US Congress Finally Reaches Agreement on $900 Billion Economic Stimulus Bill

Includes SME support, cash payments, and expanded unemployment benefits
Final agreement reached ahead of federal government shutdown
Worst-case scenario avoided before Biden administration inauguration

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The U.S. Congress has finally agreed on a $900 billion stimulus bill to support economic damage caused by the novel coronavirus infection (COVID-19). As a result, the United States has prepared a buffer to defend against the economic downturn along with the COVID-19 vaccine. The federal government budget was also agreed upon, allowing the federal government to avoid a temporary shutdown.

According to U.S. media including The New York Times on the 20th (local time), Senate Majority Leader Mitch McConnell officially announced the agreement on the stimulus bill that day. Leader McConnell said, "More help is coming. Americans will not have to fight COVID-19 alone during the year-end holiday season." Senate Minority Leader Chuck Schumer also explained, "The agreement is not perfect, but it will provide emergency relief to a nation in crisis."

The U.S. Democrats and Republicans had attempted to prepare additional support bills for economic aid, but differences in the amount caused difficulties in reaching an agreement. The Democrats emphasized large-scale support for state and local governments, but the Republicans opposed this. Even after the November presidential election, negotiations went in circles as President Donald Trump focused solely on contesting the election results and the Republicans took a passive stance.

The turning point came when bipartisan lawmakers proposed a $908 billion support bill. On the 14th, after the presidential electoral college vote confirmed Joe Biden's victory, negotiations gained further momentum. Ultimately, both parties narrowed their differences by giving up their respective demands and reached a final agreement. The issue of ending the Federal Reserve's (Fed) emergency lending authority emerged as a last-minute hurdle, but a compromise was found allowing the Fed to make additional loans without congressional approval while Congress retains oversight.

This bill focuses on $300 billion for small business employment measures, extension of unemployment insurance benefits, and $600 cash payments to adults and children. The cash payment was reduced by half from the previous $1,200. Payments decrease for those earning more than $75,000 annually. Although cash payments were initially expected to be excluded, they were added in the final stages of negotiation.

When the cash payment proposal was removed from the bipartisan agreement, progressive Democrat Senator Bernie Sanders emphasized the necessity of cash payments. President Trump also stressed the need for direct cash payments through Twitter that day.

The eviction moratorium for those unable to pay rent due to COVID-19 will be extended by one month from the end of this month. Millions are thus spared from being forced onto the streets in the middle of winter. $15 billion is allocated for airline employee payroll support, and $10 billion for childcare support. Additionally, $30 billion will be invested in vaccine procurement and testing.

This measure is expected to act as a catalyst for the U.S. economy, which is again facing crisis due to the suspension of economic activities caused by nearly 200,000 new COVID-19 infections daily. The U.S. Congress is attempting to pass the bill within the day. However, the $1.4 trillion federal government budget for this year will be delayed by one day.

Accordingly, Congress decided to pass a one-day temporary budget. Once both the House and Senate pass the bill and President Trump signs it, the bill will take effect. The Washington Post (WP) predicted that President Trump would not oppose this stimulus bill. However, Trump has recently expressed his intention to veto the National Defense Authorization Act, which was passed bipartisanship by both parties.

Through this measure, the total fiscal spending by the U.S. government to combat the COVID-19 crisis will reach $4 trillion. This is a staggering amount equivalent to 20% of the U.S. Gross Domestic Product (GDP). It is considered an unavoidable choice to overcome the worst-ever COVID-19 pandemic situation.

For President-elect Biden, at least minimal support will begin before his inauguration on January 20 next year, easing his burden. Senate Majority Leader Schumer said the aid package is insufficient but called it "an important step that allows the incoming president to begin efforts to fix the ailing economy."

This content was produced with the assistance of AI translation services.