Biden set to give historic $ 1.9 billion boost to US economy

Joe Biden is set to get final congressional approval for his $ 1.9 billion stimulus bill – a bet that massive tax intervention targeting middle and lower class families will accelerate America’s recovery without overheating of the economy.

After the U.S. Senate voted to approve the package on Saturday, the Democratic-controlled House of Representatives is set to give the bill its final green light on Tuesday, allowing it to be enacted by Biden.

Barring last-minute problems in the House, where Democrats hold a slim majority, the stimulus legislation will mark a big political victory for Biden, who has made it his top priority since joining the White House January 20.

The stimulus bill – known as the American Rescue Plan – represents one of the U.S. government’s largest interventions in the post-World War II economy – just short of the size of the pandemic stimulus of $ 2.2 billion as of March 2020, but higher than $ 787. stimulus plan for the 2009 financial crisis.

The prospects for its adoption have already led many private sector economists to revalue their forecasts for US growth this year. Federal Reserve officials will likely do the same when they release their latest economic projections next week.

But the plan has drawn criticism from Republican lawmakers – who have so far unanimously opposed the plan – as well as some economists, including Lawrence Summers, Treasury Secretary under Bill Clinton – who say it risks a harmful spike in inflation.

A recent run off of long-term government debt – with 10-year Treasury bill yields exceeding 1.5% for the first time in more than a year – has fueled these concerns, although key U.S. policymakers, in particular Janet Yellen, Secretary of the Treasury, and Jay Powell, Chairman of the Federal Reserve, dismissed concerns.

Around the world, the US stimulus package could give new impetus to the global recovery in the hope that widespread vaccinations throughout the year will help reopen many economies. But any unintentional rise in inflation or debt yields in the United States could destabilize markets and be particularly damaging for emerging markets.

Domestically, key Biden aides and many Democrats on Sunday introduced the plan as “historic and transformational” legislation for families who have struggled during the pandemic. The bill – which will be fully funded by increasing the US deficit – will send means-tested $ 1,400 to most Americans; extend federal unemployment emergency benefits worth $ 300 per week until September; increase a tax credit for children; providing assistance to states and local governments; and increase funding for schools and immunizations.

“This is a bill that reflects President Biden’s belief that the best way to get the economy back on track and grow it is to invest in working people and middle class people,” said Kate Bedingfield, White House communications director, at CNN. “It’s urgent aid that will help people across the country, but it’s also a long-term investment,” she added.

The US president applauded the passage of the Senate version in remarks on Saturday, after an overnight session in the upper house of Congress.

Biden was due to sign an executive order to strengthen voting rights on Sunday at an event commemorating the 56th anniversary of ‘Bloody Sunday’, when state soldiers beat and gassed civil rights protesters in Selma, Alabama .

The Senate’s passage of the stimulus legislation – by a 50-49 vote – was delayed for hours as Democratic leaders sought the decisive consent of Joe Manchin, the moderate Democrat of West Virginia, which insisted on stricter conditions for the unemployed. advantages.

Manchin toured US television stations on Sunday to proclaim his role in the talks, dismissing any fears the Biden plan was excessive.

“I can assure you that we have helped every segment of society right now, more than ever with this targeted law,” he told Fox News on Sunday.

Biden was due to sign a decree on Sunday for strengthen voting rights, at an event commemorating civil rights protesters who were tear gas and beaten by state soldiers in Selma, Alabama 56 years ago.

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