,” it dangles a fiscal carrot in front of a dozen states, mainly in the South, that have not yet taken up the law’s Medicaid expansion to cover more low-income adults. Whether such a sweetener would be enough to start wearing down longstanding Republican opposition to Medicaid expansion is uncertain.
- The bill provides $46 billion to expand federal, state and local testing for COVID-19 and to enhance contract tracing capabilities with new investments to expand laboratory capacity and set up mobile testing units. It also contains about $14 billion to speed up the distribution and administration of COVID-19 vaccines across the country.
RAISING THE MINIMUM WAGE
- The bill would gradually raise the federal minimum wage to $15 per hour by June 2025 and then adjust it to increase at the same rate as median hourly wages. However, that provision is not expected to survive in the final bill. The Senate parliamentarian ruled that it cannot be included in the COVID-19 economic relief package under the process Democrats chose to undertake to get a bill passed with a simple majority.
Biden had predicted such a result. Still, the ruling was a stinging setback for most Democratic lawmakers who had said the higher minimum wage would increase the pay for millions of Americans. The nonpartisan Congressional Budget Office had projected the new federal minimum wage would lift some 900,000 people out of poverty once it was fully in place. But Republicans said the mandatory wage hikes would make it harder for small businesses to survive and they pointed to the CBO’s projection that about 1.4 million jobs would be lost as employers looked for ways to offset their higher personnel costs.