House Passes $1.9 Trillion Covid-19 Stimulus Package; Biden to Sign Friday

Unlike previous rounds of aid, the vote was largely along party lines. The vote was 220 to 211, with all GOP lawmakers and one Democrat, Rep. Jared Golden of Maine, voting against the bill.

The raft of new payments, coming as vaccines have rolled out nationwide and new cases have slowed, has buoyed expectations about the speed of the economy’s recovery after a year marked by closed schools, closed businesses and more than 500,000 deaths in the U.S.

Major expansions to several aid programs for low-income Americans will be temporary under the bill, though Democrats hope to make them permanent later in a broader effort to expand the federal safety net. Taking advantage of Democrats’ narrow majorities in Congress, Mr. Biden is weighing a second major spending package in coming months that his advisers expect will focus on climate and infrastructure.

“This legislation is about giving the backbone of this nation—the essential workers, the working people who built this country, the people who keep this country going—a fighting chance,” Mr. Biden said after Wednesday’s vote. House Speaker Nancy Pelosi (D., Calif.) called the bill a “force for fairness and justice in America” and compared it to the ACA in its significance.

At the same time, the new payments, financed with deficit spending, have also raised some fresh worries about inflation and potentially overheating the economy. Republicans opposed the bill, attacking its price tag and calling many of its measures bloated or unnecessary and unrelated to the crisis.

“So let’s be clear. This isn’t a rescue bill, it isn’t a relief bill, it’s a laundry list of left-wing priorities that predate the pandemic and do not meet the needs of American families,” said House Minority Leader Kevin McCarthy (R., Calif.).

The vote marks the first marquee win on Capitol Hill for Mr. Biden. He plans to give a prime-time speech on Thursday about the pandemic response and sign the bill on Friday afternoon.

Mr. Biden, Vice President Kamala Harris and key cabinet secretaries plan to spend the coming weeks traveling around the country touting the package and explaining how the public can take advantage of its benefits, White House officials said. Press secretary Jen Psaki said the White House is planning interviews with local media outlets as well as a digital strategy related to the bill. The president will also appoint an official to oversee the implementation of the package, Ms. Psaki said.

In their first major legislative effort since they took control of the White House and both chambers of Congress, Democrats largely stuck together on the broad package, reconciling demands between the party’s progressive and centrist members. The package received no Republican support in Congress, though Democrats and the Biden administration repeatedly touted public opinion polling showing its broad support: A recent Pew Research Center survey showed 70% of Americans favor the legislation.

Many of the planks of the bill continue or build on aid measures Congress approved in a series of bipartisan bills totaling roughly $4 trillion last year. Like in previous packages, the full direct payments will go to individuals making as much as $75,000 and married couples making as much as $150,000, and the $300 weekly jobless-aid supplement lawmakers approved in December will continue through Sept. 6. Federal unemployment benefits had been set to begin expiring on March 14, spurring lawmakers to quickly approve the package.

The legislation also provides $7.5 billion for vaccine distribution, $48 billion for testing and contact-tracing efforts, $22 billion for rental assistance, $39 billion for child care, $29 billion for the restaurant industry and more than $160 billion for schools and universities.

After a push from centrist Democrats in the Senate, lawmakers did downsize some elements of the bill. The direct payments will go to zero for individuals with incomes of $80,000 and married couples with incomes of $160,000, a faster phase-down than in previous aid packages.

Democrats in the House had initially sought to set the unemployment payments at $400 a week before the Senate amended the bill. Senate centrists pushed to reduce the size of the unemployment aid. A last-minute bid from Sen. Joe Manchin (D., W.Va.) to shorten its duration brought the Senate to a standstill for nearly 12 hours last week, as Democrats moved the legislation through the 50-50 chamber.

Democrats used a process called reconciliation to pass the package through Congress, allowing them to avoid the 60-vote threshold necessary for advancing most legislation in the Senate and instead approve it along party lines. Using reconciliation limited the policy provisions Democrats could include in the bill, ultimately forcing the party to drop an effort to raise the minimum wage to $15 an hour as part of the bill.

But reconciliation also enabled Democrats to move forward with measures that Republicans oppose, including $350 billion in aid for state and local governments that Republicans have assailed as a political handout in excess of the budget hardships caused by the pandemic.

The bill will expand the child tax credit—increasing the benefit to $3,000 per child from $2,000, with a $600 bonus for children under age 6—make it refundable, and authorize periodic payments. Making the credit refundable will make it available to the millions of very low-income households that don’t currently receive the full credit because they don’t pay enough in taxes or earn enough income to take advantage of it. Lawmakers are expected to push to make the expansion, set to last through 2021, permanent.

Democrats will broaden eligibility for and increase the amount of subsidies for people who buy Affordable Care Act health plans. The additional subsidies could mean lower premium payments for almost 14 million people insured on the individual market.

Advocates say the measures—along with the direct payments, expansions of the earned-income tax credit and an extension of boosted food assistance—are projected to dramatically reduce poverty in the U.S., especially among children.

“We should expect if this bill becomes law and is well implemented, we’ll see the largest one-year reduction in child poverty not just in our nation’s history but possibly in any nation’s history,” said Indivar Dutta-Gupta, the co-executive director of the Georgetown Center on Poverty and Inequality.

The size of the package has renewed concerns among some lawmakers and experts about the growing debt burden and the risk of inflation. The series of relief bills Congress has passed since the pandemic started has increased publicly held federal debt by nearly $4.5 trillion over the past year. At $21.9 trillion as of March 1, the debt is roughly the size of the nation’s entire economic output, the highest since the aftermath of World War II.

“It’s good we passed a bill, you definitely don’t want unemployment payments to expire, but it definitely could and should have been more targeted,” said Maya MacGuineas, the president of the Committee for a Responsible Federal Budget. “The bill is larger than it had to be to fight the current economic situation.”

Economists surveyed by The Wall Street Journal expect the aid package to propel the U.S. economy to its fastest annual growth in nearly four decades, boosting employment and reducing poverty while also reviving inflation. The economists expect the economy to grow 5.95%, measured from the fourth quarter of last year to the same period this year.

The bill also puts roughly $86 billion into a new program to help multiemployer pension plans. The measure would allow the Pension Benefit Guaranty Corporation to provide cash assistance to troubled multiemployer pension plans and ensure they continue paying benefits to retirees.

—Andrew Restuccia contributed to this article.

Write to Andrew Duehren at [email protected]