Jobless benefits fight slows work on Biden's $1.9 trillion COVID-19 aid bill

WASHINGTON (Reuters) – A battle over extending federal jobless benefits during the coronavirus pandemic delayed progress in the U.S. Senate on Friday on President Joe Biden’s $1.9 trillion COVID-19 aid bill, as senators jousted over the scope of competing proposals.

After the Senate defeated a last-ditch attempt by some of Biden’s fellow Democrats to raise the federal minimum wage, work on his first major legislative package since taking office in January ground to a halt as senators met behind closed doors to find a way forward.

“We’re completely stalled out,” No. 2 Senate Republican John Thune told reporters.

Unemployment compensation was one of many battles ahead on the sweeping bill, as the Senate braced for dealing with scores of amendments that could extend into the weekend. The legislation currently calls for providing $400 per week in federal jobless benefits, on top of state benefits, through Aug. 29 to help Americans who have lost jobs amid the economic trauma of the coronavirus pandemic.

Democrats hold a slim majority in the Senate and House of Representatives. Congress is scrambling to complete work on the legislation so Biden can sign it into law before March 14, when some existing pandemic-related benefits are due to expire.

Senate Majority Leader Chuck Schumer was walking a tightrope as he tried to fine-tune the bill and steer it through the Senate, aiming to keep Senate liberals and moderates happy while not alienating House Democrats. Since the Senate already has changed the bill with the removal of the House-passed minimum wage increase, if it votes to approve the legislation it would have to be sent back to the House for final passage.

A Democratic congressional aide said liberal and moderate senators have agreed upon a compromise that would set the federal jobless benefit at $300 per week, on top of state benefits, through September.

Moderate Democratic Senator Joe Manchin, a pivotal vote in the closely divided Senate, had been pushing to lower the benefit from the bill’s current $400, the amount already approved by the House. Aides to Manchin did not immediately respond to requests for comment on the Democratic deal.

Republican Senator Rob Portman is pushing a competing plan that would put the benefit at $300, but only through July 18. Major business groups such as the U.S. Chamber of Commerce and National Federation of Independent Business supported Portman’s plan.

Senators rejected a proposal by Senator Bernie Sanders to more than double the $7.25-per-hour federal minimum wage to $15 over five years. Sanders called the current level a “starvation” wage that has been in place for more than a decade.

The Senate fell far short of the 60 votes needed to overrule the Senate parliamentarian’s decision that a minimum wage increase cannot be included in the bill because of special rules governing debate.

Those rules allow for advancing the emergency spending bill, which the Biden administration has said is needed to stem the continuing economic fallout from the pandemic, with only a simple majority of supporters in the 100-member Senate, instead of 60 votes needed for most bills to clear procedural hurdles.

Democrats pledged to continue pursuing the minimum wage increase in legislation separate from the COVID-19 aid bill.

As Congress raced to approve the bill, the U.S. Labor Department reported on Friday that U.S. employment surged in February, adding 379,000 jobs, significantly higher than many economists had expected.

The U.S. unemployment rate, while still high at 6.2% last month, was down from 6.3% in January.

‘RUSH JOB’

With Senate Republicans so far moving in lock-step against the bill, Minority Leader Mitch McConnell called the legislation “a poorly-targeted rush job,” adding, “Our country is already set for a roaring recovery. We are already on track to bounce back from this crisis” without fresh stimulus money.

White House spokeswoman Jen Psaki defended the $1.9 trillion price tag, noting that Friday’s jobs data showed the country would not return to pre-pandemic employment levels for two years, with 9.5 million people still out of work.

“If that’s satisfying to Republicans in Congress, then certainly they can speak for themselves,” Psaki told a briefing.

Schumer said that with millions of jobs still lost to the pandemic and people struggling to pay rent, Washington must act aggressively.

With no votes to spare, Senate Democrats have tweaked the legislation to ensure all 50 of their members would support it, which would then allow Vice President Kamala Harris to cast the deciding vote if no Republicans support it. Those changes would steer more aid to smaller U.S. states and add money for infrastructure projects, among other adjustments.

Republicans, who broadly backed COVID-19 relief spending early in the pandemic when Donald Trump was president, have criticized the Democratic-backed bill’s price tag.

The relief legislation includes funding for vaccines and medical supplies, extends jobless assistance and provides a new round of emergency financial aid to households, small businesses and state and local governments.

Opinion polls indicate broad public support.

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