$1.9tn Stimulus Bill Expected to Pass US House Vote Today
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- US House expected to pass President Biden’s economic proposal
- Treasury Secretary Janet Yellen makes a public appeal for the bill
The US House of Representatives is set to vote on President Joe Biden’s stimulus plan today. Once signed, the $1.9tn fiscal injection will be the most important economic milestone in President Biden’s first 100 days in office. The economic package passed a Senate vote on Saturday that approved the massive spending. Amongst others, it includes $1,400 stimulus checks for individuals, $300 per week as an extension of federal unemployment benefits, and $350bn in aid to state and local governments. The party-line vote passed the bill with some amendments that now need to be approved in the House of Representatives before it could be sent to President Biden.
The Senate, led by majority leader Chuck Schumer, is split 50-50 between Democrats and Republicans with Vice President Kamala Harris casting a tie-breaking vote. Before the vote, some Senators held concerns about the stimulus checks. They wanted the checks to be “more targeted” towards people with lower income. Additionally, there were also concerns about unemployment insurance and how long it was going to last. In a 25-hour voting session, Democratic lawmakers reached a compromise that the checks are going to be phased out at a slightly lower level and that the additional unemployment insurance would be applicable until the beginning of September.
Post-COVID Economy: Making It to the Other Side
The consensus regarding the stimulus package is that it will boost the economy and speed up the recovery. The Biden administration says that the American Rescue Plan could add up to 7 million jobs to the labor market. On the other end, the market remains fearful that the sheer scale of spending could lead to a rise in inflation. However, Federal Reserve Chairman and Treasury Secretary Janet Yellen have eased inflation concerns saying that the big-ticket spending would not impact prices immediately, rather a gradual rise throughout the year could be expected. Furthermore, Chairman Powell said that the Federal Reserve could tolerate an inflation rate up to the standard 2% and more, if necessary, at least until the pandemic-stricken economy picks up. Meanwhile, the central bank vowed to keep the ultra-loose monetary policy in place and its asset purchases ongoing.
Treasury Secretary Janet Yellen made a speech on Tuesday evening in which she once again cheered the progress on the stimulus and expressed her optimism that recovery is on the way. “If we do our job, I am confident that Americans will make it to the other side of this pandemic — and be met there by some measure of prosperity,” Ms. Yellen said.
The House of Representatives is expected to pass the bill later today without any issues. President Biden is scheduled to make an appearance on Thursday and give his remarks following the bill’s passage. According to White House press secretary Jen Psaki, Mr. Biden will also commemorate the first anniversary of the coronavirus lockdown and the role that “Americans will play in beating the virus”.
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