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Democrats Narrow Stimulus Payments as Biden Works to Keep Aid Plan on Track

President Biden blessed the plan to lower the income cap for Americans receiving checks of up to $1,400, a crucial concession to moderates whose backing is needed to pass the bill.

With the bill likely to become law without any Republican votes, Senator Ron Johnson of Wisconsin said he planned to force a full reading of the legislation on the Senate floor.
Credit…Anna Moneymaker for The New York Times

  • March 3, 2021

WASHINGTON — President Biden agreed on Wednesday to place stricter income limits on the next round of stimulus payments, making the latest in a series of crucial concessions to moderates as Democrats worked to hold their fragile coalition together to push his $1.9 trillion pandemic aid package through a divided Senate.

The decision to scale back the direct checks — a popular centerpiece of Mr. Biden’s economic relief initiative — was the second time in a week that Democrats had moved to curtail the sweeping stimulus plan by limiting or removing progressive priorities. The moves have underscored the narrow path Mr. Biden must navigate as he seeks to steer his first major legislative initiative through the 50-50 Senate, where he cannot afford to lose a single Democrat in the face of what is likely to be united Republican opposition.

White House officials said the president, who served in the Senate for more than three decades, was well aware of the dynamic and “comfortable” with where the negotiations had landed.

“He is certainly familiar with the journey that it takes from a proposal to a bill being signed,” said Jen Psaki, the White House press secretary.

The legislation, which Democrats hope to push through the Senate by the weekend, remains among the largest federal relief packages in modern American history. It would deliver hundreds of billions of dollars for vaccine distribution, hospitals, state and local governments and families struggling to recover from the economic toll of the coronavirus pandemic.

“We cannot go through the situation we did back in 2009, where the stimulus wasn’t strong enough and we stayed in recession for years,” Senator Chuck Schumer of New York, the majority leader, said on Wednesday. The legislation, he added, “will be the single largest anti-poverty bill in recent history.”

But in recent days, it has narrowed to accommodate the moderates’ concerns as well as the arcane rules of the Senate.

Under the new proposal blessed by Mr. Biden, individuals earning more than $80,000 and households with incomes exceeding $160,000 would be disqualified from receiving stimulus checks. The caps are $20,000 lower than they were in the last round, wiping out payments for millions of Americans.

The plan would send $1,400 checks to individuals earning up to $75,000, single parents with children earning $112,500 and couples making $150,000, with the amount gradually falling for people with larger incomes. The payment would disappear altogether for those over the cap of $80,000 for individuals, $120,000 for single parents and $160,000 for couples. Mr. Biden’s original proposal, which passed the House over the weekend, would have set the cap at $100,000 for individuals, $150,000 for single parents and $200,000 for couples.

The reduction was another blow to liberal Democrats, who are already angry over a decision last week to remove a minimum-wage increase from the stimulus plan. A top Senate official ruled that measure out of bounds under the rules governing the legislation, but it also lacked support from crucial moderates whose votes would have been needed to pass it.

Even with the changes, Republicans who have opposed Mr. Biden’s pandemic aid plan from the start were plotting to make the debate on the legislation as prolonged and painful as possible for Democrats, complaining that the costly, far-reaching measure was crafted without their input. Polls indicate that the stimulus bill has attracted broad bipartisan support outside Washington, but Senator Mitch McConnell of Kentucky, the minority leader, is pushing for Republicans to remain united against it.

Many of them have balked at the fast-track process Democrats are using, known as budget reconciliation, to protect the bill from a filibuster and move it through the Senate with a simple majority vote. Republicans employed the tactic many times when their party held the majority.

Democratic leaders had hoped to begin debate on the legislation as early as Wednesday, but their timeline was slipping, and Republicans promised to further slow the process.

If adopted, the change in income limits would mean that about 12 million adults and five million children who received stimulus payments under the last round of aid signed in December by President Donald J. Trump would not receive them under Mr. Biden’s bill, according to an analysis by the liberal Institute on Taxation and Economic Policy. The researchers estimated that would bring the number of Americans benefiting to 280 million, down from 297 million.

Kyle Pomerleau, a tax modeling specialist at the American Enterprise Institute in Washington, estimated that it would shave $15 billion to $20 billion off the cost of the bill.

“We cannot go through the situation we did back in 2009 where the stimulus wasn’t strong enough and we stayed in recession for years,” Senator Chuck Schumer, the majority leader, said on Wednesday.
Credit…Anna Moneymaker for The New York Times

Ms. Psaki said Mr. Biden, who had made clear he was willing to negotiate on the income cap, had prioritized preserving the full $1,400 payment for as many people as possible.

“He has also been open from the beginning for that being more targeted and for there to be a steeper cliff, which that ramp-down ends,” she said.

Mr. Biden has sought to rally Democratic senators around the package, joining their weekly lunchtime meeting on Tuesday and urging them to stick together to reject attempts by Republicans to inject changes that could kill its chances of passage.

Centrists, who spoke privately with the president this week, have been pushing to narrow other elements of the stimulus plan and are mulling over the possibility of additional amendments to the measure.

For now, Democrats have resisted another of the moderates’ proposals: to keep a federal unemployment payment at $300 per week rather than the $400 payment included in the House bill.

“If you had to pick out or single out one item that more than anything else in the CARES Act saved the American economy, it was the unemployment insurance,” said Representative Richard E. Neal of Massachusetts, the chairman of the Ways and Means Committee, referring to the $2.2 trillion stimulus law that established the benefit. “So the fact that they have not touched the unemployment insurance with a supplement, I think is a good thing.”

With the current round of jobless aid slated to begin lapsing on March 14, Senate Democrats are using the reconciliation process to circumvent the 60-vote threshold typically needed to advance a bill and speed the measure to passage. But it is subject to strict rules aimed at ensuring that it is used only for measures that affect federal spending and revenue, which prompted the removal of the minimum wage provision.

With Republicans opposed, they were planning to drag out the debate. Senator Ron Johnson of Wisconsin said he planned to force a full reading of the legislation on the Senate floor — an hourslong process undertaken by journal clerks, not senators — and offer a slew of amendments to prolong what was already expected to be a marathon voting session, known as a vote-a-rama, of rapid-fire attempts to modify the bill.

“We need to keep this process going so we can highlight the abuse — obviously not Covid relief, obviously a boondoggle for Democrats,” Mr. Johnson told a radio station in Wisconsin.

The procedural threat from Mr. Johnson, who has repeatedly downplayed the assault on the Capitol by a pro-Trump mob on Jan. 6, came as Capitol Police officials warned that they were preparing for another possible attack on the building on Thursday, prompting House leaders to abruptly change their schedule and leave town.

Credit…Alex Brandon/Associated Press

With the latest changes, Democrats appeared to be coalescing around the measure, despite some lingering reservations among moderates and liberals.

“I just think that the bill has really enough good stuff — really does have enough good stuff — that we should be able to make this work,” said Senator Joe Manchin III, Democrat of West Virginia. “I’m very pleased with the discussions and dialogues and some changes that have been agreed upon.”

Progressive Democrats remain frustrated that the minimum-wage increase would not be included, but it was unclear whether they would drop their support for the overall plan.

“We’re looking to see what the whole package looks like,” said Representative Pramila Jayapal, Democrat of Washington.

Lawmakers were also weighing additional amendments, including changes to the jobless aid, providing more money for rural health care providers and setting aside funds for broadband access.

Democrats were still waiting on a final estimate of how much the legislation would cost, but they vowed to press ahead even as they haggled over additional changes.

The Senate version of the bill would also provide funding for people to keep the health insurance they had from work if they lost their jobs. Normally, workers are entitled under a program known as Cobra to temporarily stay on their workplace coverage if they pay the full premium themselves.

The stimulus bill would pass that on to the federal government, effectively making Cobra coverage free for such workers. The House version of the bill covered only 85 percent of the cost of such insurance premiums.

Jim Tankersley, Margot Sanger-Katz and Luke Broadwater contributed reporting.