US House passes $1.9tn Covid relief plan in major legislative victory for Biden | US economy

The sweeping legislation was the culmination of an aggressive push by Biden and Democrats to fulfill their campaign promise to control the virus and deliver swift economic relief as a first act after securing narrow control of both chambers of Congress and the White House. But the partisan result foreshadows the unforgiving political landscape Biden will face as he attempts to move the rest of his agenda through Congress in the coming months.

Despite promising unity and bipartisanship, he was unable to persuade a single Republican to vote for the measure, which they said was filled with liberal policies and ignored signs of economic recovery.

Still, Democrats overcame unified Republican opposition and a series of objections from more conservative members of their caucus to pass what the House speaker, Nancy Pelosi, hailed as “the most consequential legislation that many of us will ever be a party to”.

“Today we have a decision to make of tremendous consequence – a decision that will make a difference for millions of Americans, saving lives and livelihoods,” Pelosi said, arguing in favor of the bill moments before the House voted. All but one Democrat, congressman Jared Golden of Maine, supported the bill.

Biden’s 628-page bill, named the American Rescue Plan, will send direct payments of up to $1,400 to most Americans, expand aid to state, local and tribal governments, provide federal subsidies for those struggling to afford health insurance and increase assistance for housing and food. It would also spend tens of billions of dollars to expand Covid-19 testing and vaccine distribution as part of Biden’s pledge to provide enough doses for “every adult in America” by the end of May.

Several leading economists and experts have advocated for additional aid, as Democrats touted forecasts that the plan would accelerate economic growth, boosting it to levels not seen in recent decades while dramatically reducing the poverty rate.

A new analysis released on Wednesday found the legislation would dramatically reduce the number of Americans living in poverty, particularly among children and people of color.

According to the Washington-based Urban Institute, the relief package would shrink the annual projected poverty rate for 2021 from 13.7% to to 8.7%. It would more than halve the number of children living in poverty, while cutting the poverty rate by roughly 42% for Black Americans, 39% for Hispanic Americans and 34% for white Americans.

The package before the House on Wednesday was narrower than Biden’s initial proposal, which included progressive priorities subsequently either stripped out or scaled back to appease moderates like Joe Manchin of West Virginia.

The Senate-approved version, which passed the chamber in a party-line vote last weekend, tightens eligibility for the $1,400 stimulus checks, which follow the $600 payments issued through the aid bill passed in December, and restructures a proposal for unemployment benefits that Biden hoped to raise to $400 a week.

Under the new plan, unemployment benefits will remain at $300 a week but will be extended through the beginning of September, rather than August. The first $10,200 of supplements from 2020 will be made tax-free.

Notably, a provision to raise the federal minimum wage to $15 an hour – a top progressive priority – was deemed inadmissible under a budget process Democrats used to bypass Republican opposition.

Though disappointed with the concessions, progressive lawmakers ultimately rallied behind the measure. In an email on Wednesday, Senator Bernie Sanders, whose effort to include a minimum wage provision in the bill was defeated, declared the massive package a “great victory for the progressive movement and the struggling working class of our country”.

The extraordinary price tag is just shy of the $2.2tn coronavirus relief bill signed into law by Trump at the onset of the pandemic last March. The American Rescue plan is the sixth major bill adopted by Congress to address the devastation wrought by the dual public health and economic crises – spending a total of $5tn since the virus first began reshaping American life nearly a year ago.

Republicans overwhelmingly backed the five previous relief bills, negotiated by a divided Congress and signed into law by Donald Trump. But they refused to support Biden’s plan, attacking it as a bloated and misguided violation of his campaign promise to work across the aisle.

“This isn’t a rescue bill,” the House minority leader, Kevin McCarthy, said during the debate. “It’s a laundry list of leftwing priorities that predate the pandemic and do not meet the needs of American families.”

Yet the lack of consensus in Washington belies its popularity with voters across the political spectrum as well as with the business community and local and state officials of both parties. Encouraged by polling that shows broad public support for the bill, Biden and Democrats have argued that the plan is bipartisan.

Now the president and Democrats will launch an aggressive promotional campaign to sell the bill to the public, hoping to avoid a repeat of 2009, when, amid a sluggish economic recovery from the Great Recession, they failed to sell Barack Obama’s recovery bill to the public and suffered a crushing defeat in the congressional midterm elections the following year.

On Thursday, Biden will deliver the first primetime address of his presidency to mark the first anniversary after the introduction of sweeping public health measures.

“For weeks now, an overwhelming percentage of Americans – Democrats, independents, and Republicans – have made it clear they support the American Rescue Plan,” Biden said in a statement on Wednesday. “Today, with final passage in the House of Representatives, their voice has been heard.”