WASHINGTON — Senate Democrats on Friday scaled back the $400-a-week unemployment payments in President Biden’s $1.9 trillion stimulus plan, making a key concession to placate a crucial moderate in their own party who had threatened to defect and derail the new administration’s first major legislative initiative.
With the package stalled in the evenly divided Senate, leading Democrats agreed to drop their bid to raise the existing $300-a-week benefit, bowing to the demands of Senator Joe Manchin III of West Virginia and other moderates who had voiced concern that an overly generous benefit could keep people from returning to work and hamper a nascent recovery. As part of the agreement, they proposed to make a large portion of last year’s unemployment benefits tax-free.
The deal emerged after Mr. Manchin’s objections had halted the stimulus measure in its tracks just as the chamber had begun a marathon series of votes on an array of proposals to change the bill. Democrats’ decision to modify the measure to accommodate his objections was the latest reflection of the strength of a small group of moderates who are crucial swing votes, and the difficulty of governing in a 50-to-50 Senate, where Democrats cannot afford to lose a single vote.
“The president supports the compromise agreement, and is grateful to all the senators who worked so hard to reach this outcome,” Jen Psaki, the White House press secretary, said in a statement.
While the outcome cleared the way for the votes to resume on the stimulus package, which was on track to pass as early as Saturday, it was an awkward episode for Democratic leaders, who had been confidently predicting that a more generous jobless aid deal they had worked out — with Mr. Biden’s blessing — would keep them unified and allow them to march forward, beating back Republican efforts to throw the bill off-track.
“The Senate is going to take a lot of votes, but we are going to power through and finish this bill, however long it takes,” Senator Chuck Schumer, Democrat of New York and the majority leader, vowed before the trouble began.
But Mr. Manchin refused for hours to sign off, and Democrats were ultimately forced to shorten the duration of the benefits, which they had sought to extend until early October, setting an end date of Sept. 6. The amendment ultimately passed, 50 to 49, just before 1:30 a.m. Saturday.
“We have reached a compromise that enables the economy to rebound quickly while also protecting those receiving unemployment benefits from being hit with an unexpected tax bill next year,” Mr. Manchin said in a statement after the agreement had been reached.
It was the second time in a week that leading Democrats, with the backing of the White House, had bowed to the wishes of moderates in their party in an effort to keep the sweeping stimulus measure on track. On Wednesday, they agreed to trim eligibility for another round of stimulus checks.
Still, the Senate fell into a period of paralysis on Friday, with a vote on an unrelated proposal to advance a minimum-wage increase to the stimulus measure languishing for nearly 12 hours as Democrats stalled for time to iron out the agreement on the unemployment payments. At 9:12 p.m., it appeared to become the longest open vote in modern Senate history and closed at 10:53 p.m.
The lull outlasted the 10 hours and 44 minutes it took Senate clerks to read the entire 628-page bill aloud on Thursday and into the wee hours of Friday morning, the result of a delaying tactic by Senator Ron Johnson, Republican of Wisconsin, which Democrats had denounced as an unconscionable waste of time holding up an urgently needed relief plan.
Hanging in the balance was Mr. Biden’s pandemic aid measure, one of the largest federal rescue bills of its kind, which would provide funding for vaccine distribution and schools, relief for small businesses and help for struggling Americans, including direct payments and the jobless aid.
Racing to have the bill signed into law before unemployment benefits begin to lapse on March 14, Democrats are using a fast-track budget process, known as reconciliation, to protect it from filibusters and push it through on a simple majority vote. With each party controlling 50 seats in the Senate, Democrats have only a one-vote margin thanks to Vice President Kamala Harris’s power to break ties.
Democrats have already modified their proposal substantially to win over the centrists in their ranks. On Wednesday, they agreed to lower the income cap that determines who can receive a stimulus payment to $80,000 for individuals, $120,000 for single parents and $160,000 for households. Mr. Biden had proposed caps $20,000 higher.
The measure would send $1,400 checks to Americans earning $75,000 or less — or $112,500 for single parents and $150,000 for couples — with the stimulus payments falling gradually for those with incomes above those thresholds and disappearing altogether for those earning more than the income cap.
The proposed changes to the stimulus payments and jobless aid were two more blows to the hopes of progressive Democrats who had already been angry at the decision to omit a minimum-wage increase from the bill, after a top Senate official ruled it out of bounds based on the rules that govern reconciliation bills.
Liberal lawmakers and activists had argued that Democrats should overrule the official who issued the decision, the Senate parliamentarian, and push through the proposal anyway over Republican opposition. But Mr. Biden made clear he would not support that move, and on Friday, when Senator Bernie Sanders, independent of Vermont, tried to add it to the legislation, the wage increase did not appear to come close to mustering a majority, and it fell far short of the 60 votes that it would have needed to be adopted.
The measure to increase the minimum wage to $15 by 2025 attracted only 42 supporters — and 58 opponents, including seven Democrats and one independent who votes with them. The vote-a-rama resumed close to 12 hours after it began, as Democrats scrambled to ready text for the new plan.
“If anybody thinks that we’re giving up on this issue, they are sorely mistaken,” Mr. Sanders told reporters. “If we have to vote on it time and time again, we will — and we’re going to succeed.”
While Republicans had made it clear they were ready to draw out debate on the stimulus package with all manner of amendments that were doomed to fail, it was also clear on Friday that there were issues far more significant than a minority united in opposition. Lawmakers in both parties quickly focused on Mr. Manchin, who has repeatedly called for the overall bill to be more targeted and who singled out the unemployment provision as an example.
With the existing $300-a-week payments set to lapse next weekend, Mr. Biden’s stimulus plan and the House bill that passed last weekend to implement it proposed to increase the aid to $400 a week and extend it through the end of August.
But Mr. Manchin and other moderates worried that was too high, and leading Democrats had devised an alternative that would keep the weekly benefit at $300 but extend it until early October. They also added a sweetener: a new provision that would forgive up to $10,200 in taxes on unemployment benefits received through in 2020.
Believing they had a deal, the Democrats prepared for a vote on the proposal, but Mr. Manchin balked. And after hours of negotiating, they announced a new plan. The weekly benefit would remain at $300, but the new end date would be Sept. 6, lasting only a week longer than Mr. Biden had proposed. The tax sweetener would be available only to those earning less than $150,000.
The entire exercise was aimed at persuading Mr. Manchin not to endorse an alternative amendment by Senator Rob Portman, Republican of Ohio, that would keep the jobless payments at $300 and cut back the duration of the program, setting an end date through July 18. If adopted, the proposal would likely sap Democratic support for the stimulus plan. Mr. Portman and Mr. Manchin had repeatedly discussed the proposal, with Mr. Portman initially considering ending the unemployment benefit in June.
Mr. Manchin promised Mr. Portman he would support the amendment and ultimately vote for it, according to two people familiar with the discussion, who requested anonymity to disclose details of a private conversation. A Democratic aide said the Portman amendment, which passed with Mr. Manchin’s support, would be superseded when the agreement struck Friday evening was approved.
“This has not been my first choice,” Senator Ron Wyden of Oregon, the chairman of the Senate Finance Committee and one of the key authors of the original weekly benefit, said on Friday. But, he added, “it’s going to provide meaningful relief to workers.”
Senate Republicans, having readied an arsenal of politically difficult amendments to prolong consideration of a bill they were powerless to stop, were gleeful over a delay they had not personally instigated.
“Chuck Schumer has officially lost control,” Senator Marsha Blackburn, Republican of Tennessee declared in a one-line statement from her office as action stalled on the floor.
They poked fun at Democrats’ feverish efforts to corral their moderates to support the bill, with Senator Mitch McConnell of Kentucky, the Republican leader, needling Senator Richard J. Durbin of Illinois, the No. 2 Democrat, who was presiding over the chamber, into confirming the duration of the procedural vote left open to sustain the negotiations.
“Well, my goodness,” Mr. McConnell observed. “This is quite a start to their fast-track process.”
He promptly moved to adjourn the chamber, a request that failed on party lines.
The internal haggling among Democrats obscured a partisan brawl over the legislation, which Republicans have denounced as wasteful and derided as the product of bare-knuckled tactics by Democrats who refused to allow them any input.
But Democrats maintained that the legislation would inject a critical boost into the economy.
Senator Patty Murray of Washington, the No. 3 Senate Democrat, argued that Republicans opposing the plan did not understand the gravity of the pain being felt across the country. She cited high unemployment numbers and the toll on the mental health of children who cannot return to school.
“This country is on fire; the Republicans’ biggest concern is that we might use too much water,” said Ms. Murray, the chairwoman of the health committee. “Anyone who says this bill is too expensive needs to understand how much this pandemic has already cost our communities.”
Luke Broadwater and Nicholas Fandos contributed reporting.