House Democrats on Monday proposed an additional $1,400 in direct payments to individuals as Congress began piecing together a $1.9 trillion COVID-19 relief package that tracks President Joe Biden’s plan for battling the pandemic and reviving a still staggering economy.
Democrats on the Ways and Means Committee would expand tax credits for families with children, for lower-earning people and those buying health insurance on marketplaces created by the 2010 Affordable Care Act. The panel, which plans to approve the measure by week’s end, would also provide health care subsidies for some unemployed workers.
Less than three weeks into his presidency, Biden has declared that vanquishing the virus and resuscitating the economy are his top priorities. The coronavirus pandemic has killed over 460,000 Americans while the economy has lost 10 million jobs since the crisis began last year.
Monday’s Ways and Means unveiling of its piece of the package — at over $900 billion, nearly half of Biden’s entire plan — came with Congress’ Democratic leaders hoping to rush the legislation to the president for his signature by mid-March, when existing emergency unemployment benefits expire. Their schedule reflects a desire by Biden and congressional Democrats to show they can respond swiftly and decisively to the crisis, even if, as seems likely, they must muscle past solid Republican opposition.
“While it is still our hope that Republicans will join us in doing right by the American people, the urgency of the moment demands that we act without further delay,” said Ways and Means Chairman Richard Neal, D-Mass.
Texas Rep. Kevin Brady, top Republican on that committee, criticized Democrats for driving ahead on the massive measure “without bipartisan compromise.” He said the GOP wants to focus on vaccine distribution and more targeted relief for workers, families and small businesses — essentially previewing amendments Republicans are expected to propose during committee votes this week, some of which might win Democratic backing.
House Education and Labor Committee Democrats also previewed their plans Monday. Their $350 billion package includes $130 billion to help schools reopen safely, $40 billion for colleges battered by the pandemic and a plan to gradually raise the federal minimum wage to $15 an hour. The minimum wage increase faces an uphill climb, and even Biden has conceded it likely won’t survive.
The Financial Services Committee proposal includes $50 billion to help the Federal Emergency Management Agency handle pandemic costs, plus $25 billion for struggling rental property owners and people at risk of homelessness. Transportation and Infrastructure Committee spending would include grants of $30 billion for struggling public transit agencies with starkly reduced ridership.
Democrats have only narrow House and Senate majorities. Besides Republican opposition that could be unanimous, Democrats will have to balance party moderates who worry about a package going too far and progressives eager to push Biden as far leftward as they can.
In one potential battleground within the party, the Ways and Means Democrats proposed limiting the full $1,400 relief payments to individuals making $75,000 or less, and phasing them out until they end completely at $100,000. Couples who make up to $150,000 would be entitled to $2,800 relief payments, which would gradually diminish and fully disappear for those earning $200,000.
The income levels at which people qualify for the direct payments has caused rifts among Democrats, with moderates arguing that relief should be more narrowly targeted to people most in need. Biden has said he will not allow the per-person payments to fall below $1,400 but has indicated flexibility on the income thresholds.
“There is a discussion right now about what that threshold will look like. A conclusion has not been finalized,” said White House press secretary Jen Psaki.
Congress approved $600 per person direct payments in December. The additional $1,400 would bring the total to $2,000. Democrats have sought that amount for months, and it won support from then-President Donald Trump during his unsuccessful reelection campaign, even as it was opposed by many congressional Republicans.
The Ways and Means proposal would increase emergency jobless aid to $400 weekly from its current $300. Benefits would last until Aug. 29, instead of March 14 as now scheduled. The new amount is still below the original $600 extra weekly benefit that was enacted last March but expired July 31.
The plan would fight child poverty by increasing the child tax credit for families for one year. Now a maximum $2,000 annually, it would grow to up to $3,600 per child under 6 and as much as $3,000 for those up to age 17. Payments of the credit would be made monthly, even to families that owe no federal income taxes — a change from current policy.
The bill also provides several pathways for people to get and keep health insurance, including an early test of Biden’s pledge to build on Obama’s health care law.
One section would sweeten the subsidies provided under former President Barack Obama’s health law. The Biden administration has already announced a three-month special sign-up period for ACA coverage starting next Monday. The more generous financial assistance in the House bill would be available for this year and next.
The bill would also cover 85% of the cost of premiums for workers trying to preserve their job-based health insurance after getting laid off. A federal law known as COBRA already allows them to temporarily keep their old employer’s health plan, but they typically have to pay prohibitively high premiums. The assistance would be available through Sept. 30.
For workers without children, the plan proposes a significant expansion of the earned-income tax credit — a refundable credit currently claimed by taxpayers who earn an average $20,000 a year. The EITC is viewed by its proponents as a major anti-poverty tool for working people.
The legislation calls for the maximum credit for workers without children to be nearly tripled and for wider eligibility. It also contains tax breaks for some restaurants that have received pandemic aid.
The bills’ details were announced as a report by the nonpartisan Congressional Budget Office said boosting the minimum wage to $15 an hour would increase joblessness even as it boosts wages for millions of workers.
Progressives like Sen. Bernie Sanders, I-Vt., author of the minimum wage legislation, want Democrats to fight for it now. It faces opposition from the GOP and some Democratic moderates wary that it will hurt small businesses during the pandemic.