New Rescue Bill Trims Jobless Benefits, Stimulus Checks

President Biden speaks following passage of the American Rescue Plan.

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President Joe Biden’s $1.9 trillion pandemic relief bill cleared its biggest hurdle over the weekend—the Senate—but not before members of his own party, not Republicans, scaled back some of the key benefits.

Key Takeaways

  • While the Senate approved President Joe Biden’s economic relief package, it was entirely along party lines and not completely intact.
  • Moderate conservative Democrats demanded concessions, getting narrowed eligibility for stimulus checks, reduced unemployment payments, and other changes. 
  • The amended bill is slated to go for a final vote back in the House Tuesday.
  • Biden has indicated he will sign the amended bill.

After compromises with more moderate Democrats like Sen. Joe Manchin of West Virginia, the federal supplement to unemployment insurance won’t go up by $100 a week, instead staying at $300, and those earning at least $80,000 a year won’t get a stimulus check.An amended version of the bill passed by the House of Representatives last month now returns to the House and is slated for a Tuesday vote, and, assuming it passes, Biden’s signature.

“This nation has suffered too much for much too long,” Biden said in remarks delivered from the White House Saturday, pledging to sign the amended bill. “Everything in this package is designed to relieve the suffering and to meet the most urgent needs of the nation and put us in a better position to prevail, starting with beating this virus and vaccinating the country.” 

The process of compromise “wasn’t always pretty,” Biden said, but it was urgently needed. Indeed, Sen. Mitch McConnell of Kentucky, the Republican leader in the Senate, said Sunday, “The Senate has never spent $2 trillion in a more haphazard or less rigorous way.” The final 50-49 vote was entirely along party lines.

Some of the more notable compromises include: 

  • A narrowed eligibility for stimulus payments: While the cutoff for the maximum stimulus check payment of $1,400 is still $75,000 in annual income for single taxpayers ($150,000 for married couples), only those earning up to $80,000 ($160,000 for married couples) are eligible for a reduced payment. That threshold is much lower than the House version, which wouldn’t have phased the payment out entirely until annual income reached $100,000. The change means 16.4 million people won’t get any check, according to the Institute on Taxation and Economic Policy (ITEP), a non-profit, non-partisan tax policy organization. (Those who file as heads of household can get the full $1,400 if they earn up to $112,500, but the reduced payment phases out at $120,000, rather than $150,000 in the House version.) 
  • Smaller unemployment payments: Those collecting unemployment benefits are currently getting a federal supplement of $300 a week, and the Senate version will extend that to Sept. 6, reinstating a provision that was set to expire in the middle of this month. But the amount of the supplement, $400 in the House version, was scaled back to $300.
  • No provision to raise the federal minimum wage: The House version had included an increase to $15 an hour, from the current $7.25, but that was taken out of the Senate version. Sen. Bernie Sanders of Vermont, who championed the proposal, said Friday the issue isn’t going away: “If any Senator believes this is the last time they will cast a vote on whether or not to give a raise to 32 million Americans, they are sorely mistaken. We’re going to keep bringing it up, and we’re going to get it done because it is what the American people demand and need,” he said in a statement.

Progressives did score one notable win in the Senate negotiations, adding a provision that had not been included in the House version of the bill: 

  • A tax break for many workers who received unemployment benefits: The first $10,200 of unemployment benefits received in 2020 will not be taxable for households earning less than $150,000. Less than 40% of unemployment insurance benefits had taxes withheld from them, estimates the Century Foundation think tank. 

Having survived the gauntlet of conservative opposition in the Senate, the bill now has to weather fire from the opposite side of the aisle. While Sanders ultimately voted for the bill despite the minimum wage increase being removed from it, the compromises were met with disdain by some members of the House, where the bill originally passed by a narrow 219-212 margin.

“What are we doing here?” tweeted Rep. Bonnie Watson Coleman of New Jersey. “I'm frankly disgusted with some of my colleagues and question whether I can support this bill.”

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