(Bloomberg) – Congressional leaders have reached agreement on an estimated $ 900 billion spending package to support the U.S. economy amid the continued spread of the coronavirus, giving lawmakers a short timeline to consider and pass what would be one of the biggest economic bailouts in the nation’s history.
Senate Majority Leader Mitch McConnell, House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer announced the deal on Sunday. The legislative text was still being drafted, but the House was due to vote on it on Monday, followed by the Senate.
The plan would provide direct payments of $ 600 to most Americans and $ 300 a week in enhanced unemployment benefits through March, according to lawmakers and aides. Expiry programs for on-demand workers and the long-term unemployed would also continue.
There would be $ 284 billion for the paycheck protection program, which provides forgivable loans to small businesses. The package includes money for transportation – including airlines – vaccine distribution and education.
Negotiators could not overcome partisan differences over a corporate accountability shield and aid to state and local governments and left them behind. A last-minute dispute over the Federal Reserve’s emergency lending authority threatened to derail a deal until a compromise on Saturday night sets the stage for a broader deal.
The deal was reached after several rounds of negotiations over the past week between Pelosi, Schumer, McConnell and Republican House leader Kevin McCarthy. Treasury Secretary Steven Mnuchin also took part in the talks.
The back-up plan will be attached to a $ 1.4 trillion bill that will fund the federal government until the end of the fiscal year on September 30, 2021. Hacking over the back-up plan has forced Congress to adopt twice the temporary financing of government operations. The current stopgap expires at midnight Sunday, and lawmakers plan to spend another one-day extension to give time to vote on Monday.
“Finally, we have the bipartisan breakthrough,” McConnell told the Senate. Pelosi and Schumer said in a statement that the legislation “provides the funds urgently needed to save the lives and livelihoods of the American people as the virus accelerates.”
The deal came after a long stalemate following the passage in March of the largest in a series of pandemic relief plans, a mix of $ 1.8 trillion in spending and tax breaks that represented the largest such measure in US history. Since then, the economy has struggled to fully recover and another round of lockdowns threatens to put millions of jobs at risk as deaths from the novel coronavirus surpass 300,000.
Pelosi and the Trump administration were close to a $ 2 trillion deal ahead of the Nov. 3 election – which Senate Republicans never fully embraced – and the final deal is less than half.
While the deal would represent a substantial injection of aid, it will also put immediate pressure on the new Biden administration to define the next steps and then submit it to Congress.
President-elect Joe Biden last week called the emerging deal a “big down payment on what needs to be done at the end of January, the beginning of February.” McConnell said he expected another relief proposal from Biden, but he hasn’t given up on his opposition to direct aid to states and localities or his insistence that employers are protected from lawsuits related to Covid-19. This indicates that the fight for any new round will be no less controversial. The deal comes as the economy shows signs of deteriorating. Some 7.8 million Americans have fallen into poverty since June, the benefits of the previous one. covid back-up plan being expired, according to an analysis of current census data by economists at the University of Chicago and the University of Notre Dame.
The 2.4 percentage point increase in the estimated poverty rate in the United States through November is almost double the largest annual increase since the 1960s, economists said. The increase in poverty has been greatest in states with more limited unemployment insurance benefits.
Separately, a government report last week showed retail sales in the United States fell much more than expected in November, as the latest weekly jobless claims figure climbed to the highest level in three months. The wage bill could even contract in December, said Michael Feroli, chief US economist at JPMorgan Chase & Co. (NYSE 🙂 The relief program “should be very helpful for the economy,” he said. on Bloomberg TV.
“Nine hundred billion is a lot,” Feroli said. “You are talking about a 2-3% increase in GDP” over time, he said.
The package also has implications for the still outstanding competition for Senate control. McConnell told GOP senators on a private call on Wednesday that the passage would help Republican Senators David Perdue and Kelly Loeffler, who face a run-off on Jan.5, according to a person familiar with the conversation.
Democrats would take control of the Senate if both lose. McConnell specifically mentioned that their Democratic naysayers Jon Ossoff and Raphael Warnock were using the delay to get a deal and additional stimulus payments as lines of attack in their campaigns.
© 2020 Bloomberg L.P.