A $1.9 Trillion Compromise Just Passed the Senate by Slimmest of Margins

Mish

The Senate just passed a Covid package. Let's take a peek at what's inside.

Slimmest of Margins

By a 50-49 margin, Senate Democrats pass a $1.9 Trillion Covid-19 Relief Plan.

The Senate approved the package along party lines, 50-49, after deliberating all of Friday and into Saturday morning. The package now heads back to the House, which must approve the Senate-revised legislation before sending it to the White House for Mr. Biden’s signature. 

Sen. Joe Manchin (D., W.Va.) brought the chamber to a standstill for much of Friday, when he balked at a Democratic proposal to extend federal jobless benefits until Oct. 4. 

Longest Recorded Vote in History

Democratic leaders held open an amendment vote during the negotiations with Mr. Manchin for nearly 12 hours, making it the longest recorded vote in modern Senate history.

Sen. Dan Sullivan, R-Alaska, was not present due to a family emergency. Thus  Vice President Kamala Harris did not have to break a 50-50 tie. 

The bill now heads back to the House where Biden recommends passage. If the Progressives hold out for more, it will delay or even fail passage.

What's In the Compromise?

  1. Current $300 weekly benefits extended through Sept. 6.  
  2. $1,400 direct payments to many Americans
  3. Senate Democrats lowered the weekly payments to $300 from their $400 level in the House bill, phased out $1,400 direct payments more quickly for some households and stripped out a minimum-wage increase that had passed the House last weekend.
  4. The first $10,200 of the 2020 unemployment benefits will be nontaxable for households making less than $150,000.
  5. $350 billion direct aid to state and local governments,
  6. An amendment by Tom Carper (D, Delaware) to extend by a year limits on how much high-income earners can deduct certain business losses passed.
  7. Temporary expansion of Child Tax Credit of up to $3,600 for one year through 2021
  8. $34 billion to expand Affordable Care Act subsidies 
  9. $14 billion for vaccine distribution.

Boondoggle 

Much of this is a big boondoggle as noted previously. 

I disagree with at least some aspects of points 2, 3, 4, 5, and 7. I do not know the details of points 6 and 8. I endorse point 9. 

Money should not go to anyone who did not lose their job, people should not make more being unemployed than they did employed. And there should be no handouts to states. 

I discussed point 5 in detail in Democrats Propose a "Fair Way" Forward. Who Gets the Free Money?

Also check out Mitt Romney Explains Biden’s Stimulus Bill Is a $1.9 Trillion Clunker

The best provision on the compromise bill is what's not in it. The Senate did not pass Bernie Sanders' minimum wage hike. 

Mish

Comments (26)
No. 1-18
Anda
Anda

So this is the same as total government outlays in 2001 if I read

correctly ? Just for perspective. I guess it's happy hour, I mean day, no week, that was meant to be month, but is really year...and...more... but dare say it isn't deserved...or right...ever...

yanee
yanee

I've got the same concerns as you do, seems like overkill in a lot of ways. If the states don't have a ton of restrictions on the money they get it could be a good thing but also still seems like mostly overkill. Filling a property tax revenue gap would be good, outside of that, each state/city will have their own issues or none at all.

One thing I'd heard in the beginning but not again since was that the bill included a provision to extend the eviction moratorium until September... is that still a thing? We kicking that can down the road some more?

Jojo
Jojo

"Sen. Dan Sullivan, R-Alaska, was not present due to a family emergency. Thus Vice President Kamala Harris did not have to break a 50-50 tie."

It's crazy that in 2021, a Senator is allowed to vote ONLY in person!

numike
numike

When do I get my check??

Jojo
Jojo

A $1400 one time payment isn't going to do much for struggling people. Perhaps it pays one month rent or some other bills. But what happens after that? It would have been better to give everyone in the under $80k/year cohort an extra $500/month for the rest of the Federal fiscal year. That would trickle up into the economy.

Doug78
Doug78

I would say from the data as much as I can glean from it that we are roughly back to a level of an event like 2008 at its lowest level at that time. If we stop the stimulus here we would have a years-long slog to get back to any type of prosperity. We cannot afford it. We have to get back to a reasonable economic situation as fast as possible. It would be nice to have the money going only to those who need it but that is not possible simply because we do not have the means or the will to micromanage the payments. Money will go to those who don't need it. Money will go to those who worked throughout the pandemic and I must say that most of them are essential workers who didn't work from home. They kept the economy and people alive so I have no problem with them getting something extra. They deserve it. There will be other stimulus packages because we have a long way to go to get back to where we were. If balanced budgets were the aim then the government should not have ordered lockdowns throwing millions out of work and should have just powered through (whatever that means). They made a decision, a courageous one, and stopping in the middle of the stream to change horses now is folly. Get people back to work and making money and we will figure it out later.

Greggg
Greggg

... and the winner is... the unicorns.

JaymayLA
JaymayLA

Congress has voted to print about 4 trillion dollars in the past year. So voting against raising the minimum wage is actually a vote to substantially lower the minimum wage in the near future, in inflation adjusted terms. The labor market is going to be constricted because the disruptions of the pandemic for many months if not years to come, so there will be downward pressure on wages at the low end regardless. So for the people who ARE out there working jobs that have to get done, like stocking your groceries and processing your meat, who have exposed themselves and their families to a drastically increased risk of sickness, voting against a minimum wage increase is a vote to take money out of their pockets. Good to know where you stand, Mish.

Six000mileyear
Six000mileyear

When my significant other read the bullet points of the "Stimulus" package, she immediately rushed into the kitchen and began to make the same arguments against it as MISH made. I replied, "Welcome to the Republican Party."

BobSmith
BobSmith

This is just the beginning, there will probably be an Infrastructure "investment" bill soon, and I think minimum wage will be increased to $11, I don't think $15 can pass the Senate.

davebarnes2
davebarnes2

"I replied, "Welcome to the Republican Party."
Really?
You expect the owner of the GOP to make policy arguments?
Fat Donnie wanted $2000. Remember?

Jackula
Jackula

The direct payments were meant to keep the whole debtburg afloat in conjuction with FED operations, not necessarily to help those in need hence the fighting against lowering the cap on the direct payments.

RunnerDan
RunnerDan

"$1,400 direct payments to many Americans"...and non-US Americans (i.e., illegal aliens) along with the incarcerated to boot.

Casual_Observer
Casual_Observer

GOP may as well rename themselves to GNOP. They are the party of NO to everything. Except when it comes to saving lives that are already living.

TomTheBozo
TomTheBozo

How to know how much money will go to each state?

KidHorn
KidHorn

Just sign the damn thing and move on. I think Biden will. I hope Pelosi doesn't try to grandstand over some minor detail.


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