Joe Biden and Democratic leaders have reached a compromise that would limit eligibility for $1,400 stimulus cheques, as lawmakers wrangled over the US president’s proposed $1.9tn economic relief package ahead of a vote in the upper chamber of Congress.
The House of Representatives, which is controlled by the Democrats, last week passed the sweeping coronavirus relief bill, which includes the $1,400 direct payments, an extension of federal top-ups to unemployment insurance, and $350bn for state and local governments.
The bill — which Biden has made the centrepiece of his legislative agenda — is now being pored over by the Senate, which has a 50-50 balance between Democrats and Republicans, with Kamala Harris, the vice-president, able to cast a tiebreaking vote.
Several moderate Democrats, including Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, have argued that the bill — which would be the second-largest stimulus package in US history — needed to be more “targeted”.
Biden on Wednesday agreed to a proposal from moderate Democrats that would phase out the $1,400 cheques at a lower threshold than the White House originally intended, according to a Democratic source.
Under the plan initially proposed by the White House and passed by the House, adults earning less than $75,000 a year and couples making up to $150,000 annually would qualify for one-off $1,400 cheques. Smaller cheques would be sent to people making up to $100,000 per year and couples bringing in up to $200,000 annually.
But under the revised plan, the phasing out would happen at a lower level, with individuals and couples earning more than $80,000 and $150,000, respectively, not qualifying for cheques.
Jen Psaki, the White House press secretary, said Biden was “comfortable with where the negotiations stand” and that he had been “clear that he is open to changes on the margins of this package”.
“He also knows that the sausage-making machine sometimes spits out a different package,” she added.
Direct payments of up to $1,200 were among the most popular provisions in the $2.3tn Cares Act that Congress passed and former president Donald Trump signed into law last March at the onset of the Covid-19 pandemic. A subsequent $900bn stimulus package, signed at the end of last year, included additional cheques of up to $600.
House Democrats on Wednesday had mixed reactions to the changes, which most agreed were likely to be approved by the lower chamber of Congress. The House and Senate will both need to pass the relief package before it can be sent to the White House for Biden’s signature.
John Yarmuth, the Democrat from Kentucky who chairs the House budget committee, said: “I think it makes a lot of sense. I’m fine with it. I thought going up to $200,000 was bad optics.”
But Pramila Jayapal, the Democratic congresswoman from Washington state who chairs the House progressive caucus, told reporters: “I don’t like that this is being narrowed. I feel like the survival cheques are the easiest, simplest, most popular, populist proposal.
“I mean, if this is the only change, that’s one thing,” she added. “If there are other changes, that is going to be a different thing.”
Maxine Waters, the Democrat from California who chairs the House financial services committee, said: “I don’t like it, many others don’t, but we knew that going in the president’s relief plan was not going to get 100 per cent of what we want.”
The Democratic source said the Senate was not expected to revise proposed provisions for unemployment insurance, another pillar of the package. The House bill includes a federal top-up of $400 a week in extra unemployment insurance through to the end of August.
Biden called on House Democrats to trumpet the benefits of the fiscal package.
“I served in the Congress for 36 years before becoming vice-president for eight. We never had anything this urgent and this ambitious that was so widely embraced,” he said.
Biden also suggested Democrats needed to be more vocal in defending the stimulus than Barack Obama, the former president, was when promoting his economic policies during the global financial crisis.
“Barack was so modest. I kept saying ‘Tell people what we did.’ He kept saying ‘We don’t have time, we’re not going to take a victory lap.’ And we paid a price for it, ironically, for that humility,” Biden said.
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