(Bloomberg) -- The Senate on Tuesday began a process that would let Democrats pass President Joe Biden’s $1.9 trillion stimulus without Republican votes. A report showed that many well-off households would get sizable stimulus payments under the relief plan but not under the smaller Republican alternative.
With a 50-49 vote Tuesday, the Senate opened debate on a budget resolution for the 2021 fiscal year, a maneuver that would clear the way for the president’s relief plan to pass in the chamber with a simple majority rather than the 60-vote threshold for most legislation.
Senate Majority Leader Chuck Schumer said that the process, known as reconciliation, is open to GOP participation and the stimulus package can still be tweaked with their input. But he said Democrats won’t risk moving slowly or timidly to bolster the economy.
Biden Stimulus Payments Would Go to High-Income Families: Study
Many well-off households would get sizable stimulus payments under Biden’s relief plan but not under the smaller Republican alternative, according to a report that could reinforce GOP opposition to a larger bill.
More than three-quarters of households with incomes from $110,650 to $156,978 would get an average $1,417 payment under Biden’s plan, according to analysis Tuesday from the Tax Foundation, a right-leaning think tank. Only 1% of households in that same income bracket would qualify for a very small check in the GOP proposal -- $4 on average, the research said.
In total, about 74% of households would get some money under the Republican plan, which includes $1,000 payments for middle-income adults and $500 for their dependents. About 94% of households would get money under the Biden plan, which calls for $1,400 payments for adults and dependents, with higher income thresholds and a longer phase-out period.
The question of who should qualify for direct payments has become a issue in the debate, with Republicans and some centrist Democrats, including Senator Joe Manchinof West Virginia, calling for the payments to be more targeted than in previous rounds.
Researchers at the U.S. Census Bureau and Harvard University have found that households with higher incomes are more likely to save the payments than lower-earning families, dampening the economic effects of direct federal assistance. -- Laura Davison
Biden, Yellen Tell Democrats That GOP Plan Is Too Small (3:11 p.m.)
President Joe Biden and Treasury Secretary Janet Yellen told Senate Democrats on Tuesday that a $618 billion pandemic-relief counterproposal by a group of 10 Senate Republicans falls far short of what’s needed to help stabilize the economy, Senate Majority Leader Chuck Schumer said.
Schumer also told reporters that both Biden and Yellen, in a phone call with all Democrats in the chamber, warned that the GOP plan would repeat the “mistake” of 2009, when economic stimulus failed to do enough for an economy struggling to recover from the global financial crisis.
“President Biden said he told Republicans he’s willing to make some modifications, but he’s very strong that the full American rescue plan get us through this crisis,” Schumer said. He added that Yellen said it “wasn’t close enough” to addressing the scale of the current crisis and doesn’t do enough to help working-class families.
Schumer also said that Biden is “totally on board with” the decision by Democratic congressional leaders to proceed with a budget plan that could enable a Democrat-only relief package in coming weeks or months. The Senate is set to vote Tuesday to take up the fiscal blueprint that kickstarts the process.
White House spokeswoman Jen Psaki said at a separate briefing Tuesday that the administration’s stimulus target is still $1.9 trillion and that Biden views the GOP plan as too small. -- Laura Litvan
Key Democrat Backs Process, Opposes Minimum-Wage Hike (1:31 p.m.)
Senator Joe Manchin, a key moderate Democrat from West Virginia, said he’ll vote Tuesday to begin the process of passing a stimulus bill using the budget process, though he opposes raising the U.S. minimum-wage to $15 as proposed in President Joe Biden’s $1.9 trillion plan.
“Our focus must be targeted on the Covid-19 crisis and Americans who have been most impacted by this pandemic,” Manchin said in a statement Tuesday, vowing to “only support proposals that will get us through and end the pain of this pandemic.”
He elaborated to reporters that he opposes a $15 minimum wage because it’s too high for his state.
“I’m supportive of basically of having something that’s responsible and reasonable. In my state that would be $11 with adjustments linked to inflation,” Manchin said.
Democrats will likely need all 50 members of their caucus to pass the budget resolution and subsequent budget-reconciliation bill given Republican opposition to the $1.9 trillion price tag being envisioned. -- Erik Wasson
Senate to Begin Democrat-Only Stimulus on Tuesday (11:19 a.m.)
Senate Majority Leader Chuck Schumer said the Senate on Tuesday will begin a process that would let Democrats pass President Joe Biden’s virus-relief bill without Republican votes.
Speaking on the Senate floor, Schumer said the chamber will vote to kickstart the budget reconciliation process, which isn’t subject to the 60-vote threshold that most legislation needs. The New York lawmaker said that while bipartisan talks can continue, the need to respond to the coronavirus pandemic is urgent.
“We are not going to dilute, dither or delay,” Schumer said.
Tuesday’s vote to begin debate on a fiscal 2021 budget resolution will be followed by a chaotic amendment process later in the week known as a vote-a-rama in which minority Republicans can force unlimited political gotcha votes.
The budget can thereafter pass with a simple majority vote. Later, a budget reconciliation bill that complies with the budget’s instructions to spend no more than $1.9 trillion over 10 years, and excluding non-fiscal matters, can also pass the Senate with a simple majority.
-- Laura Litvan, Erik Wasson
Democrats Propose Workaround for Vaccine Spending (10:25 a.m.)
House and Senate Democrats are proposing to include parts of Biden’s stimulus package in a fast-track budget process, which which would allow passage without Republican support.
Normally such types of funding are considered “discretionary” and covered by the yearly appropriations process, which restricts them from being included in a budget reconciliation bill that would require only 51 votes to clear the Senate.
Biden’s $1.9 trillion package includes spending on vaccines, health, education and local governments.
The budget resolution filed in the House on Monday and slated for votes this week makes clear that lawmakers will create a new “mandatory” Covid-19 program to bypass the appropriations process in order to get around this challenge.
Read QuickTake: How the Senate Strategy Known as Reconciliation Works
The budget calls for the authorizing Education and Labor committee to spend as much as $358 billion on new programs and the Energy and Commerce committee to spend $189 billion.
A similar shift was done with Pell Grants during the Bush administration, but this move is unprecedented in scale, said Bill Hoagland, former Senate Budget Committee staff director who’s now at the Bipartisan Policy Center.
The move could be challenged by Republicans in front of the Senate parliamentarian but it could be politically costly to oppose health-related spending, said Zach Moller, a deputy director at think-tank Third Way, who wrote a guide to reconciliation this week.
He said the new program wouldn’t need to be paid for -- through other spending cuts or with a revenue stream such as taxes -- as long as it’s temporary. -- Erik Wasson
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