WASHINGTON (BLOOMBERG) – US President Joe Biden gave his strongest indication yet that he’ll push for swift action on coronavirus relief for the US economy without Republican support, as House lawmakers cleared the way for passing his US$1.9 trillion (S$2.5 trillion) stimulus plan with only Democratic votes.
Highlighting his emphasis on speed, Biden signalled he was resigned to his minimum-wage hike not being a part of the bill.
“Apparently, that’s not going to occur because of the rules of the United States Senate,” he said in a CBS interview. The US$15 an hour proposal was panned by Republicans, who sought to block it in the Senate.
“If I have to choose between getting help right now to Americans who are hurting so badly and getting bogged down in a lengthy negotiation – or compromising on a bill that’s up to the crisis – that’s an easy choice,” Biden said in remarks Friday at the White House. “I’m going to act and I’m going to act fast.”
A White House official said Friday night that even though the prospects for raising the minimum wage as part of the relief legislation did not look promising, the president remains committed to the idea.
Biden’s outreach to Republicans, including hosting a meeting at the White House with a group of 10 earlier this week, failed to win backing for his go-big stimulus.
His comments Friday were his harshest criticism yet of Republican counterproposals, and a clear indication the White House is girding for what could be a party-line vote to pass his package.
The House on Friday followed the Senate in approving a budget resolution for 2021, clearing a path for Biden’s plan to pass without the need for Republican support. House Speaker Nancy Pelosi said the move sets Congress up to pass the stimulus bill by mid-March.
Biden spoke hours after a report showed private-sector payrolls barely grew in January, with the restaurant and lodging sector logging almost 600,000 in job losses over the past two months. While the jobless rate dipped to 6.3 per cent, that was partly because some Americans gave up looking for work.
“Some in Congress think we’ve already done enough to deal with the crisis in the country. Others think that things are getting better and we can afford to sit back and either do little or nothing at all,” Biden said. “That’s not what I see. I see enormous pain.”
Biden’s Covid package took a major step forward with an early morning vote in the Senate along party lines that showcased the Democrats’ ability to proceed on a bill without Republican support. The president met later to talk strategy with Pelosi and the chairs of key House committees working to draft the rescue plan.
Expectations for stimulus helped investors look past the Labour Department’s report, which also showed total employment down almost 10 million compared with the pre-pandemic peak. The S&P 500 Index closed at a record high on Friday.
Still, Pelosi and Senate Majority Leader Chuck Schumer will need to hold their caucuses together amid calls from moderates to split off vaccine funding, which has bipartisan support.
Biden’s plan is second in size only to the US$2 trillion Cares Act approved last March, when the first blow from Covid-19 walloped both the nation’s economy and financial markets. The price tag of the new package has spurred opposition from Republicans, with even some Democrats warning that it could limit the space to maneuver on other priorities later in the year.
Larry Summers, who served as President Barack Obama’s top economic adviser during the last crisis, warned of putting so much stimulus in the pipeline that “we have an economy that is literally on fire.”
Biden’s rescue plan is six times as large, relative to the size of the economic hit, as the Obama administration’s recovery program, he said in an interview with Bloomberg TV this week.
Unless longer-term initiatives on infrastructure and climate change are funded with tax hikes, “we’re using up an enormous amount of fiscal space, an enormous amount of political and economic energy on measures that are not building back better,” said Summers, a paid contributor to Bloomberg.
Biden rejected the idea of going smaller, however, drawing on lessons from the last crisis.
“One thing we learned is we can’t do too much here,” the president said Friday. “We can do too little and sputter.” Friday’s weak employment report gave the administration’s argument a boost.
Nonfarm payrolls disappointed for the second consecutive month, increasing by 49,000 – below the median 105,000 estimate in a Bloomberg survey of economists.
“The numbers that we got this morning really do underscore the cost of inaction,” Biden economic adviser Heather Boushey said on Bloomberg Television.
House and Senate committees have until Feb 16 to write the stimulus legislation under budget instructions that were approved in the House and Senate on Friday.
Friday morning’s budget vote in the Senate – during which Vice President Kamala Harris provided the tie-breaking vote – allows Democrats in the upper chamber to bypass the 60-vote filibuster requirement and instead pass legislation along party lines.
White House Press Secretary Jen Psaki said that Biden “is keeping the door open” and that there could be opportunities for Republicans to offer amendments. But she added that “we are not going to sit here and wait for an ongoing negotiation.”
“The president ran on unifying the country” not on a “promise to unite” the two political parties, Psaki said.
One area of some flexibility is on tightening eligibility for the US$1,400 relief checks, Biden has said. White House economic adviser Jared Bernstein indicated Friday that households earning $300,000 or more shouldn’t be getting payments – though such recipients were a small share of previous relief checks.
Pelosi told reporters that she hopes the House will approve the relief bill and send it to the Senate in about two weeks. She said the stimulus will “absolutely without any question” be enacted by March 15 – the date by which expanded and extended unemployment benefits from the December relief bill will have expired.
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