After Trump backs down on stimulus Bill, Democrats aim for higher relief cheques

WASHINGTON/PALM BEACH, FLORIDA (REUTERS) - Democrats in the United States Congress on Monday (Dec 28) will try to push through expanded US$2,000 (S$2,655) pandemic relief payments for Americans after President Donald Trump backed down from a fight with lawmakers that could have shut down the federal government.

In a sudden reversal late on Sunday (Dec 28), Mr Trump signed into law a US$2.3 trillion pandemic aid and spending package, restoring unemployment benefits to millions of Americans and providing funds to keep government agencies running.

Mr Trump, who leaves office on Jan 20 after losing November's election to President-elect Joe Biden, retreated from his threat to block the Bill, which was approved by Congress last week, after he came under pressure from lawmakers on both sides.

The Republican president, who golfed on Sunday and remained out of public view even as a government crisis loomed, last week called the Bill a "disgrace" and demanded Congress change it to increase the size of stimulus cheques for struggling Americans from US$600 to US$2,000 while also cutting some other spending.

It was not immediately clear why Mr Trump, who has refused to concede defeat to Mr Biden, changed his mind on the stimulus package. His surprise, last-minute resistance had threatened to inject further chaos into the final stretch of his presidency.

Despite that, Democratic lawmakers who have a majority in the House of Representatives and have long wanted US$2,000 relief cheques, hope to use a rare point of agreement with Mr Trump to advance the proposal - or at least put Republicans on record against it - in a vote on Monday.

Many of Mr Trump's fellow Republicans oppose the higher payments, and Mr Trump might not have the influence to budge them.

The issue appears unlikely to gain traction in the Republican-controlled Senate.

Many economists agree the financial aid in the Bill should be bigger to get the economy moving again but say that immediate support for Americans hit by coronavirus lockdowns is still urgently needed.

After signing the Bill behind closed doors at his beachside club in Florida, Mr Trump sought to put the best face on his climb-down, saying he was signing it with "a strong message that makes clear to Congress that wasteful items need to be removed".

"Much more money is coming," he insisted in a statement, though he provided nothing to back this promise.

With less than a month left in office, Mr Trump is unlikely to get his fellow Republicans to back the extra money for individuals or persuade Democrats to accept spending cuts he says he wants elsewhere in the spending Bill, particularly in foreign aid.

Unemployment benefits being paid out to about 14 million people through pandemic programmes lapsed last Saturday but will be restarted now that Mr Trump has signed the Bill.

The package includes US$1.4 trillion in spending to fund government agencies. If Mr Trump had not signed the legislation, then a partial government shutdown would have begun on Tuesday that would have put millions of government workers' incomes at risk.

Democrats had accused Mr Trump of deepening coronavirus-related hardships by holding up the Bill.

Americans are living through a bitter holiday season with a pandemic that has killed nearly 330,000 people in the United States and a daily death toll now repeatedly well over 3,000, the highest since the pandemic began.

The relief package also extends a moratorium on evictions that was due to expire on Thursday, refreshes support for small business payrolls, provides funding to help schools reopen and aid for the transport industry and vaccine distribution.

Global share prices ticked up in response to the news that Mr Trump had signed the stimulus plan and backed away from a government spending crisis.

US S&P futures and Japan's Nikkei index gained about 0.4 per cent, and spot gold prices rose nearly 1 per cent.

Also on Monday, lawmakers will seek to override Mr Trump's recent veto of a US$740 billion Bill setting policy for the Defence Department. If successful, it would be the first veto override of Mr Trump's presidency.

Mr Trump said he vetoed the legislation, which has passed every year since 1961, because he objected to liability protections for social media companies unrelated to national security and did not want to rename military bases named after generals who fought for the pro-slavery Confederacy during the Civil War.

Although his previous eight vetoes were all upheld thanks to support from Republicans, advisers said this one looked likely to be overridden. The Bill passed both houses of Congress with margins greater than the two-third majorities that would be needed to override the president's veto.