The House of Representatives adopted a $ 1.9 billion coronavirus relief package, as US President Joe Biden cleared the first big hurdle on his way to congressional approval for his economic stimulus bill.
The Democratic-controlled House passed the expansive legislation, which includes 1,400 out-of-pocket payments, an extension of federal top-ups to unemployment insurance and an additional $ 350 billion for state and local governments, early Saturday morning with backing from the vast majority of Democratic lawmakers. .
The vote was a milestone for Biden, who made the stimulus package his top legislative priority for his first 100 days in the White House. Biden last week mentionned the US economy would return to “booming” if Congress approves its proposals, while Treasury Secretary Janet Yellen told G20 finance ministers this week they should also “go big” with support tax to help the global economy ravaged by the pandemic.
The House’s passage of the stimulus bill comes as financial markets have started betting more aggressively on a strong economic recovery and higher inflation this year, in part due to increased government spending in Washington . The sudden shift to more positive sentiment pushed 10-year Treasury yields higher and puzzled some equity investors, leading to a sell-off in tech stocks, although markets stabilized on Friday.
The stimulus package must be passed by both the House and the Senate – which Democrats control by the smallest of margins – if it is to be sent to Bidenthe office to be signed into law. Democrats have set a deadline for themselves in mid-March, when the current round of emergency unemployment benefits runs out.
Nancy Pelosi, the Democratic Speaker of the House, 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 bailout, which will do just that: save the American people,” she added. “The loss of jobs, the loss of income, the loss of human life, first and foremost.”
The bill, which would also expand tax credits for low-income Americans, went from 219 to 212 with two Democrats opposing it and no Republican crossing the aisle to support it.
Most Republican lawmakers in the House and Senate balked at the size of the stimulus package, which would be the second largest economic relief bill in U.S. history, behind the $ 2.2 billion Cares Act. Last year. The new stimulus would come less than three months after Donald Trump enacted a separate $ 900 billion coronavirus relief law.
“This is not a rescue bill. He takes care of the political allies of the Democrats, while he fails to meet the needs of American families, ”Kevin McCarthy, the House’s top Republican, said on Friday. “We already know what the best stimulus plan is: it consists of completely reopening 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 a five-year period. But that provision hit a major stumbling block Thursday night when the Senate parliamentarian ruled he couldn’t be pushed through using fiscal reconciliation, a maneuver that would allow the bill to pass the upper house of Congress by a simple majority.
The Senate is split, 50-50, between Democrats and Republicans, with Kamala Harris, the US Vice President, able to vote for the tiebreaker when needed.
Earlier this week, over 150 business leaders, including David Solomon of Goldman Sachs and Stephen Schwarzman of Blackstone, backed Biden’s stimulus package, saying “more needs to be done to put the country on the path to a strong and sustainable recovery.”
Last year, Fed Chairman Jay Powell publicly pushed Congress to approve more fiscal stimulus to stimulate the U.S. economy. But he took one more neutral stand this week on Capitol Hill, telling lawmakers, “It is not appropriate for the Fed to play a role in these budget discussions about particular provisions in particular laws.