March 4, 2021

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Third stimulus check update: Biden open to negotiation

President Biden also said Friday that it’s unlikely his request for a $15 federal minimum wage will be passed as part of his COVID relief bill.

WASHINGTON — President Joe Biden laid out his case Friday for moving fast to pass $1.9 trillion in coronavirus relief, but even as he opened the door to proceeding without Republicans, he conceded that a key element of his plan — hiking the minimum wage to $15 per hour — was unlikely to become law. Biden also said he was “prepared to negotiate” who would get the full $1,400 direct payments he’s insisting on.

The stakes for the country and economy were amplified Friday morning by the release of the government’s jobs report for January, which showed that hiring had stalled to a pace that could hinder a return to full employment for several years. Some 406,000 people left the labor force last month as deaths from the pandemic have surged.

“A lot of folks are losing hope,” Biden said in a speech at the White House. “I believe the American people are looking right now to their government for help, to do our job, to not let them down. So I’m going to act. I’m going to act fast. I’d like to be doing it with the support of Republicans … they’re just not willing to go as far as I think we have to go.”

The jobs report landed shortly after Senate Democrats cast a decisive vote to muscle the COVID relief plan through the chamber without Republican support, a step toward final approval next month. Vice President Kamala Harris cast the tie-breaking vote in the Senate, her first.


Biden’s speech solidified a marked shift in tone and strategy for a president who entered the White House pledging bipartisanship and met on Monday with 10 Republican senators pushing a slimmed-down $618 billion alternative. Biden concluded in his Friday speech that aid at that level would only prolong the economic pain.

Still, the president acknowledged Friday that one of his most ambitious proposals, raising the minimum wage, would likely be left out of the final bill.

“I put it in, but I don’t think it’s going to survive,” Biden said in an interview with “CBS Evening News” anchor Norah O’Donnell, adding he would push to raise it in a standalone bill. “No one should work 40 hours a week and live below the poverty wage. And if you’re making less than $15 an hour, you’re living below the poverty wage.”

Senate Democrats applauded after Harris announced the chamber’s 51-50 vote on the budget measure at around 5:30 a.m. The action came after a grueling all-night session, where senators voted on amendments that could define the contours of the eventual COVID-19 aid bill.

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Following Senate approval, the House passed the measure 219-209 on Friday afternoon, also without a Republican vote. The coronavirus aid package can now work its way through congressional committees with the goal of finalizing additional relief by mid-March, when extra unemployment assistance and other pandemic aid expires. It’s an aggressive timeline that will test the ability of the new administration and Congress to deliver.

“We have been focused like a laser on getting this done,” House Speaker Nancy Pelosi said after leading Democrats in the House met with Biden on Friday. “We hope to be able to put vaccines in people’s arms, money in people’s pockets, children safely in schools and workers in their jobs. That’s what we are doing now.”

The push for stimulus comes amid new signs of a weakening U.S. economy. Employers added just 49,000 jobs in January, after cutting 227,000 jobs in December, the Labor Department said Friday. Restaurants, retailers, manufacturers and even the health care sector shed workers last month, meaning that private employers accounted for a meager gain of 6,000 jobs last month.

“At that rate, it’s going to take 10 years until we hit full employment,” Biden said during his Oval Office meeting with House Democrats. “That’s not hyperbole. That’s a fact.”

The unemployment rate fell to 6.3% from 6.7%, but there was a decline in the number of people who were either working or looking for a job in a sign that people are dropping out of the labor force. The U.S. economy is 9.9 million jobs shy of its pre-pandemic level.

Biden, who has been meeting with lawmakers in recent days to discuss the package, welcomed the leaders of House committees who will be assembling the bill under the budget process known as “reconciliation.” Money for vaccine distributions, direct payments to households, school reopenings and business aid are at stake.

The size of the package has been a concern for several Republican lawmakers and some economists. Larry Summers, a former treasury secretary during the Clinton administration, said in a column for The Washington Post that the $1.9 trillion package was three times larger than the projected economic shortfall. A separate analysis by the Penn Wharton Budget Model found the plan would do little to boost growth relative to its size.

The Senate also passed an amendment 99-1 that would prevent the $1,400 in direct checks in Biden’s proposal from going to “upper-income taxpayers.” But the measure, led by Sens. Susan Collins, R-Maine, and Joe Manchin, D-W.Va., is ultimately symbolic and nonbinding and does not specify at what level a person qualifies as upper income.

Recent reporting from The Washington Post and Politico indicates growing acceptance in the Senate of a giving individuals who make up to $50,000 and couples who make up to $100,000 the full $1,400 or $2,800, respectively. The amounts would be phased out to zero for people making more than $75,000 individually or $150,000 as a couple.

Biden told CBS he was “prepared to negotiate” on the upper boundary for where payments would phase out. “Middle-class folks need help,” he said. “But you don’t need to get any help to someone making 300,000 bucks or $250,000.”

And while Biden seemed willing to break with Republicans in his speech, White House press secretary Jen Psaki told reporters afterward that the budget process approved by the Senate still allows for bipartisanship.

“The process enables for time for negotiations through committee work,” Psaki said. “We certainly are hopeful that there will be opportunities for amendments from Republicans, amendments from others across the board to be a part of this process moving forward.”

Associated Press writers Zeke Miller and Lisa Mascaro contributed to this report.

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Gregory Daco, chief U.S. economist at Oxford Economics, forecasts that 6.6 million jobs could be regained by the end of this year, though that would still leave the U.S. economy several million short of its pre-pandemic level.

Last month, service industries that deal with customers in person again posted the sharpest job losses as millions of consumers continue to hunker down at home. Within the service sector, restaurants, bars and hotels slashed 61,000 jobs. Retailers cut nearly 38,000 jobs. Employment in transportation and warehousing fell by 28,000.

Those declines probably would have been even worse if not for a quirk in the government’s calculations. The government uses seasonal adjustments to try to filter out the impact of short-term changes that don’t reflect underlying economic trends. One such short-term change involves temporary retail employees who are hired for the holiday shopping season.

Retailers typically hire extra staff for the holiday season and then let them go in January. The government’s seasonal adjustments factor in this pattern to avoid showing a huge job gain before the holiday season and then a huge job loss afterward. This time, though, holiday hiring was weaker because of the pandemic, and so layoffs in January weren’t as large as they typically are. As a result, the seasonal adjustment process likely inflated last month’s hiring gain.

Women continue to be hurt disproportionately by the economic damage from the pandemic, which has led some of them to quit jobs to care for children or eliminated the jobs that many held in the hospitality industry. The proportion of women who either have a job or are looking for one declined in January, By contrast, the proportion for men remained flat.

The hardships that millions of Americans are suffering have fueled President Joe Biden’s push for a $1.9 trillion rescue aid package, which would provide $1,400 checks for most U.S. individuals and a $400 weekly unemployment payment on top of state benefits. The package would also extend two federal jobless aid programs, from mid-March through September.

The weak January jobs data could lend further political impetus to Biden’s package. Early Friday, the Senate approved a budget measure that would let Democrats muscle Biden’s $1.9 trillion plan through the chamber without Republican support. The measure now returns to the House, where it will have to be approved before work on the aid package will begin in several congressional committees.

Amy Cooper of Burlington, North Carolina, is among those struggling to find a job amid the pandemic, which has made her nervous about working in restaurants, where she’d worked before. Last spring, she quit a job at a deli because of a difficult pregnancy with her fifth child. After giving birth, she found a six-month contract job to do political polling from home. That ended in December. She and her husband, who is working at a factory, are fighting an eviction that may occur once a federal moratorium ends in March.

Cooper hopes to be able to work from home but is willing to take anything at this point. She’s had two interviews during her job hunt but no offers. She says she’d be willing to relocate.

“There’s nowhere to move,” said Cooper, 32. “There’s no jobs and no houses.”

Some hopeful signs have emerged recently to suggest that the economy might be picking up a bit. Auto sales rose solidly in January. And a gauge of business growth in the service sector picked up to its highest level in two years. It also showed that services firms added workers last month. A separate measure of manufacturing indicated that factories are also expanding. So is spending on home construction, as sales of existing homes actually soared last year to the highest level in 14 years.

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