The House of Representatives passed a $ 1.9 billion coronavirus package when US President Joe Biden was the first major hurdle to congressional approval of his economic stimulus bill.
The Democratically-controlled House passed comprehensive legislation early on Saturday morning, which includes $ 1,400 direct payments, an extension of federal top-ups to unemployment insurance, and an additional $ 350 billion for state and local governments, with the support of the vast majority of the democratic legislators. .
The vote was a significant milestone for Biden, who has made the stimulus package his top legislative priority for his first 100 days in the White House. Biden said last week that the US economy would “roar” if Congress approved its proposals, while Treasury Secretary Janet Yellen told G20 Treasury ministers this week that they should also “go big” with fiscal support to overcome the pandemic. ravaged world economy.
Home passage of the stimulus bill comes as financial markets have turned more aggressively into betting on a strong economic recovery and higher inflation this year, in part due to increased government spending from Washington. The sudden shift to more positive sentiment has pushed up 10-year Treasury yields and made some equity investors nervous, prompting a sell-off in technology stocks, although markets stabilized on Friday.
The stimulus package must pass both the House and Senate – which Democrats control by the smallest margins – if it is sent to Biden’s office to be signed into law. Democrats have set themselves a deadline in mid-March, when the current round of emergency unemployment benefits ends.
Nancy Pelosi, the Democratic Speaker of Parliament, said ahead of Friday’s vote that the bill “saves lives and saves the livelihoods of the American people”.
“I salute President Biden for his American rescue plan, which will do just that: save the American people,” she added. “The loss of jobs, the loss of income, the loss of life, in the first place.”
The bill, which would also expand tax credits for low-income Americans, went from 219 to 212, with two Democrats opposing it and no Republicans crossing the aisle to support it.
Most Republican lawmakers in the House and Senate have opposed the scope of the stimulus package, which would be the second-largest emergency economic relief bill in US history, after last year’s Cares Act. The new stimulus would come less than three months after Donald Trump signed a separate $ 900 billion coronavirus relief package.
“This is not a buyout. It provides the political allies of the Democrats, while it yields nothing for American families,” said Kevin McCarthy, the House’s top Republican, earlier on Friday. “We already know the best stimulus plan. : it is to completely reopen our economy. “
The latest house bill also includes a gradual increase in the federal minimum wage from $ 7.25 an hour to $ 15 an hour over five years. But that provision hit a major stumbling block late on Thursday when the Senate MP ruled that it could not be enacted through budget reconciliation, a maneuver that would allow the bill to pass through the upper house of Congress by a simple majority.
The Senate is split, 50-50, between Democrats and Republicans, with US Vice President Kamala Harris able to issue a tiebreaker if necessary.
Earlier this week, more than 150 business leaders, including David Solomon of Goldman Sachs and Stephen Schwarzman of Blackstone, supported Biden’s stimulus plan, saying “more needs to be done to put the country on the path to a strong, sustainable recovery.”
Fed Chairman Jay Powell last year publicly urged Congress to approve more fiscal stimulus to boost the US economy. But he took a more neutral stance on Capitol Hill this week, telling lawmakers, “It is not appropriate for the Fed to play a role in these tax discussions about certain provisions in certain laws.”