Many Americans are seeing $1,400 stimulus checks hit their bank accounts this weekend under President Joe Biden’s stimulus law. But people may not be able to immediately tap into it – at least, not until St. Patrick’s Day at the earliest.
The direct payments, which the IRS labeled as “Economic Impact Payments,” are set to be paid out on March 17, per the agency.
“As with the first two Economic Impact Payments in 2020, most Americans will receive their money without having to take any action,” the IRS said on its website. “Some Americans may see the direct deposit payments as pending or as provisional payments in their accounts before the official payment date of March 17.”
That means it could take several more days for the relief checks to clear at major banks like Wells Fargo. Others such as Chase said on their website it expected to release the payouts March 17 and after.
“Wells Fargo will process all of the direct deposits according to the effective date provided by the U.S. Treasury,” the bank said in numerous follow-up tweets to customers frustrated with the delay.
Some digital banks, like Chime, however, said they authorized clients to instantly access their federal cash. On Friday, they issued a “stimmy alert” on Twitter saying the service had already distributed $600 million.
Chime did not immediately respond to a request for comment on their decision.
The IRS also said Friday that people can begin tracking the status of their checks using the “Get my Payment” portal on Monday. The agency also said it expects to issue more direct deposits and send payments as a check or debit card over the coming weeks.
Singles earning up to $75,000 in adjusted gross income qualify for the full amount, along with couples making up to $150,000. Each adult dependent is eligible for a check as well.
However, the stimulus payments phase out much quicker. Individuals earning above $80,000 and couples making above $160,000 will not receive anything.
The White House said on Monday that many Americans could expect to get a $1,400 stimulus check within a few weeks.
The White House press secretary, Jen Psaki, said the Biden administration was aiming to distribute a significant number of checks this month.
“We expect a large number of Americans to receive relief by the end of the month,” she said, later adding that Treasury Secretary Janet Yellen was “focused like a laser” on getting checks out the door this month.
House Democrats are on course to approve a $1.9 trillion relief bill as soon as Tuesday. It contains direct payments in addition to other provisions such as $350 billion in aid to states, $300 weekly federal unemployment benefits, and a large expansion of the child tax credit.
Individuals earning up to $75,000 can receive the $1,400 check. Couples making up to $150,000 also qualify for the full amount.
Households above both those income thresholds could get a smaller amount, but eligibility is capped at individuals earning above $80,000 and couples making more than $160,000. Biden authorized lowering the eligibility thresholds last week after a push from moderate Senate Democrats.
Still, the vast majority of Americans would be eligible to get a direct payment. The left-leaning Institute on Taxation and Economic Policy estimated that the legislation would benefit 86% of adults and 85% of children.
It would be the third wave of one-time checks that the federal government has authorized during the pandemic. Congress early last year approved $1,200 stimulus checks, most of which the IRS sent within a month.
The Senate approved the $1.9 trillion stimulus legislation on Saturday morning, putting Democrats another step closer to locking down President Joe Biden’s first legislative achievement after a marathon period of voting. The economic aid package heads back to the House for final approval.
Republicans were united in their opposition in the 50-49 party-line vote. Sen. Dan Sullivan of Alaska was the lone Republican absent since he announced he had to fly home for a funeral on Friday.
The final vote ended a turbulent “vote-a-rama” that saw lawmakers bulldoze through at least 25 amendments into the morning hours. Senators of both parties wandered out of the chamber to stretch their legs, trying to stay awake.
Democrats fended off a barrage of proposed changes to the bill. Most of the amendments were put forward by Republicans who strongly oppose the legislation, arguing it’s too large and contains unrelated spending.
Sen. Susan Collins of Maine tried advancing a $650 billion relief plan to replace it. Then Sen. Rand Paul of Kentucky sought to tighten eligibility for small business loans. Sen. Mitt Romney pushed to require state and local governments to apply for federal aid through the Treasury Department. Democrats defeated them.
The vote-a-rama got off to a rough start for Democrats after Sen. Joe Manchin’s resistance to a new plan for unemployment benefits forced last-minute changes to the legislation. It slammed proceedings to a halt for almost 11 hours while they ironed out their differences and cut a deal.
“Make no mistake: we are going to continue working until we get the job done,” Senate Majority Leader Chuck Schumer said as the voting kicked off again.
Senate Minority Leader Mitch McConnell chastised Democrats for their handling of the bill. “My goodness. That was quite a start to this fast-track process,” he said. “This proves there are benefits to bipartisanship when you’re dealing with an issue of this magnitude.”
The new provision would reduce unemployment aid to $300-per-week until early September instead of a $400 supplement expiring at the end of that month. But it would provide tax relief on the first $10,200 in jobless payments for households earning up to $150,000.
The president appeared to be on course to sign the pandemic aid package into law within days. The legislation would provide $1,400 stimulus payments for most taxpayers; $300 weekly federal jobless aid through early September; fund vaccine distribution and testing; and provide significant assistance to state and local governments.
The House will take up the legislation sometime early next week. Speaker Nancy Pelosi already pledged that House Democrats would approve the Senate bill. They are dashing to enact the plan ahead of the March 14 expiration of enhanced unemployment insurance.
In the evenly-divided Senate, Democrats control the chamber due to the tie-breaking power of Vice President Kamala Harris. They opted to bypass Republicans using a tactic called reconciliation, a path to enact certain budgetary bills with a simple majority of 51 votes.
But the ideological cracks that emerged on Friday may foreshadow other difficulties Democrats could encounter as they move on other parts of their legislative agenda, including infrastructure, immigration, and voting rights.
“In a 50-50 Senate, every vote is precious,” Zach Moller, the deputy director of economic policy at Third Way, a centrist think-tank, told Insider. “If Democrats want to control the bill, they need to have unanimity in their party.”
The economy showed fresh signs of a recovery on Friday. The newest jobs report showed employers added 379,000 jobs in February, a significant improvement over the month before. But the economy remained nearly 9.5 million jobs below pre-pandemic levels.
Senate Democrats brokered a deal on Friday evening on unemployment benefits, clearing a major barrier for the $1.9 trillion stimulus plan. It potentially sets up final vote on the relief legislation sometime on Saturday.
Two Democratic aides told Insider that the new plan would provide $300 in federal unemployment benefits through September 6. It would also waive tax payments for the first $10,200 in jobless aid for people making up to $150,000.
Both spoke on the condition of anonymity to share internal discussions.
Sen. Joe Manchin of West Virginia did not support a new Democratic plan that would provide jobless aid through the end of September and waive taxes for the first $10,200 in unemployment aid for every person. His opposition derailed Senate debate of the relief plan for nearly nine hours.
“The President has made it clear we will have enough vaccines for every American by the end of May and I am confident the economic recovery will follow,” Manchin said in a statement. “We have reached a compromise that enables the economy to rebound quickly while also protecting those receiving unemployment benefits from being hit with unexpected tax bill next year.”
Some experts raised concern about the federal government pulling the plug on unemployment aid as the economy slowly regains lost jobs as the pandemic subsides.
“We need jobless aid in place until labor markets are recovered,” Elizabeth Pancotti, policy director of Employ America, told Insider. “I don’t think there’s a person that thinks the jobs market will recover by Labor Day. People are picking dates out of a hat until they have enough votes for them.”
Senate Democrats appear to be another step closer to fulfilling the first major part of President Joe Biden’s legislative agenda. His relief bill includes $1,400 stimulus checks for most taxpayers; $300 federal unemployment benefits through August; $200 billion in funding for schools; and funding for vaccines and virus testing.
In the evenly-divided Senate, Democrats control the chamber due to the tie-breaking power of Vice President Kamala Harris. But the ideological cracks that began emerging on Friday may foreshadow other hurdles as they try to enact other parts of their agenda, including infrastructure and voting rights.
“I think this is the indication of how we’re gonna see the Senate operate for the next two years,” Jim Manley, a former Democratic senior aide, recently told Insider. “The irony of all this is this bill was going to be the easy one and everything to come is going to be a hell of a lot tougher.
Democrats are pushing forward with President Joe Biden’s fiscal stimulus proposal, with Senate Democrats advancing the bill today. Parents are set to be among the biggest beneficiaries.
The president’s $1.9 trillion relief package is meant to accelerate the US economy’s rebound from the coronavirus recession. The legislation’s most-talked-about elements include $1,400 direct payments and an expansion of federal unemployment benefits, but the package could help American families, too.
The CARES Act, enacted last March, helped parents with direct payments for children, but Democrats are looking to further alleviate families’ economic pressures.
Biden has indicated he aims to pass the measure with bipartisan support, but congressional Democrats have taken steps to pass it through budget reconciliation, a process that allows the Senate to pass bills with a simple majority.
Should all 50 Senate Democrats line up in support of the package, Vice President Kamala Harris would cast the tie-breaking vote, approving the measure without any Republican backing.
Here’s how Biden and congressional Democrats plan to support parents through the coronavirus recession, from an expanded child tax credit to new aid for childcare providers.
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1. At least $3,000 in direct annual payments
Congressional Democrats proposed that the American Family Act form a critical part of Biden’s rescue package. Biden told House Democrats on Wednesday he supports making the temporary beefed-up child tax credit permanent, Insider’s Joseph Zeballos-Roig reported, the first time the president has indicated such support.
The child-tax-credit program would, over the course of 2021, provide families $3,600 per child 5 and under, and $3,000 per child between 6 and 17. That would be up to $300 in monthly cash benefits per child for American families.
The initiative would be set up as a one-year emergency federal program, with the IRS doling out monthly benefits beginning July 1 to ease childcare costs and assist families who lost income during the pandemic. Some experts have deemed the timeline ambitious, considering tax season and the pandemic.
Nina Olson, the former head of the Office of the Taxpayer Advocate, noted that the IRS spent years building a framework for Obamacare’s premium tax credit.
“It is fine to authorize the payments, but there needs to be at least 18 months’ lead time, and even that is a stretch,” Olson told Politico. “Otherwise you just get something that is tacked on to mid-20th-century technology that is completely inflexible.”
One of the legislation’s sponsors, Rep. Rosa DeLauro of Connecticut, the chair of the House Appropriations Committee, has insisted a monthly rollout is better. “Nobody pays their bills once a year – you pay your bills each month,” she said at a virtual news briefing on the plan. “The design makes more sense and helps families make ends meet through difficult months.”
The payments could start phasing out for individuals earning $75,000 and for couples making $150,000, though this could change in the coming weeks as committees draft the legislation. The credit would be refundable, meaning lower-income families could see higher tax refunds.
Researchers at Columbia University projected that the plan could cut the child poverty rate in half. The Biden administration has indicated support, and Democrats said they’d likely press for a permanent extension later this year.
2. ‘Baby bonds’
Democrats also unveiled a plan to create $1,000 savings accounts for every American child that become accessible when they turn 18. The measure, backed by Sen. Cory Booker of New Jersey and Rep. Ayanna Pressley of Massachusetts, would add up to $2,000 to each child’s account every year.
Pressley said that introducing this so-called baby bond as a birthright would combat racial and economic injustice and set Americans up for brighter futures.
“Our bill will provide every child an opportunity to pursue higher education, purchase a home, and build wealth for generations to come,” she said in a statement.
The interest-accruing accounts would be managed by the Treasury Department. Holders could tap the account once they reach 18, and the funds could be used for only specific kinds of purchases, a 2018 press release unveiling the proposal said. Some of those are buying a home, paying for higher education, or opening a business – taking some pressure off parents who might have had to shoulder those costs.
The measure isn’t included in Biden’s proposal, but it has garnered support from influential party members including Senate Majority Leader Chuck Schumer and Sen. Bernie Sanders, the chair of the Senate Budget Committee.
Booker has said the program’s $60 billion-a-year price tag could be easily offset by lifting estate taxes and eliminating tax breaks for the wealthy. While some federal policies have exacerbated the income gap, baby bonds could start to “level the playing field,” he said.
These funds are designed to help make schools a safe space during the pandemic, Biden’s website said. The proposal outlines reduced class sizes, modified spaces for social distancing, improved ventilation, provisions for personal protective equipment, and increased transportation to provide for social distancing on buses. Some of the funds would be allocated toward support for students’ academic, social, and emotional needs through things like extended learning time and counselors.
The aid is intended to close the digital divide that has deepened the socioeconomic gap. Some of the money would go to a COVID-19 Educational Equity Gap Challenge Grant for underserved communities and schools.
Public education, including community colleges and historically Black colleges, would get $45 billion, and $5 billion would go to governors to use for educational programs for both K-12 and higher-education students significantly affected by the pandemic.
“The COVID-19 pandemic created unprecedented challenges for K-12 schools and institutions of higher education, and the students and parents they serve,” Biden said in a statement in January when he first pitched the plan. “School closures have disproportionately impacted the learning of Black and Hispanic students, as well as students with disabilities and English language learners.”
4. Childcare assistance
Childcare would form a $40 billion chunk of the package, with $25 billion earmarked for an emergency stabilization fund for care providers.
“No one can go back to work in other industries if their children aren’t in safe, healthy settings,” said Ami Gadhia, the chief of policy, research, and programs at Child Care Aware.
Another $15 billion investment would expand childcare assistance to millions of families and parents who experienced job interruption due to the pandemic. The relief aims to help the disproportionate number of women who were forced to exit the workforce and become family caregivers.
The plan also seeks to provide a tax credit for as much as half of parents’ spending on childcare for children under 13. The credit could reach up to $4,000 for one child or $8,000 for two children. The full 50% reimbursement would start to phase out for families making more than $125,000 a year.
The Senate parliamentarian ruled on Thursday evening that a $15 minimum wage provision cannot stay in the President Joe Biden’s $1.9 trillion stimulus package, according to a Senate Democratic aide familiar with the decision.
The parliamentarian, Elizabeth MacDonough, said the provision’s effect on the federal budget was “merely incidental,” the aide said. That violates the strict guidelines under the reconciliation process that Democrats are employing to approve the legislation in the Senate with a simple majority of 51 votes – and circumvent Republicans.
The decision deals a major blow to progressives and Sen. Bernie Sanders, who championed the $15 minimum wage as a pay raise to hourly workers. The federal minimum wage stands at $7.25 an hour and Congress hasn’t raised it in over a decade.
He played a critical role pushing the minimum wage increase through the complex process. Sanders chairs the Senate Budget Committee, which has jurisdiction over reconciliation.
Sanders released a statement on Thursday evening criticizing the parliamentarian’s decision. “It is hard for me to understand how drilling for oil in the Arctic National Wildlife Refuge was compliant with the Byrd rule, but raising the minimum wage is not,” the Vermont Democrat said, referring to a part of the 2017 GOP tax law.
He added he would introduce an amendment to “to take tax deductions away from large, profitable corporations that don’t pay workers at least $15 an hour and to provide small businesses with the incentives they need to raise wages.”
However, at least two Democratic senators opposed a $15 minimum wage, and their resistance would have dampened its odds of passage anyway. Sen. Joe Manchin of West Virginia said on Monday he would push to amend the wage increase to $11 an hour instead if it was included in the final package.
Senate Democrats are vowing to approve the bill ahead of March 14, the date when enhanced unemployment insurance programs will start ending for millions of Americans.
The House’s draft of the proposal would provide $1,400 stimulus checks and $400 federal unemployment benefits through August. It also includes $160 billion for vaccine distribution virus testing and significant aid for state and local governments.
House Democrats on Wednesday were setting the stage for a floor vote on Friday, as their Senate counterparts waited for a key ruling that would determine whether a $15 minimum wage could be included in the stimulus package.
In a press call, House Majority Leader Steny Hoyer said Democrats aimed to “pass a final bill and send it to the president by the 12th of March.”
That deadline would be two days before enhanced unemployment insurance programs start ending for many jobless Americans, including a $300 weekly federal supplement. Democrats have continued trying to gather support for the plan.
“Right now, it’s more important than ever that we do everything that we can to crush the virus, rebuilding our economy for working people and families that need the support to get back on their feet,” Rep. Pete Aguilar told reporters.
Republicans are strongly opposed to the Democratic plan, arguing it contains a litany of progressive priorities.
“They’re gonna try to muscle it through on a totally partisan basis,” Senate Minority Leader Mitch McConnell said on Tuesday. “It also includes a number of things that have absolutely nothing to do with COVID.”
The floor vote would send the legislation to the Senate, which is expected to take it up next week. The House bill includes $1,400 stimulus checks, $400 federal unemployment benefits, and aid to state and local governments.
It also includes a gradual increase of the federal minimum wage to $15 an hour – a measure that has been a lightning rod of criticism among Republicans and several Democrats.
Democrats are employing a tactic known as reconciliation to shield the package from a filibuster. It only needs a simple majority of 51 votes to get through the Senate, instead of the usual 60.
But reconciliation has strict budgetary rules, including a set of requirements that every element has a substantial impact on federal spending, the debt, and revenue over 10 years. The Senate parliamentarian governing the process will decide whether the minimum wage boost complies with those guidelines.
Democrats and Republicans made their cases to the parliamentarian early on Tuesday morning. A ruling on the wage bump could come later on Wednesday or early Thursday.
Still, some Democrats like Sen. Joe Manchin of West Virginia are opposed, complicating the bill’s path to final approval. He has said he would push for an increase to $11 an hour instead. A ruling that the wage increase complies with the rules of reconciliation may set off another furious round of negotiations on a middle ground.
“I’m an optimist,” Sen. Dick Durbin of Illinois told reporters. “I think even though several Democrats have some concerns that we can still find a basis for agreement.”
The Biden administration has pressed for a $15 minimum wage in the package. But White House officials have said that Senate Democrats will be in charge of striking a possible deal on a smaller wage increase.
“The compromise will be between members of the Senate who may have disagreement on where the minimum wage should sit or what the process should be,” White House Press Secretary Jen Psaki said on Wednesday.
Democrats on Wednesday also struggled to confirm Neera Tanden, Biden’s pick to head the Office of Management and Budget. Two committee votes on her nomination were cancelled earlier in the day, sowing further doubt about whether she can get enough votes in the Senate to be confirmed.
Senate Democrats want to enact a new $1.9 trillion rescue package within weeks, but one major hurdle stands between them and the bill’s final passage: whether it will include a $15 minimum wage increase.
Once the House approves the legislation and sends it to the Senate, the wage provision is likely to spark some clashes among Democratic senators. The minimum-wage increase in the Biden rescue plan would be phased in over five years and eliminate tipped wages.
Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona have both said they oppose the measure. The resistance of these two lawmakers imperils the measure even if it clears all the hurdles required of a reconciliation package (the strict budgetary procedure that Democrats are employing to bypass Republicans). A looming ruling from the Senate parliamentarian will likely pose obstacles.
“There might be a few other Democrats with pretty significant concerns about the minimum wage increase,” Jim Manley, a former senior Democratic aide, said in an interview. “No matter how the parliamentarian rules, I’m not sure the votes are there in the Senate to increase the minimum wage to $15 an hour.”
The Senate parliamentarian serves as a neutral arbiter of reconciliation, a process that will allow Democrats to approve a bill with a simple majority of 51 votes in the upper chamber instead of the usual 60. Reconciliation requires every provision of a bill to be related to the federal budget, or else the parliamentarian can toss it out.
If the minimum wage doesn’t survive this process, that could complicate Democrats’ swift timeline for approval, targeted for mid-March. But even if it does survive, in an evenly divided chamber where Vice President Kamala Harris can break ties, every Democrat must support the final package.
Sen. Bernie Sanders, chair of the Senate Budget Committee with jurisdiction over reconciliation, told reporters on Tuesday a ruling may come in the next day or two. Progressives like Sanders are championing the measure as a boon to low-paid workers.
$11 an hour versus $15 an hour
The federal minimum wage hasn’t been raised from $7.25 since 2009, and labor advocates say a bill should lift wages for essential workers and others putting themselves at risk in the pandemic.
“To say that we can support jobless workers, teachers, caregivers, and medical professionals without supporting workers earning $7.25 an hour isn’t just bad policy, it’s inhumane,” Elizabeth Pancotti, policy director of Employ America, said on Twitter. “Economic relief must include raising the minimum wage.”
But Republicans argue that raising wages during a pandemic would cause employers to shed jobs. Some Democrats share those concerns as well.
“I think small business has got to be kept in mind, and I think there are a number of different variations that are being proposed that help insulate the impact in terms of small business,” Sen. John Hickenlooper of Colorado told the Wall Street Journal.
A report from the nonpartisan Congressional Budget Office indicated the $15 minimum wage plan would cause 1.4 million job losses, but lift 900,000 people out of poverty.
There is some GOP support to raise wages. On Tuesday, Sens. Mitt Romney and Tom Cotton introduced legislation to raise the minimum wage to $10 over four years once the pandemic is over. They would also tie it to mandatory use of the E-Verify program so employers can keep tabs on the immigration status of their workers.
“If we don’t have the $15 proposal as part of reconciliation, we’ll need to sit down and work on a bipartisan proposal,” Romney told reporters on Tuesday. “And we’re open to considering other people’s points of view.”
But many Democrats are eager to press ahead on their own without Republican votes. Sanders recently expressed confidence that the pay bump would clear the stringent reconciliation process and garner enough Democratic votes for passage.
“I think we’re going to pass it as it is,” he told reporters on Monday. “The Democrats are going to support the president of the United States and the overwhelming majority of the American people want to pass this Covid emergency bill.”
But that’s not holding back some Democrats from pitching ideas about a lower wage increase in the final legislation. Manchin told reporters on Monday evening he would try to offer an amendment to the legislation.
“I would amend it to $11,” he said. “We can do $11 in two years and be in a better position than they’re going to be with $15 in five years.”
The $15 minimum wage enjoys strong public support. Over 60% of respondents in a new Insider poll published Tuesday would definitely or probably support a $15 minimum wage.
Democrats aim to pass President Joe Biden’s $1.9 trillion economic rescue plan in only a matter of weeks.
The House Budget Committee kicked off a markup session on Monday afternoon which is set to last at least five hours, according to Rep. John Yarmuth (Ky.), chair of the Budget Committee. The panel is expected to approve the legislation and send it to a floor vote.
Here’s the Democratic calendar for coronavirus relief, based on statements from Democratic officials:
February 25-27: The House is expected to vote on passage of the government rescue plan.
March 2-5: The Senate takes up the legislation, and possibly amends it before a vote.
March 8-12: The House votes on the rescue package again if the Senate makes legislative changes.
Democrats have a narrow margin of error. They are pledging to enact the package before March 14, the date that enhanced unemployment benefits for millions of Americans starts ending.
Rep. Don Beyer of Virginia, vice chair of the Joint Economic Committee, told Insider that Democrats will “do our damnedest to meet it.”
The House proposal would also provide $1,400 stimulus checks and $400 federal unemployment benefits through August It also includes funding for vaccine distribution and virus testing, aid for state and local governments, and a $15 minimum wage increase.
Still, some key hurdles remain in the Senate. Democrats are using a process called reconciliation that allows them to pass a budgetary bill with only 51 votes instead of 60.
The Senate parliamentarian governing the procedure may rule the wage increase is unrelated to the federal budget and strike down the provision, setting back the timeline. On the other hand, the wage increase’s sponsor, Budget Committee Chairman Sen. Bernie Sanders (I-Vt.), obtained a letter from the Congressional Budget Office saying it would have a sizable impact on the budget.
In recent weeks, Biden has downplayed the odds it would survive the process, though he still supports the measure.
Republicans are uniformly opposed to the Biden plan. They argue it is too costly and that a previous round of aid enacted in December still hasn’t been fully tapped.
Democrats are on course to approve $1.9 trillion in emergency pandemic spending within the next month. It would be yet another large infusion of federal aid only months after Congress passed a $900 billion aid package in December.
But Democrats show few signs of hitting the brakes anytime soon on federal spending. Instead, President Joe Biden is indicating he may press his foot on the gas and shrug off the growing federal debt.
“In order to grow the economy a year or two, three, and four down the line, we can’t spend too much,” Biden said on Tuesday during a CNN town hall. “Now is the time we should be spending. Now is the time to go big.”
It’s a remarkable split for Democrats a decade after the Great Recession. Confronted with the worst economic downturn in generations, President Barack Obama enacted an $800 billion stimulus package in February 2009. Many economists and Democrats now say it was inadequate to address the fallout of the financial crisis.
Previous efforts in Congress on infrastructure legislation collapsed during President Donald Trump’s term. Now, Democrats are in the early stages of a sprawling effort that could encompass jobs, climate change, and energy. They appear emboldened by the Federal Reserve promising to keep borrowing costs low for the near future. Fed Chair Jerome Powell also recently called for a “society-wide commitment” to recover lost jobs.
Rep. Don Beyer (D-Md.), vice chair of the Joint Economic Committee, told Insider that House Democratic leaders discussed a follow-up package this week with at least $2 trillion in further spending.
“I think the number one priority for the White House and Congress will be to build the climate initiatives we’ve so much wanted into an infrastructure bill,” Beyer said in an interview. “The second big thing would be accessible, affordable broadband in rural America and lower-income, urban America.”
The mass blackouts in Texas caused by an Arctic winter storm may add momentum to Democrats urging a major plan to revamp the nation’s infrastructure. Some senior Democrats are starting to press for wide-ranging legislation that comes with tax increases on the wealthy and large businesses.
“The catastrophe in Texas has underscored the urgent need to address the climate crisis and rebuild our infrastructure,” Sen. Ron Wyden (D-Oregon), chair of the Senate Finance Committee, said in a statement to Insider. “In the recovery package, my priorities will be making these critical investments by ensuring the wealthy and mega-corporations pay their fair share.”
Wyden added he would introduce proposals next month to remake the energy tax code and boost clean-energy manufacturing. He also said it was an “an opportunity to undo years of neglect” of roads, highways, and bridges by putting people to work repairing them.
“The past week has hopefully reminded all of my Republican colleagues that there’s no escaping the effects of climate change and broken infrastructure,” Wyden said.
“Historic investments in infrastructure”
The follow-up economic proposal after the Democratic rescue package will differ in two significant ways. The first is instead of delivering immediate relief to families and struggling businesses, the plan will be directed at sparking long-term economic growth.
White House Press Secretary Jen Psaki said on Wednesday that Biden’s plan “will make historic investments in infrastructure – in the auto industry, in transit, in the power sector – creating millions of good union jobs, and in the process, also addressing the climate crisis head-on.”
The second is Democrats are expected to try and finance permanent parts of the initiative through new taxes instead of deficit spending to offset its addition to the national debt. Last year, Congress and President Trump approved $4 trillion in relief spending to put the economy on life-support and stem the rate of coronavirus infections.
Beyer, a member of the tax-writing House Ways and Means Committee, said he believed many Democratic members of the panel “would really prefer there be a pay-for.” The committee held a hearing early last year on funding infrastructure and one possible method under discussion at the time was raising the gas tax, a step not taken since 1993.
Biden administration officials say they are still hammering out the plan’s details. Treasury Secretary Janet Yellen said in a CNBC interview on Thursday that tax hikes on wealthy Americans and corporations would form part of the bill, though they would be gradually implemented.
It’s unclear how much of a package would be covered with new sources of revenue, though up to half is a possibility. During his presidential run, Biden signaled he was open to a 0.1% financial transactions tax on the selling and trading of stocks and bonds. The nonpartisan Congressional Budget Office estimates such a tax could raise $777 billion in revenue over ten years.
“We can’t have a repeat of their COVID bill”
Democrats are grappling with difficult math over the next two years. They control the evenly-divided Senate because Vice President Kamala Harris casts the tie-breaking vote.
Should they use reconciliation to bypass Republicans, Democrats cannot afford any defections – a steep climb given wide differences in views on how aggressively the federal government should move to tackle the climate crisis, create shovel-ready jobs, and levy taxes.
Sen. Joe Manchin (D-W.Va) last month said he supported up to $4 trillion in infrastructure spending. A conservative Democrat, Manchin’s support will likely prove critical to the success of Democratic legislation.
There are Republicans who support upgrading American infrastructure, making a path to a bipartisan deal possible. But drawing 10 Senate Republican votes could lead to difficult trade-offs some Democrats view as unacceptable.
Sen. Bill Cassidy (R-LA), part of a Republican working group that pitched a $618 billion stimulus plan to Biden last month, said any infrastructure measure must be restrained in size and scope.
“We can’t have a repeat of their COVID bill,” Cassidy said in a statement to Insider. “To be successful, any action on infrastructure must be targeted spending and focused on real needs like expanding access to broadband in rural areas and fixing our crumbling bridges.”
Other Republicans said they were reluctant to support a infrastructure plan carrying a major price tag.
“The main thing is that I want to be careful,” Sen. James Inhofe of Oklahoma told Capitol Hill reporters after a White House meeting with Biden on the issue earlier this month. “When you’re working on infrastructure, that’s high dollars.”
The hesitation from Republicans clashes with Democrats eager to embark on robust federal spending – and wield the full power of their control of Congress and the White House.
“We’re only going to get a limited amount of bites at the reconciliation apple,” Beyer told Insider. “Now that we have Chuck Schumer running the Senate, Joe Biden as president, and a 2022 election that will be very contested, we better use our legislative power while we have it.”