WASHINGTON -- The House early today passed President Joe Biden's $1.9 trillion stimulus plan, with Democrats pushing forward despite unified GOP opposition to the relief package aimed at stabilizing the economy and boosting coronavirus vaccinations and testing.
Biden's first major legislative package had the overwhelming support of House Democrats, who narrowly control the chamber. Republicans opposed the legislation en masse, in a sharply partisan outcome just a month after Biden was inaugurated with calls for bipartisanship and unity.
The vote was 219-212. House passage sends the legislation to the Senate, where bigger fights await.
The action in the House comes a day after the Senate parliamentarian ruled that the $15 minimum wage in the legislation is not permitted under Senate rules. Nonetheless, House Democrats passed the legislation with the wage increase included.
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It is unclear how the wage issue will ultimately get resolved, but House Speaker Nancy Pelosi, D-Calif., had pledged Friday that even if the Senate takes out the minimum wage increase -- the No. 1 priority for many liberals -- the House will "absolutely" pass the legislation and send it to Biden to sign.
"The sooner we pass the bill and it is signed, the sooner we can make the progress that this legislation is all about -- saving the lives and the livelihood of the American people," Pelosi said at a news conference.
Beyond the minimum-wage increase, the relief bill would provide $1,400 stimulus payments to tens of millions of American households; extend enhanced federal unemployment benefits through August; provide $350 billion in aid to states, cities, U.S. territories and tribal governments; and boost funding for vaccine distribution and coronavirus testing -- among myriad other measures, such as nutritional assistance, housing aid and money for schools.
Democrats said the still-faltering economy and the half-million American lives lost demanded quick, decisive action and that GOP lawmakers were out of step with a public that polling shows largely views the bill favorably.
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"I am a happy camper tonight," said Rep. Maxine Waters, D-Calif. "This is what America needs. Republicans, you ought to be a part of this. But if you're not, we're going without you."
Republicans said the bill was too expensive, spent money too slowly to quickly reopen schools, was laden with gifts to Democratic constituencies like labor unions, and funneled funds to struggling pension systems and other projects irrelevant to battling the pandemic.
"Before we ask future generations to float us another $2 trillion to pay off these liberal promises, let's at least have the integrity to admit that this really isn't about covid," said Rep. Steve Womack, R-Ark.
Democrats hope to push the legislation through both chambers and get it signed into law by March 14, when enhanced unemployment benefits are set to expire. It is uncertain whether disputes over the minimum wage or other issues could complicate that timeline, although Pelosi insisted Friday that the March 14 deadline would be met, adding: "I would like it well before that."
On Thursday night, the Senate's parliamentarian ruled that the wage increase as written could not proceed under "reconciliation," the budgetary maneuver Democrats are using to pass the stimulus bill through the Senate without GOP votes.
Some liberals even suggested that the nonpartisan parliamentarian should be fired, but Pelosi and other House leaders indicated Friday that they're ready to move beyond the dispute and save the minimum wage fight for another day, while insisting they'd get it done one way or another.
ALTERNATIVE IDEA
As an alternative to the minimum-wage increase, Senate Democrats are exploring a tax increase on large corporations that do not pay a $15-an-hour minimum wage. Senate Majority Leader Charles Schumer, D-N.Y., is considering a move to include the provision in the relief bill in the Senate, according to two Democratic aides who spoke on the condition of anonymity to discuss internal thinking. It was uncertain whether the proposal would prove viable or command enough support to advance.
Sen. Ron Wyden of Oregon, chairman of the Finance Committee, said the still-evolving proposal would impose an escalating tax on the payrolls of large corporations, starting at 5%, if any of the company's workers earned less than a certain hourly wage. It would include what Wyden called "safeguards" to prevent companies from laying off workers and replacing them with contract employees to avoid the tax.
"While conversations are continuing, I believe this 'plan B' provides us a path to move forward and get this done through the reconciliation process," Wyden said in a statement.
It was not clear Friday whether the tax penalty plan meets the requirements of the reconciliation bill, because if it achieved its objective of ensuring that all large companies pay their workers at least $15 per hour, none of the companies would pay the tax, and federal revenue would not change.
Wyden said as part of the plan, very small businesses "with middle-class owners" would receive an income tax credit to cover 25% of their employees' wages, up to $10,000 per year per employer, in an effort to incentivize higher pay at those businesses.
As its details were being ironed out Friday, the tax penalty proposal was drawing broad criticism, raising questions about whether it could garner enough support to pass even if it met with Senate rules. Some progressive groups raised concerns that the plan would be difficult to enforce, relying on federal officials to collect vast swaths of new data on employee pay and hours at large companies.
And liberal lawmakers said Democrats risked losing a crucial opportunity by not insisting on a large wage increase now, at the start of Biden's term.
"While I don't want to ignore the tax being a factor, I also know that a tax break is just not a replacement for a $15 minimum wage," Rep. Alexandria Ocasio-Cortez, D-N.Y., told reporters Friday. "It sets the stage for how effective we'll be for the rest of the term, so the earlier we can make these fixes, the more we can change people's lives."
Business groups dismissed the tax penalty idea and called on Democrats to instead work with Republicans and industry groups to craft a compromise bill to raise the minimum wage to a lower amount than $15 an hour.
ECONOMIC PICTURE
The vote on the legislation comes as the economy has been showing some signs of progress. Personal income rose 10% in January, the Commerce Department reported Friday, thanks largely to the December stimulus package Congress passed. New claims for unemployment insurance fell sharply last week as coronavirus cases continue to decrease and vaccine distribution becomes more widespread.
Still, only slightly more than half of the 20 million jobs lost during the pandemic have returned, and Federal Reserve Chairman Jerome Powell has said the real unemployment rate is closer to 10%, meaning the economy has a long way to go to recover to its pre-pandemic levels.
Congressional Republicans have argued that Biden's stimulus is poorly targeted and too expensive, and that it includes measures unrelated to the pandemic. Congress approved some $4 trillion to fight the pandemic last year, including $900 billion in December, and Republicans said that is more than enough, especially in light of signs the economy is improving.
"This isn't a relief bill. It takes care of Democrats' political allies while it fails to deliver for American families," House Minority Leader Kevin McCarthy, R-Calif., said Friday. "We already know what is the best stimulus plan out there: It is to fully reopen our economy. To do that, we need our economy to go back to work, back to school and back to health."
Democrats, however, argued that more assistance is sorely needed.
"Millions are going hungry, and even more don't know how they'll pay next month's rent," Rep. Suzan DelBene, D-Wash., testified Friday before the House Rules Committee. "Their pain is our pain, and we can't expect them to ride this out without our help. This landmark and lifesaving legislation is not a partisan wish list -- it's an American wish list."
Ahead of the floor vote, Democrats and Republicans on the Rules Committee sparred over the legislation, with Republicans complaining that they had been shut out of negotiations. Democrats argued that even if the legislation did not command support among Republicans in Congress, it was broadly supported by the public -- and by many GOP mayors and some governors.
Biden made some efforts at bipartisan outreach after unveiling his proposal, including meeting with a group of 10 Senate Republicans who made a $618 billion counteroffer. He ultimately dismissed their ideas as too meager and made the decision to move forward without GOP support, repeatedly defending his proposal in recent days and challenging critics to tell him: "What would they have me cut?"
In the Senate, moderate Democrats have raised questions about a number of provisions, including the structure of the state and local aid. The Senate is split 50-50 between Democrats and Republicans, so if Republicans remain opposed, Democrats can pass the legislation only if they stay united and Vice President Kamala Harris breaks the tie.
The budget reconciliation process allows legislation to pass in the Senate with a simple majority vote instead of the 60 votes usually required. But it also contains limitations, prohibiting certain measures that do not affect the federal budget in particular ways. The parliamentarian determined that the minimum wage did not pass that test.
Information for this article was contributed by Erica Werner, Jeff Stein, Paul Kane and Felicia Sonmez of The Washington Post; by Emily Cochrane and Jim Tankersley of The New York Times; and by Alan Fram, Mary Clare Jalonick and Kevin Freking of The Associated Press.
