Democrats have overcome a major hurdle in easing Covid-19: The House of Representatives has just passed its version of the $ 1.9 trillion stimulus package and passed it on to the Senate.
The bill was passed on Saturday morning around 2 a.m. on a vote between 219 and 212, with each Republican voting no. Democratic representatives Jared Golden from Maine and Kurt Schrader from Oregon also rejected the bill.
The bill includes some big ticket items that would bring major relief to businesses, workers, and the economy as a whole. It includes $ 1,400 stimulus checks for those earning up to $ 75,000, $ 400 expanded weekly unemployment insurance benefits through August 29, and $ billion for arenas such as schools, state and local governments, and restaurants. It also increases the Affordable Care Act subsidies for low- and middle-income Americans and expands both the child tax credit and the earned income tax credit.
The bill also includes a $ 15 minimum wage, though the Senate provision is dead. The Senate parliamentarian decided on Thursday evening that the increase in the minimum wage according to the rules of the budget vote cannot be passed.
In a statement Thursday House Majority Leader Steny Hoyer (D-MD) said he was “deeply disappointed” with the ruling, but noted that House Democrats will pass the bill as it is, despite the fact that it will eventually pass will change in the Senate. “Gradually increasing the minimum wage to $ 15 an hour remains a core part of the House Democrats’ economic plan and would provide a significant income boost to 27 million Americans while lifting nearly a million out of poverty,” he said.
Senate Democrats are considering some workarounds for the minimum wage, though it’s unclear whether they’ll stay.
After the House passes a version of the bill, it will go to the Senate, which will likely make some changes to the text. After that, it will likely come back to the House, which would have to pass any agreed version of the legislation before it lands on President Joe Biden’s desk. The clock is ticking: The expanded and expanded unemployment insurance under the last $ 900 billion stimulus package, which was passed in December, ends on March 14th. The Democrats do not want to push workers off a cliff of unemployment.
You can find a complete overview of the house bill here.
Democrats are making a big swing here
Biden first unveiled his proposal for a comprehensive Covid-19 aid package worth $ 1.9 trillion in January, which the congressional plan largely reflects. Democrats and many economists have argued for months that the pandemic risk means too little and not too much to the federal government to help the country and the economy. Believing the government to have underperformed its response to the Great Recession in 2009, many lawmakers mistakenly assumed that they would have multiple chances on major laws. You are determined not to make that mistake this time.
“We can’t do too much here,” Biden told reporters in the Oval Office in early February. “We can do too little and stutter.”
Democrats, including the President, have argued that it is an important moment for deficit spending to help people in need and also noted that interest rates are low and likely to stay that way for some time. “Every great economist thinks we should invest in deficit spending to generate economic growth,” Biden told reporters in January.
However, the Democrats and the White House have faced some setbacks.
Republicans have widely criticized the Democratic proposal. A group of 10 Senate Republicans tabled a counteroffer on Biden’s $ 1.9 trillion package, proposing instead a $ 600 billion bill that would have taken into account some immediate public health needs such as vaccinations and testing, as well as food aid . But it shrank spending in areas like unemployment, economic controls, and schools, and left out government and local aid altogether.
Some economists who are more centrist or even more democratic have questioned whether the legislation is too ambitious. Larry Summers, an economist who served in both the Clinton and Obama administrations, wrote a statement that the bill could cause future inflation or provide less politically palatable further stimulus. Summers’ concerns, while not out of left field, are not necessarily widespread – many economists have suggested that a little inflation would indeed be good, and the Federal Reserve has tools to fight it.
Before Summers’ comment was published, Austan Goolsbee, another Obama economic alum, posted a comment in the New York Times warning that the country could enter a double-slump recession, meaning the economy is doing better and then fall again. and called for a proactive response from the federal government. He wrote that a “wait and see” approach to a relief program “has proven profoundly wrong since the pandemic began,” noting that the virus has caused people to withdraw from the economy. “Much damage has already been done – and it shows not only in lost jobs, but also in lost income and lost businesses,” he wrote. “This damage could have been prevented. It definitely shouldn’t be repeated now. “
There is a lot of room to discuss what is in the legislation, what should and should not be there. Some provisions, such as the higher ACA subsidies, the extended child tax credit, and the extended earned income tax credit, are temporary and it is unclear whether they will apply beyond the next year or two. With the house bill, a month of extended unemployment insurance was cut off, which Biden initially wanted to extend until September. Democrats also opted not to include automatic stabilizers in the bill, which would tie benefits like unemployment insurance to economic conditions rather than arbitrary end dates.
That House passed a version of the package doesn’t mean the process is complete – there is still a long way to go before it lands in the Oval Office – but it is an important step.