President-elect Joe Biden has revealed in detail the details of a $ 1.9 trillion coronavirus rescue package designed to support households and businesses through the pandemic.
The proposal, called the US Rescue Plan, includes several well-known incentives in the hope that additional fiscal support will support families and businesses in the United States until the Covid-19 vaccine becomes widely available.
Here is what Biden calls for:
- Direct payments of $ 1,400 for most Americans, with the total relief reaching $ 2,000, including payments of $ 600 in December
- Increasing federal unemployment benefits per week to $ 400 and extending them until the end of September
- Increase the federal minimum wage to $ 1
- Extension of moratoriums on evictions and imprisonment until the end of September
- $ 350 billion in state and local state aid
- $ 170 billion for K-12 schools and colleges
- $ 50 billion to test Covid-19
- $ 20 billion for a national vaccine program in partnership with countries, settlements and tribes
- Make the child tax credit fully repayable 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 few months of his presidency, according to Biden senior 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 justice.
Biden’s senior officials, who have been working on the stimulus plan for weeks, also confirmed that the president-elect still supports a $ 10,000 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 tag of nearly $ 2 trillion 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 bill in December.
Still, Biden officials said Thursday that they are optimistic that the current bailout package is enough to please lawmakers across the political spectrum and that the president-elect has consulted with congressional allies in recent weeks in the best possible way. to the approval.
Others, such as Sen. Marco Rubio, R-Fla., Offered early bipartisan support for Biden’s spending plans. Earlier this week, the Florida Republican called on the newly elected president to make direct payments of $ 2,000 as a top priority.
“Throughout our nation, people are looking for answers and demanding accountability, but they are also desperate for hope: the hope that political leaders in Washington can begin to take steps to heal our deeply divided nation,” Rubio wrote in a letter to Biden on Tuesday.
“It will send a powerful message to the American people if, on the first day of your presidency, you call on Parliament and the Senate to send you legislation to increase direct payments for the economic impact of Americans fighting the pandemic from $ 600 to $ 2,000. , “he added.
Most economists, including Federal Reserve Chairman Jerome Powell, warn that additional funds may be needed to support Covid-19 and economic incentives to help businesses stay afloat while the general population does not have access to vaccines.
As of Thursday morning, the virus had killed more than 384,000 Americans, according to data from Johns Hopkins University.
Evidence that the virus continues to plague the US economy is also readily available.
The latest report on unemployment claims, published earlier on Thursday, shows that for the first time, unemployment insurance claims jumped to 965,000 last week. The figure represents the highest level of initial unemployment claims since August.
Last week, the Ministry of Labor’s monthly report found that employers had left 140,000 jobs in December, another indication that business recovery in the summer had been halted or reversed.
“I think we’ll see that the existing stimulus program will mitigate this, but it won’t give us the rebound we have to go through until the vaccine really puts the virus under control,” said Brad McMillan, chief investment officer at the UK Financial Network. community.
“The question is: How fast will we bounce? If you accept that we will bounce without more stimulus, it is actually that there is no more stimulus,” he added. “Personally, I’m not convinced that’s the case. And even if it is, it will certainly be much faster and more humane if we get more incentives.”
Although some wondered if Biden would try to enforce the law through Congress using a special budget instrument known as reconciliation, the president-elect hoped the proposal would appeal to members of both parties.
Biden’s interest in bipartisan support could be an early attempt to promote the partnership he will need if his long-term aspirations such as infrastructure and tax reform have a 50-50 chance in the Senate.
Although Vice President-elect Kamala Harris will vote a tiebreak, Biden and the rest of the parliamentary group cannot afford to lose fellow Democrats – and are likely to try to attract moderate Republicans – if his plan to build a better proposal has a chance. Congress.
Biden’s cooperative stance may also be in the hope that Senate lawmakers will distinguish the Covid-19 relief law bargain from the potential Trump impeachment process and the more routine process of confirming cabinet nominees.
– Jakob Pramuk from CNBC contributed to this report.