The US House of Representatives has approved an increase in stimulus payments to a majority of Americans, raising pressure on the Republican-controlled Senate to beef up this month’s $900bn economic relief package.
The vote in the lower chamber of Congress, which is controlled by Democrats, echoed the push for larger cheques in recent days by Donald Trump, the outgoing US president, which kept the fate of the entire relief bill in limbo over the Christmas holiday until he signed it on Sunday.
The enlargement of direct payments from $600 a person to $2,000 was approved on Monday by a vote of 275 to 134 in the House, turning attention to Republicans in the Senate to abandon resistance to larger cheques and a bigger stimulus package.
But it is far from clear that Mitch McConnell, the Republican Senate majority leader, will concede to holding a vote on the higher direct payments.
The battle on Capitol Hill over the bigger cheques has significant ramifications for the world’s largest economy, since larger government payments will lift income and consumption in the first quarter of 2021.
Economists have welcomed the rest of the package, which includes aid to small business and extending unemployment benefits. But larger direct payments to households will further support the recovery at a time when the winter coronavirus surge is hurting the labour market.
“This relief is crucial for millions of families,” Richard Neal, the Massachusetts Democrat who chairs the House Ways and Means committee, wrote on Twitter Monday morning.
Joe Biden, US president-elect, on Monday backed the boost to stimulus payments following an appearance in Wilmington, Delaware, responding “yes” when asked if he supported the measure.
The fight over stimulus payments could carry political consequences ahead of two Senate run-off elections in Georgia next month that will determine control of the upper chamber of Congress in the first two years of Mr Biden’s administration.
Democrats have argued that if they can win back the Senate, they will be able to approve more stimulus for households and implement more of Mr Biden’s economic agenda, which includes large-scale public spending partially funded by higher taxes on business and the wealthy.
While some Republican senators, such as Josh Hawley of Missouri, Lindsey Graham of South Carolina and Marco Rubio of Florida, have embraced the $2,000 cheques, others including Pat Toomey of Pennsylvania remain opposed. According to the Joint Committee of Taxation, the increase in the value of the payments would cost $464bn.
“There are a lot of ways to spend money, if that’s the goal. But let’s be smart about it. Let’s target assistance to those who need it most,” said Kevin Brady, the top Republican in the House Ways and Means committee.
Mr Trump finally signed the bill to release $900bn in coronavirus stimulus spending and the $2.3tn federal government budget on Sunday night after earlier in the week calling it a “disgrace” and demanding changes. In the end, no changes were made.
Tension over the stimulus payments has coincided with another budgetary battle in Washington over the $740bn annual defence funding bill, which Mr Trump vetoed last week in a clash with Congress.
In a separate vote held on Monday evening, the House moved to override Mr Trump’s veto with a bipartisan supermajority of lawmakers, adding pressure on the Republican-controlled Senate to do the same.
But some Republican senators, including Mr Graham, a close ally of Mr Trump’s, said he would only vote to override if Democrats accepted the president’s demand to repeal legislation protecting internet platforms from liability for online content.
The Section 230 legal shield for technology companies has become a prime target of conservative lawmakers and Mr Trump in recent months as they accused Silicon Valley of political bias in this year’s election campaign.
