US President-elect Joe Biden speaks during a press conference on January 15, 2021 at Biden’s interim headquarters in Wilmington, Delaware, about his plan to give vaccines against coronavirus disease (COVID-19) to the US population.
Kevin Lamarque | Reuters
President Joe Biden’s first Covid-19 package is already facing hurdles in Congress that could force the fledgling administration to curb some of its more progressive goals just a week after the proposal debuted.
Early criticisms from Alaska Republican Sens. Lisa Murkowski and Utah Mitt Romney, two members of the bipartisan group of senators who worked out the framework for the December stimulus package, challenged the $ 1.9 trillion plan.
Both on Wednesday expressed doubts about the need for another bill, particularly one with such a price tag, less than a month after Congress passed the $ 900 billion measure just before the Christmas break.
While GOP criticisms were expected, the chances of the bill being passed unprocessed increased after a report quoted West Virginia Democratic Senator Joe Manchin downgrading the size of the latest round of proposed stimulus checks.
The opposition of both parties carries weight for Biden, who came to the White House on Wednesday with a wafer-thin majority in Congress. While both the House and Senate are under democratic control, the upper chamber is split 50-50. Vice President Kamala Harris has the casting vote.
National Economic Council director Brian Deese is expected to meet with a group of bipartisan senators in the coming days in hopes of addressing concerns about the bailout, according to a person familiar with the meeting. Deese is expected to stand up for the original plan, but will also consider contributions from members of the GOP that could help get the measure passed without the lengthy budgetary vote process that would allow her, just with democratic ones Voices to get through.
Deese did not immediately respond to a request for comment.
In the meantime, the democratically held House could adopt components of Biden’s proposal as early as the first week of February. House spokeswoman Nancy Pelosi, D-Calif., Told reporters Thursday that representatives will be working on committees for the whole of next week “so we’re ready to go down,” with a bill when the chamber is next Month returns.
During a caucus call on Thursday, House Majority Leader Steny Hoyer, D-Md., Told Democrats that, according to someone familiar with the call, he hoped to pass an auxiliary law quickly and non-partisanly. The party has not made any final decisions about which parts of Biden’s plan to include in the legislation, although funding for vaccine distribution is a priority.
The White House referred CNBC to comments from press secretary Jen Psaki on Wednesday when she told reporters that Biden intends to pass the plan with Republican support. She did not rule out using the budgetary instrument known as reconciliation.
“His clear preference is to move forward with a bipartisan bill … but we’re not going to take tools off the table either,” she said.
For Tony Fratto, a senior Treasury Secretary and White House advisor in the George W. Bush administration, the size of additional direct payments is probably Biden’s best “bargaining chip” in talks with the GOP.
“I think they built [the plan] bottom up and the number is $ 1.9 trillion, “Fratto said Thursday morning.” The big exception, however, are checks. This wasn’t a bottom-up thing, it was something that came from Trump and pushed for $ 2,000 checks. “
“There’s nothing particularly magical about $ 2,000 as a number,” he continued. “I think that number, along with state and local funding, will by far contain the most debate and likely be toned down.”
Fratto said he would prefer a more targeted stimulus plan. That is, one that either extends aid to sectors in greatest need (such as travel, hospitality and meals) or is aimed at workers who have applied for unemployment insurance.
Biden, who became the country’s 46th president on Wednesday, asked lawmakers last Thursday to approve the $ 1.9 trillion plan to “bail out” US homes and businesses over the next few months until coronavirus vaccines are widely used.
The president’s call for another round of incentives comes as Covid-19 continues to claim thousands of lives every day and efforts to introduce vaccines create logistical problems. The U.S. reported a new daily record for coronavirus deaths on Wednesday with 4,131 deaths. This comes from an NBC news tally.
Bad economic signs
The ongoing economic impact of the disease was also clear Thursday morning when the Department of Labor reported that 900,000 Americans filed for state unemployment benefits for the first time in the week of Jan. 16.
The US unemployment rate was 6.7% in December, which would be the highest unemployment rate since March 2014 before the global Covid-19 crisis.
Citing the unemployment claims data as he pushed for Biden’s relief plan on Thursday, Deese said the economy was “moving in the wrong direction”.
“It is important that Congress respond quickly to the president’s proposals and provide relief to families in need,” he said in a statement.
The president’s plan would tick a litany of democratic and progressive priorities such as direct payments of $ 1,400 per person to most households, weekly unemployment insurance of $ 400 through September, the expansion of child tax credits, and a minimum wage of $ 15 an hour.
It would also put $ 20 billion into a national Covid-19 vaccination program and $ 50 billion into testing.
When asked Friday why the U.S. government should keep writing checks to Americans who are not financially affected, Biden consultant Jared Bernstein noted that payments to individual filers are for those who earn more than $ 75,000 annually , gradually decrease.
“When you look at the percentage changes in after-tax income, this is a very advanced part of the plan, these direct payments,” Bernstein, who serves on the council of economic advisors, told CNBC. “I can see why the people there want an even more progressive distribution, but I think that brings the water to the fire in a useful way.”
Busy weeks ahead
The Senate has a busy schedule for the coming weeks as it attempts to hold an impeachment trial against former President Donald Trump and confirm Biden’s cabinet. On Wednesday Senate Majority Leader Chuck Schumer, DN.Y., said the democratically-ruled chamber would “address the dangers of the moment,” including a “one-time health and economic crisis.”
Pelosi and Schumer spokespersons did not immediately respond to requests for comment.
Biden’s plan runs into obstacles in the Senate. Democrats either need to win 10 GOP votes to beat the filibuster, or they need to take advantage of budget balancing, which only requires a majority. However, the budget rules can prevent them from including parts of the President’s proposal in a bill.
Senator Bernie Sanders, the independent Vermonter who will soon take over the Senate Budget Committee, has urged Democrats to use reconciliation to seek economic relief.
Republican Senator from Alaska Lisa Murkowski speaks during the U.S. Senate Committee on Health, Education, Labor, and Pensions hearing to examine COVID-19 on Capitol Hill in Washington, DC, on June 23, 2020.
Michael Reynolds | AFP | Getty Images
While reconciliation would bypass the need for Republican support, such a move could risk alienation from moderates like Murkowski and Romney, whose votes Biden may need for future political priorities.
“We just passed a program worth over $ 900 billion,” Romney told reporters shortly after Biden’s inauguration, according to Bloomberg News.
“The ink is barely dry on the $ 900 billion, and what the president is proposing is significant – $ 1.9 trillion,” Murkowski said. “I think it’s going to take a lot of debate and reflection.”
Congress has limited time to renew key portions of the $ 900 billion aid package approved last month. The included unemployment supplement of USD 300 per week expires on March 14th.
The Pandemic Unemployment Assistance program, which extends unemployment benefits to self-employed and gig workers along with independent contractors, expires on the same day. Some recipients will still receive benefits until April 5th.
The Biden government extended two auxiliary provisions through executive measures on the first day of its term in office. The Centers for Disease Control and Prevention said they would maintain a federal eviction moratorium through March. It should expire by the end of the month.
The Department of Education also announced that it would cease payments on federal student loans and interest accumulation through September. The measure would have expired at the end of January.
Subscribe to CNBC on YouTube.