Senate Democrats broker last-minute deal on unemployment benefits, clearing major hurdle for $1.9 trillion stimulus plan

Joe Manchin
In this Feb. 13, 2021, file photo Sen. Joe Manchin, D-W.Va., departs on Capitol Hill in Washington

  • Senate Democrats struck an agreement on Friday evening on unemployment benefits.
  • The new plan would provide $300 weekly jobless aid through Sept. 6, cutting a month.
  • It would also provide tax forgiveness for people making up to $150,000.
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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.

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