U.S. House Moving Forward with Passing $1.9 T Relief Bill

The United States House of Representatives is officially moving forward with steps to pass the American Rescue Plan, the $1.9 trillion Coronavirus relief package proposed by President Joe Biden.

The stimulus bill was passed through the House Budget Committee with a 19-16 vote.

It includes raising unemployment insurance supplement $400 per week and expanding jobless benefits until August 29.

In addition, it will entail $1,400 direct payments to people making $75,000 or less, and couples $150,000 or less, as well as a $3,600 support per child for each household for a year.

Unlike what was originally planned of almost doubling the federal minimum wage, it is now set to be gradually increased to $15 an hour by the year 2025.

Moreover, the stimulus package includes $20 billion in spending on the vaccination program, as well as higher support for education institutions and state and local governments.

The Republicans believe the rise in spending is too big, calling for fiscal responsibility.

On the other hand, the Democrats, who enjoy a majority in both chambers of Congress, will most likely use the reconciliation option that will allow them to pass the bill through the Senate with their simple majority, without the need for any support from the Republicans.

Treasury Secretary Janet Yellen said earlier on Monday that the success of the rescue plan will be evaluated based on how quickly it helps the economy return to unemployment levels as sees prior to the Coronavirus pandemic.

Once again, Yellen said that a rise in debt levels due to the increased stimulus spending does not pose a risk, as the historically low-interest rates could lead to the share of debt service of the gross domestic product (GDP) reaching their levels in 2007.

Yellen, called upon G7 countries to go big on stimulus spending to help economies recover from the impacts of the Coronavirus pandemic.

“The time to go big is now,” Yellen said, noting that this is the best way to achieve a robust and lasting recovery.

The Treasury Secretary also pointed to the need of the U.S. to lead the global efforts to combat climate change and support struggling economies during the pandemic.

Meanwhile, Biden has responded to critics by pointing to every part of the bill as being essential to cope with the Coronavirus crisis.

“We need recovery and rescue quickly. Everywhere you look alarm bells are ringing,” Senate Majority Leader Chuck Schumer recently said.

Democrats are now trying to pass the bill by next weekend.