Senate Democrats to Change Eligibility for Direct Payments in Covid-19 Aid Bill

Under the plan approved in the House last week, those $1,400 payments would begin to shrink at those income cutoffs before going to zero for individuals making $100,000 and married couples making $200,000. Lawmakers in the Senate are expected to bring the payments to zero for individuals making $80,000 and married couples making $160,000, according to the people.

Earlier:

WASHINGTON—The Senate could begin its first procedural votes on the sprawling coronavirus relief package Wednesday, if Democrats can resolve their last set of internal disputes over key aid programs included in the bill.

Senate Majority Leader Chuck Schumer (D., N.Y.) has taken steps to kick off debate as soon as Wednesday on the $1.9 trillion package passed by the House last week, but lawmakers were still haggling late Tuesday over changes sought by a handful of more centrist Democrats. The last-minute push threatened to slow down passage of the aid package, which President Biden had urged lawmakers to speed through Congress in order to avoid any lapse in unemployment benefits in mid-March.

“It’s a very complicated bill and there are a whole lot of people working on this,” Senate Budget Committee Chairman Bernie Sanders (I., Vt.) said Tuesday afternoon.

If Democrats iron out their differences, the Senate could vote to proceed to the bill Wednesday, setting up hours of debate and a blitz of amendment votes known as “vote-a-rama,” before voting on its final passage later this week or weekend. But protracted internal debate could drag out the process longer, pushing every step later.

The bill passed by the House early Saturday morning would provide $400 a week in federal unemployment benefits, send $1,400 direct payments to many Americans, $350 billion to state and local governments, expand a child tax credit and beef up funding for vaccine distribution and schools, among other measures.

Moderate Democrats have been pushing for alterations that they said would make sure the federal funds are directed to those most in need of them. Sen. Joe Manchin (D., W.Va.) sought to lower the federal jobless benefits to $300 a week, running into resistance from liberals who had initially pushed for $600 a week. The payments are in addition to state unemployment benefits.

Meanwhile, Senate Finance Committee Chairman Ron Wyden (D., Ore.) has been trying to extend the federal benefits through September, one month beyond their expiration date at the end of August in the current legislation.

Some Democrats worked this week to try to adjust the income levels at which the $1,400 payments would shrink to zero for more affluent families, which they have said would make the money better targeted to those in need.

The House version of the legislation offered $1,400 checks to individuals making less than $75,000 and married couples making less than $150,000 before phasing down the payments. Those payments go to zero once an individual’s income reaches $100,000 and married couples’ income hits $200,000.

“I think we could look at how we cap the pandemic checks to families so that they’re going to those people that most need the help,” said Sen. Jeanne Shaheen (D., N.H.).

That sentiment hasn’t been popular among many Democrats in the House, which will have to approve the bill after the Senate passes its version later this week.

“I never call it targeting. I call it restricting,” said Rep. Pramila Jayapal (D., Wash.), chairwoman of the Congressional Progressive Caucus. “As the pandemic has gotten worse and worse, people have less and less that they can draw on.”

Some moderate members of the Democratic caucus have also discussed shifting some of the $350 billion in state and local funding to other areas, including broadband access.

“Broadband is an integral part of the Covid response,” Sen. Angus King (I., Maine) said this week, noting the challenges to remote learning or telehealth for those without a functioning connection to the internet. “We have a real problem in this country. We have a very large number of our citizens, particularly in rural states, who don’t have a decent connection.”

Democrats are expected to approve the legislation in the Senate without Republican support. GOP lawmakers have attacked the size of the proposal, arguing that it is wasteful and unnecessary after the last relief package. The U.S. Chamber of Commerce said Tuesday it opposed the bill, saying it wasn’t sufficiently targeted, pointing to the higher savings rate for U.S. households and better-than-expected tax collections in some states.

“This isn’t a recipe to safely reopen America. To the degree it even addresses the pandemic, it’s more like a plan to keep us shut down,” Senate Minority Leader Mitch McConnell (R., Ky.) said. He said Democrats were “taking advantage of the crisis to check off unrelated liberal policies.”

Democrats have cast their bill as a necessary measure to buoy the economy and return life to normal.

“The economy is not strong enough to sustain things on its own. We need strong relief to get the economy going so it can continue on an upward path on its own,” Mr. Schumer said on the Senate floor Tuesday. In remarks Tuesday announcing that the U.S. would have enough Covid-19 vaccines for all American adults by the end of May, Mr. Biden again urged the Senate to pass the relief plan quickly.

“Despite the optimism, without new resources, our entire effort will be set back,” he said. “The bottom line is we need the American Rescue Plan now, now.”

In a recent Wall Street Journal survey, economists on average expected gross domestic product to expand nearly 4.9% this year, after falling 3.5% last year. While the pace of U.S. residents receiving the coronavirus vaccine has risen, it is likely to take months for the country to reach herd immunity, medical experts say. Another resurgence in the virus could cause more businesses to close or again scale back operations.

Write to Andrew Duehren at [email protected]