Democrats Reach Deal On Unemployment Benefits In COVID-19 Relief Bill

The agreement paves the way for President Joe Biden’s $1.9 trillion coronavirus relief bill to move forward in the Senate.

Democrats have conceded to Sen. Joe Manchin’s (D-W.V) demands on enhanced unemployment insurance, agreeing to smaller benefits for unemployed Americans after a nine-hour stalemate on the Senate floor.

Manchin, a key swing vote, abruptly halted the passage of the $1.9 trillion proposal Friday, throwing Democrats into chaos by threatening to vote for a Republican amendment on the bill that would have stripped Democrats’ provisions on unemployment insurance.

The final deal, which Manchin has signed off on, would give a $300 weekly federal unemployment benefit through Sept. 6 and forgive taxes on any unemployment income that jobless Americans receive as long as their household makes less than $150,000.

“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 about the deal. “We have reached a compromise that enables the economy to rebound quickly while also protecting those receiving unemployment benefits from being hit with an unexpected tax bill next year.”

The concession is a significant reduction in benefits. The bill passed by the House and supported by the president offered a $400 weekly benefit through the end of August. Currently, jobless Americans receive $300 in additional aid from the federal government every week, a program that begins to expire on March 14.

On Friday morning, Senate Democrats, led by Sen. Tom Carper (D-Del.), agreed with moderate Democrats to reduce the benefit in the proposal to the current $300 level but extended it for an additional month and tacked on tax forgiveness for Americans who may unexpectedly find themselves with a high tab for the federal government. They thought Manchin was in support of that original compromise and, after the White House signed off, began the process of voting on the bill.

Sen. Joe Manchin (D-W.Va.) said less relief was needed because the coronavirus pandemic should be waning by summer and the economy should begin to pick up.
Sen. Joe Manchin (D-W.Va.) said less relief was needed because the coronavirus pandemic should be waning by summer and the economy should begin to pick up.
Toni Sandys-Pool/Getty Images

But by 11:30 a.m., it became clear that Manchin was flirting with voting for a dueling Republican amendment, one put forward by Sen. Rob Portman (R-Ohio) that would have reduced the benefit to $300 a week and had the program expire by July 18. Portman’s proposal, had it passed, almost certainly would have been rejected by House Democrats, putting the entire bill in jeopardy.

What followed was nine hours of furious closed-door negotiations while top Democrats figured out how to appease Manchin’s demands while holding on to support from progressives in the House. Republicans, meanwhile, jeered from the sidelines, saying that Senate Majority Leader Chuck Schumer (D-N.Y.) had “lost control” of the chamber.

“This is certainly better than Republicans’ plans to gut aid for jobless workers, and it includes important provisions, like tax relief, that weren’t included before,” Elizabeth Pancotti, the policy director at Employ America said. “But cutting off aid to workers on Labor Day seems like a cruel compromise, and the additional weeks should not have been stripped by Senator Manchin’s stunt.”

Democrats are pushing to pass the COVID-19 relief bill on strictly party lines. With only 50 seats in the Senate, and Vice President Kamala Harris as the tie-breaking vote, any one Democrat can derail the process. And it takes only one Democrat to side with Republicans to pass an amendment that could substantially delay the aid.

In the last week, Manchin has increasingly expressed an uneasiness with the relief bill’s financial benefits. He told reporters earlier this week that he wanted to see the benefits cut off by mid-summer and has echoed concerns made largely by Republicans that the emergency bill would spend too much money to address the current economic crisis and that it would disincentivize workers from returning to their jobs.

“I’m thinking by end of June, first of July, we’re going to have most people inoculated, OK? So by that time, there should be doors opening up, ready to go .... If I have my store, I want my employees coming back,” Manchin said earlier this week.

Even with Friday’s agreement on jobless benefits, Democrats aren’t in the clear yet. They must now remain united on a marathon of other amendments offered by the GOP that are designed to split them apart.

The bill still has to go back to the House, where Speaker Nancy Pelosi (D-Calif.) has only a five-vote margin to pass this bill. Progressive House lawmakers have already expressed frustration with the Senate’s bill, particularly the removal of an increase to the minimum wage. Now they will also have to swallow a smaller unemployment benefit as well.

Democrats must do all of this in order to pass the bill before March 14, their stated goal, when unemployment benefits are due to lapse for millions of Americans.

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