Biden's trillion-dollar Covid-19 aid plan a test of bipartisan support

WASHINGTON • United States President-elect Joe Biden is set to unveil a Covid-19 relief package rivalled in size only by last year's US$2 trillion (S$2.65 trillion) Cares Act, in his first legislative test in the face of a split US Senate and a deteriorating economy.

Transition officials developed a proposal with Democratic lawmakers and their staff in recent days that is anticipated to be at least the US$900 billion of last December's Bill, with incoming Senate Majority Leader Chuck Schumer pressing for more than US$1.3 trillion.

Last week, Mr Biden put the "entire package" at "trillions of dollars", and many Democrats believe it will be as much as US$2 trillion, while others expect the coronavirus-only portion will fall closer to US$900 billion.

That means that other spending could take the package to the higher end of the various estimates. Treasury yields rose in Asia yesterday amid speculation that will be the case.

Little more than a week after the shock storming of the US Capitol, and amid a political atmosphere charged by the second impeachment of President Donald Trump, the incoming President is seeking significant bipartisan backing for his aid plan.

Success on that score would distinguish him from his two immediate Democratic predecessors - no Republican senators voted for Mr Bill Clinton's first economic plan, and only three did so for Mr Barack Obama's.

Timing for Congress to debate and vote on Mr Biden's legislation is unclear, as the Senate may be consumed by Mr Trump's impeachment trial when Mr Biden's presidency begins.

Mr Biden was set to introduce his plan yesterday evening from Wilmington, Delaware, hours after a report forecast to show that over 700,000 Americans filed jobless claims in the last week - a figure that exceeds the worst days of the 2007-09 recession.

Mr Biden's plans will "reflect the urgency of the economic situation that our country finds itself in and the need for action - urgent action", said Mr Brian Deese, who will serve as Mr Biden's National Economic Council director.

Mr Biden aims to replicate the bipartisanship behind the December aid agreement, Mr Deese said. "We need to focus on unity, even in a moment that is challenging and difficult as this one."

Special unemployment benefits approved last year will run out in mid-March, which looms as a deadline for speeding help to millions of Americans impoverished by the pandemic.

Number of Americans who filed jobless claims in the last week - a figure that exceeds the worst days of the 2007-09 recession.

"The two months will pass pretty quickly if things bog down" in legislative negotiations, said Mr Stephen Stanley, chief economist at Amherst Pierpont Securities LLC. "It's not hair-on-fire urgent, but it's certainly going to be coming up pretty quickly."

Previewing yesterday's announcement, Mr Biden last week said that "trillions of dollars" in spending would take advantage of historically low interest rates to invest in both short-term economic support and long-term development. A broader Bill in the spring would be focused on longer-term goals such as infrastructure and climate change, said people familiar with the matter.

According to transition and congressional officials, key elements of the pandemic relief plan include an increase in direct payments to US$2,000 from the US$600 approved last December.

Last week, Mr Biden also pledged to provide aid to US municipalities that may have to fire thousands of teachers, police officers and firefighters across the country, and more help to small businesses.

BLOOMBERG, AGENCE FRANCE-PRESSE