President-elect Joe Biden on Thursday unveiled the details of a $1.9 trillion coronavirus rescue package designed to support households and businesses through the pandemic.
The proposal, called the American Rescue Plan, includes several familiar stimulus measures in the hope the additional fiscal support will sustain U.S. families and firms until the Covid-19 vaccine is widely available.
Here’s what Biden calls for:
- Direct payments of $1,400 to most Americans, bringing the total relief to $2,000, including December’s $600 payments
- Increasing the federal, per-week unemployment benefit to $400 and extending it through the end of September
- Increasing the federal minimum wage to $15 per hour
- Extending the eviction and foreclosure moratoriums until the end of September
- $350 billion in state and local government aid
- $170 billion for K-12 schools and institutions of higher education
- $50 billion toward Covid-19 testing
- $20 billion toward a national vaccine program in partnership with states, localities and tribes
- Making the Child Tax Credit fully refundable for the year and increasing the credit to $3,000 per child ($3,600 for a child under age 6)
The plan is the first of two major spending initiatives Biden will seek in the first few months of his presidency, according to senior Biden officials.
The second bill, expected in February, will tackle the president-elect’s longer-term goals of creating jobs, reforming infrastructure, combating climate change and advancing racial equity.
Senior Biden officials, who have been working on the stimulus plan for weeks, also confirmed that the president-elect still supports $10,000 in student debt forgiveness. Biden will formally introduce the plan during a speech at 7:15 p.m. ET from Wilmington, Delaware.
The nearly $2 trillion price tag will likely draw disdain from Republicans such as Sen. Rand Paul of Kentucky who may be wary of spending even more after December’s $900 billion bill.
Still, Biden officials said Thursday they are optimistic that the current rescue package has enough in it to make it palatable to lawmakers across the political spectrum and that the president-elect has been consulting congressional allies in recent weeks on the best path toward approval.
Sen. Marco Rubio, R-Fla., offered early bipartisan support for Biden’s spending plans. Earlier this week, Rubio implored the president-elect to make direct payments of $2,000 a top priority.
“All across our nation, people are looking for answers and demanding accountability, but they are also desperate for hope: hope that political leaders in Washington can begin taking steps to heal our deeply divided nation,” Rubio wrote in a letter to Biden dated Tuesday.
“It would send a powerful message to the American people if, on the first day of your presidency, you called on the House and Senate to send you legislation to increase the direct economic impact payments to Americans struggling due to the pandemic from $600 to $2,000,” he added.
Most economists, including Federal Reserve Chairman Jerome Powell, warn that additional Covid-19 relief funding and economic stimulus may be needed to help businesses stay afloat until the broader population has access to vaccines.
As of Thursday morning, the virus had killed more than 384,000 Americans, according to data from Johns Hopkins University.
Evidence that the virus continues to hamstring the U.S. economy is also readily available.
The latest jobless claims report, published earlier Thursday, showed that first-time claims for unemployment insurance jumped to 965,000 last week. The figure represented the highest level of initial unemployment claims since August.
Last week, the Labor Department’s monthly jobs report found employers shed 140,000 jobs in December, another indication the summer’s business rebound has paused or reversed.
“I think we’re going to see the existing stimulus program mitigate that, but it’s not going to give us the bounce we need to carry through until the vaccine has really brought the virus under control,” said Brad McMillan, chief investment officer at Commonwealth Financial Network.
“The question is: How fast are we going to bounce back? If you assume we’re going to bounce back without more stimulus, that’s basically the case for no more stimulus,” he added. “Personally, I’m not convinced that’s the case. And even if it is the case, it will certainly be much faster and more humane if we get more stimulus.”
Though some wondered if Biden would try to force the legislation through Congress using a special budgetary tool known as reconciliation, the president-elect is hoping the proposal will appeal to members of both parties.
Biden’s interest in bipartisan support could be an early attempt to foster the camaraderie he will need if his long-term aspirations such as infrastructure and tax reform are to stand a chance in a Senate divided 50-50.
Though Vice President-elect Kamala Harris will cast tiebreaking votes, Biden and the rest of the caucus cannot afford to lose fellow Democrats — and will likely try to draw in moderate Republicans — if his Build Back Better plan is to stand a chance in Congress.
Biden’s cooperative stance may also be in the hope Senate lawmakers will differentiate haggling over the Covid relief legislation from Trump’s potential impeachment trial and the more-routine process of confirming Cabinet nominees.
— CNBC’s Jacob Pramuk contributed to this report.