“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. 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,” Manchin said in a statement.
The deal offers tax forgiveness on up to $10,200 in unemployment benefits for those making under $150,000 a year, the Manchin statement said. Also the deal would extend enhanced unemployment benefits through Sept. 6.
The deal revived action on Biden’s relief bill, his first major legislative initiative, which had stood in limbo in the Senate over hours of uncertainty after an earlier attempted compromise on unemployment insurance unraveled — raising questions about Democrats’ ability to govern with a 50-50 Senate.
With Manchin on board, Democrats are now within reach of passing the sweeping legislation that sends out a new round of $1,400 stimulus checks, $350 billion to cities and states, $130 billion to schools and billions for a national vaccine program — although they’ll have to plow through dozens of other amendments first in a chaotic process known as a “vote-a-rama.”
The legislation will also have to go back to the House for final passage before getting sent to Biden to sign, something that’s expected to happen early next week. House Speaker Nancy Pelosi (D-Calif.) has guaranteed the House will pass the Senate’s version of the bill, though House liberals were voicing growing discomfort over changes pushed by Senate moderates they said watered down the bill.
The announcement of the final deal with Manchin capped a confounding day that began with Senate Majority Leader Charles E. Schumer (D-N.Y.) vowing passage of Biden’s first major legislative initiative — only to watch the process go off the rails as it became clear Manchin was not on board with an earlier version of the unemployment insurance agreement.
As originally passed by the House, the legislation would increase the existing $300 weekly benefit to $400 and extend it to August. The benefits are now set to expire March 14, which Democrats and the Biden administration are eyeing as the deadline for passing the wide-ranging relief bill into law.
But Manchin had voiced persistent concerns about increasing the unemployment benefits, suggesting that doing so could keep workers from rejoining the workforce just as the economy tries to get back on its feet. So Friday morning Democratic aides announced that an agreement had been reached on a compromise amendment, to be offered by Sen. Thomas R. Carper (D-Del.), that would keep unemployment benefits at $300 a week and extend them through September, while also making the first $10,200 in benefits nontaxable to avoid tax shock hitting some Americans who’ve received the benefits.
Instead of clearing the way for action on the legislation, however, the supposed deal brought action on the Senate floor to a standstill for hours as Manchin huddled with Republicans who were offering competing amendments — and multiple other senators and aides milled about with little clear idea of what was happening.
In its final form, the deal extends the $300 weekly benefit to Sept. 6, instead of through the end of September, and makes tax relief available only to those with household incomes below $150,000.
Despite Democrats’ ultimate success in breaking the logjam, the baffling developments underscored the challenges Biden faces in getting his agenda through Congress given the exceedingly narrow Democratic majorities in both chambers. After disavowing bipartisan negotiations to pass a sweeping relief bill opposed by the GOP, Biden confronted a scenario where a single balky moderate Democrat had the ability to upset his plans.
As the day wore on, Sen. John Thune (R-S.D.) and others jokingly expressed concern for Manchin, who single-handedly had the ability to throw Biden’s first major legislative effort off-track.
“I hope the Geneva Conventions applies to him,” Thune said.
“Save Joe Manchin!” said Sen. Lindsey O. Graham (R-S.C.).
The extended unemployment benefits are just one piece of a much larger bill that Biden insisted anew on Friday was critical to shoring up the economy and helping to stabilize the health-care system.
“The rescue plan is absolutely essential to turning this around, getting kids back to school safely, giving a lifeline to small businesses and getting the upper hand on covid-19,” Biden said at an event at the White House.
The uncertainty around the unemployment insurance provisions arose as the Senate was about to plunge into the grueling “vote-a-rama,” which involves votes on dozens of amendments, one after another, hour after hour until senators exhaust themselves and stop. The first to be offered was by Sen. Bernie Sanders (I-Vt.) on trying to restore a $15 minimum wage to the legislation.
The Senate was poised to defeat Sanders’s move, with Republicans united against it along with eight Democrats — but the vote was held open for hours to accommodate the drawn-out behind-the-scenes negotiations on jobless benefits.
As the day began, Schumer vowed to stay in session until Democrats passed the bill.
“We need to get this done. It would be so much better if we could in a bipartisan way, but we need to get it done,” Schumer said. “We’re not going to make the same mistake we made after the last economic downturn, when Congress did too little to help the nation rebound. … We’re not going to be timid in the face of big challenges.”
Following Schumer on the Senate floor, Minority Leader Mitch McConnell (R-Ky.) lambasted Democrats for using a partisan procedure to rush through the giant legislation after Biden campaigned on promises to unify the nation — but conceded there was little Republicans could do to stop it.
“In this supposed new era of healing leadership we’re about to watch one party ram through a partisan package on the thinnest of margins,” McConnell said. “Go figure.”
Friday’s debate kicked off after Sen. Ron Johnson (R-Wis.) forced Senate clerks to read the entire 628-page bill aloud, a process that took almost 11 hours and concluded around 2:05 a.m. Friday. That came after the Senate voted 51 to 50 on party lines Thursday afternoon to open debate, with Vice President Harris breaking the tie. The partisan vote to start debate was a likely sign of the final outcome, although Sen. Lisa Murkowski (R-Alaska) said she was still examining the bill after Democrats made some last-minute changes that could help her state and others.
The last-minute wheeling-and-dealing was a sign of Democratic leaders’ determination to hold together to pass Biden’s first major legislative initiative. It would be one of the largest bills ever enacted in congressional history, and its passage would stand as an early success for the new president, who has insisted it is necessary to stabilize the economic recovery and ensure the nation gets vaccinated.
Senate Democrats are moving the legislation forward under a process called “budget reconciliation” that allows it to pass with a simple majority, instead of the 60 votes often required. The complicated rules governing reconciliation bills also prohibit certain items without a particular budgetary impact. The Senate parliamentarian ruled last month that the minimum wage increase, a top priority for many liberals, did not pass that test.
Beyond unemployment insurance, other controversies loomed on the relief bill as Republicans readied dozens of amendments on everything from energy exploration to abortion.
“Republicans have many ideas to improve the bill, many ideas, and we’re about to vote on all kinds of amendments in the hope that some of these ideas make it into the final product,” McConnell said.
Even before the late change on unemployment benefits, Biden and Democratic leaders already had agreed to some other changes aimed at addressing concerns raised by moderate Democrats, including narrowing eligibility for stimulus payments and earmarking some of the state and local funding for capital projects.
Congress passed a series of bills last year totaling some $4 trillion to fight the pandemic, including $900 billion in December, and Republicans said that was more than enough.
The debate came as the U.S. economy saw encouraging news on Friday in a jobs report showing 379,000 jobs had been added in February. Still, the unemployment rate remained dramatically elevated above pre-coronavirus levels with more than 9 million Americans remaining jobless.