President Joe Biden made public appeals on Friday for passage of his $1.9 trillion pandemic-relief bill, meeting potential recipients of stimulus checks and highlighting continuing damage to the labour market.
The Senate in the meantime was stalled as it considered amendments to the bill.
Negotiations among senators continued on the details of supplemental jobless benefits, though politicians still expect the legislation to pass in the chamber at the weekend.
Majority Leader Chuck Schumer pledged the Senate will “power through” the arduous final process of getting Mr Biden’s first signature piece of legislation passed.
The Senate is embroiled in the amendment proposal stage known as the vote-a-rama. The House will need to vote on the Senate’s version, with Democratic leaders pledging final passage by March 14, when current supplemental jobless benefits expire.
Mr Biden held a meeting with his economic team to highlight how the latest monthly jobs report showcases a still damaged labour market a year into the Covid-19 crisis, along with hosting a meeting with people who would be getting stimulus checks under the pending pandemic aid bill.
“It’s going to make a big difference in terms of their lives,” Mr Biden said. “People in the country are hurting right now, with less than two weeks from enhanced unemployment checks being cut out.”
Mr Biden earlier highlighted that the economy still has more than 9 million fewer jobs now than in February last year. “At that rate, it would take two years to get back on track.”
“We can’t afford one step forward, two steps backward,” he said in appealing for passage of his stimulus bill. “People need the help now.”
While Senate Democrats had looked to nail down a deal on the amount and duration of supplemental unemployment benefits earlier in the day, talks continued Friday afternoon, with Republican involvement.
Democrats continue to work within their caucus to make sure that none of their members go along with Republican amendments that could sink the bill in the House. Chief among the issues is unemployment insurance benefits.
Earlier in the day, a Democratic agreement was unveiled to reduce weekly supplemental jobless benefits to $300 per week — from $400 in the House-passed legislation — and extend it through October 4, compared with the end of August.
Press Secretary Jen Psaki tweeted that Mr Biden believes “it is critical to extend expanded unemployment benefits through the end of September".
The deal includes making $10,200 worth of jobless benefits tax free.
For millions of unemployed Americans who were able to receive enhanced federal jobless benefits, the change would eliminate their obligation to pay Internal Revenue Service levies on the first $10,200 of those payments.
That tax forbearance will offer major help.
Unemployment benefits, unlike stimulus payments, are subject to federal income taxes. Many states do not withhold taxes when they make the payments, so recipients will be required to pay those levies when they file their tax return this spring. That means that the millions of workers who received unemployment benefits could face large, unanticipated tax bills.
The deal would also expand a tax provision from the Republican 2017 tax law that restricts how business losses can be carried forward to offset future-year profits through 2026. The provision was initially implemented through 2025.
Mr Biden’s $1.9 trillion economic rescue plan will accelerate the country's return to full employment by a year, National Economic Council Director Brian Deese said.
“Most people say that this bill would pull forward by about a year the length of time it would take to get back to full,” Mr Deese said in an interview with Bloomberg News on Friday. He declined to make more specific predictions about unemployment.
A government report earlier Friday showed that total US payrolls in February remained more than 9 million lower than the peak prior to the pandemic. Mr Biden said Friday the report showed his stimulus legislation is “urgently needed".
Mr Deese added that the administration is working to speed up the delivery of stimulus checks that are a key feature of the aid bill that Congress is expected to pass in coming days.
White House economist Heather Boushey, also speaking in an interview, said that economic recovery will depend heavily on the distribution of coronavirus vaccines.
“Just to state the obvious, this all depends on getting shots in arms,” she said.
While many of the Republican amendment votes are expected to be designed to cause political damage to Democrats and have no chance of succeeding, others may go through.
“They are dead set on ramming through a partisan spending spree packed with non-Covid related policies” said Senate Minority Leader Mitch McConnell on Friday on the floor. “This isn’t a pandemic-rescue package; this is a parade of left-wing pet projects.”
Mr McConnell said the economy is “already on track to bounce back from this crisis,” because of last year’s bipartisan virus relief packages, not because of the $1.9 trillion bill before the Senate this week.
“Republicans have many ideas to improve the bill, many ideas, and we are about to vote on all kinds of amendments in the hope that some of these ideas make it into the final product,” Mr McConnell said.
“We are going to power through and finish this bill however long it takes,” Mr Schumer declared. “We are not going to make the same mistake we did after the last economic downturn, when Congress did too little.”
