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President-elect Joe Biden on Thursday unveiled details of a $ 1.9 trillion coronavirus rescue package designed to support households and businesses during the pandemic.
The proposal, called the American Rescue Plan, includes several familiar stimulus measures in the hope that the additional tax support will support American families and businesses until the Covid-19 vaccine becomes widely available.
Here’s what Biden calls it:
- Direct payments of $ 1,400 to most Americans, bringing total relief to $ 2,000, including December payments of $ 600
- Increase federal unemployment benefit per week to $ 400 and extend it until the end of September
- Increase in federal minimum wage to $ 15 an hour
- Extension of moratoriums on evictions and seizures until end of September
- 350 billion dollars in aid to states and local communities
- $ 170 billion for primary and secondary schools and higher education institutions
- $ 50 billion for Covid-19 testing
- $ 20 billion for a national immunization program in partnership with states, towns and tribes
- Make the child tax credit fully refundable for the year and increase the credit to $ 3,000 per child ($ 3,600 for a child under 6)
The plan is the first of two big spending initiatives Biden will seek out in the first few months of his presidency, according to senior Biden officials.
The second bill, due in February, will tackle the president-elect’s long-term goals of creating jobs, reforming infrastructure, tackling climate change and advancing racial equity.
Senior Biden officials, who have been working on the stimulus package for weeks, also confirmed that the president-elect still supports the cancellation of the $ 10,000 student debt. The president-elect will formally present the plan during a speech at 7:15 p.m. ET in Wilmington, Delaware.
Still, the nearly $ 2 trillion price tag is likely to attract the contempt of Republicans, such as Sen. Rand Paul of Kentucky, who may be hesitant to spend even more after December’s $ 900 billion bill.
Still, Biden officials said on Thursday they were optimistic that the current bailout contained enough to make it acceptable to lawmakers across the political spectrum and that the president-elect had consulted with allies in Congress in recent weeks on the best route to approval.
Others, such as Sen. Marco Rubio, R-Fla., Have offered early bipartisan support for Biden’s spending plans. Earlier this week, the Florida Republican pleaded with the president-elect to make direct payments of $ 2,000 a top priority.
“People across our country are looking for answers and demanding accountability, but they also desperately need hope: hope that political leaders in Washington can begin to take action 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 asked the House and Senate to send you a bill to increase direct payments to Americans struggling due to the pandemic from 600 to 2000 dollars., “He added.
Most economists, including Federal Reserve Chairman Jerome Powell, warn that additional Covid-19 relief funds and an economic stimulus may be needed to help businesses stay afloat until people as a whole 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 hamper the U.S. economy is also readily available.
The latest jobless claims report, released earlier Thursday, showed first-time jobless claims climbed to 965,000 last week. This figure represented the highest level of initial jobless claims since August.
Last week, the Ministry of Labor’s monthly employment report found that employers cut 140,000 jobs in December, further indication that the summer’s business rebound has halted or reversed.
“I think we’re going to see the existing stimulus package mitigate that, but it won’t give us the rebound we need to see through until the vaccine really gets the virus under control,” said Brad McMillan, Director of Investments 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 more stimulus,” he added. “Personally, I’m not convinced that is the case. And even if it is, it will certainly be much faster and more humane if we get more stimuli.”
While some have questioned whether Biden would try to push the legislation through Congress using a special budget tool called reconciliation, the president-elect hopes 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’ll need if his long-term aspirations, such as infrastructure and tax reform, are to stand a chance in a 50-to-50 Senate. 50.
Although Vice President-elect Kamala Harris casts decisive votes, Biden and the rest of the caucus cannot afford to lose their fellow Democrats – and will likely try to attract moderate Republicans – if his Rebuild Better plan is to have a chance in Congress.
Biden’s cooperative stance may also be in the hope that Senate lawmakers will differentiate the haggling over Covid-19 relief legislation from the potential Trump impeachment trial and the more common process of confirming Cabinet nominees.
– CNBC’s Jacob Pramuk contributed to this report.
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