Joe Biden begins horse-trading over $1.9tn stimulus package

Joe Biden began horse-trading with Republicans over his $1.9tn stimulus package on Monday in his first big negotiating session with political rivals since becoming US president, as he ramped up efforts to build momentum behind his Covid relief bill.

Mr Biden met a group of 10 mostly moderate Republican lawmakers, led by Susan Collins, the senator from Maine, for two hours after they proposed their own version of an economic relief package worth $618bn.

The Republican offer is far below what the Biden administration and many Democrats believe is needed to prop up the US economic recovery this year as the country continues to suffer fallout from the pandemic.

But Mr Biden, who vowed to seek support from Republicans for his agenda despite a toxic political climate, is entertaining the proposal to test the willingness of opposition members to engage on his economic policies.

After the discussions, Ms Collins said she and her colleagues had held “a very productive, cordial two-hour meeting with the president” and that they were “very appreciative” that Mr Biden had spent so much time with them.

She added: “It was a very good exchange of views, I wouldn’t say that we came together on a package tonight. No one expected that in a two-hour meeting. But what we did agreed to do is to follow up and talk further.”

While Mr Biden has so far vowed to quickly seek both a large and bipartisan economic package, he may soon have to decide between speed and across-the-aisle consensus.

The benefits of acting now — and acting big — will far outweigh the costs in the long run

His talks with the Republican group risk a backlash from members of his own Democratic party, who are pushing the president to plough ahead without a bipartisan deal that would inevitably shrink the size and impact of the stimulus.

“I think the Republican offer is sincere, but Biden and Republicans have VERY different ideas for how we address this crisis and voters very deliberately chose Biden’s agenda,” Chris Murphy, the Democratic senator from Connecticut, wrote in a tweet on Monday.

He added: “Some compromise is always warranted, but we have an obligation to see the voters’ intent through.”

Under the Senate’s current legislative practice, Mr Biden would need at least 10 Republican lawmakers to back his plan in order to clinch the supermajority necessary to advance it to a final vote. However, Democrats have said they are willing to use a procedure known as budget reconciliation, which is reserved for certain tax and spending measures, to pass the stimulus bill, enabling them to circumvent Republican support.

Earlier on Monday Jen Psaki, the White House press secretary, said Mr Biden viewed the Republican plan as a “good faith effort” to reach a deal and was glad to have an “exchange of ideas” about it. But she played down hopes of a big breakthrough, saying the meeting was not “a forum to make or accept an offer”.

Mr Biden’s $1.9tn stimulus plan would include direct payments of $1,400 to individuals, aid to state and local governments, an expansion of tax credits for children and an extension of federal jobless benefits.

The proposal led by Ms Collins would pare back the direct payments to $1,000 a person and make them accessible to fewer families by capping eligibility at $50,000 of annual income per person. It would also cut out significant aid to state and local governments and reduce the duration of emergency unemployment benefits until the end of June, compared with September under Mr Biden’s plan, which many Democrats will object to.

However, like Mr Biden’s plan, it includes $160bn for new spending on the coronavirus response to enhance US testing capabilities and speed up the vaccine rollout.

The Biden administration may not be willing to seriously consider Ms Collins’ offer unless it becomes significantly more generous in the coming days.

The president’s top economic officials, including Janet Yellen, the Treasury secretary, have been arguing that the risks of doing too little to jolt the US economy are far greater than the risks of doing too much, particularly with interest rates so low that running higher deficits is of less concern.

“The benefits of acting now — and acting big — will far outweigh the costs in the long run,” Ms Yellen wrote in a tweet on Sunday.

But Republicans may not be prepared to move any higher, given resistance within their party to higher spending and a reluctance to hand Mr Biden an early legislative victory. Pat Toomey, the Republican senator from Pennsylvania, said he did not see the case for a new stimulus package since Congress agreed to $900bn in spending in December.

The US economy was no longer in “free fall” but in a “strong growth mode”, Mr Toomey told the business news channel CNBC on Monday. “It looks to me like a whole lot more of what we just did, literally just 36 days ago. Why we need a few weeks later to come back and do it all over again, I don’t get that.”