Senate Democratic leaders reached an agreement over unemployment benefits with moderate Democratic Sen. Joe Manchin III (W.Va.) late Friday, ending a nine-hour standoff that threatened to derail action on President Biden’s $1.9 trillion coronavirus relief bill.
“We have reached a compromise that enables the economy to rebound quickly while also protecting those receiving unemployment benefits from being hit with [an] unexpected tax bill next year,” Manchin said in a statement.
The deal revived action on Biden’s relief bill, his first major legislative initiative, which had stood in limbo in the Senate over hours of uncertainty after an earlier attempted compromise on unemployment insurance unraveled — raising questions about Democrats’ ability to govern with a 50-50 Senate.
With Manchin on board, Democrats are now within reach of passing the sweeping legislation that would send out a new round of $1,400 stimulus checks, $350 billion to cities and states, $130 billion to schools, billions for a national vaccine program and more — although they’ll first have to plow through dozens of other amendments in a chaotic process known as a “vote-a-rama” certain to last into the early morning hours Saturday.
“The president supports the compromise agreement, and is grateful to all the senators who worked so hard to reach this outcome,” said White House press secretary Jen Psaki. “It extends supplemental unemployment benefit into September, and helps the vast majority of unemployment insurance recipients avoid unanticipated tax bills. Most importantly, this agreement allows us to move forward on the urgently needed American Rescue Plan.”
The legislation would still have to go back to the House for final passage before getting sent to Biden to sign, something that’s expected to happen early next week. House Speaker Nancy Pelosi (D-Calif.) has guaranteed the House will pass the Senate’s version of the bill, though House liberals were voicing growing discomfort over changes pushed by Senate moderates they said watered down the bill.
The announcement of the final deal with Manchin capped a confounding day that began with Senate Majority Leader Charles E. Schumer (D-N.Y.) vowing passage of Biden’s relief bill — only to watch the process go off the rails as it became clear Manchin was not on board with an earlier version of the unemployment insurance agreement.
As originally passed by the House, the relief legislation would have increased the existing $300 weekly benefit to $400 and extended it through August. The benefits are now set to expire March 14, which Democrats and the Biden administration are eyeing as the deadline for passing the wide-ranging relief bill into law.
But Manchin had voiced persistent concerns about increasing the unemployment benefit over $300 per week, suggesting that doing so could keep workers from rejoining the workforce just as the economy tries to get back on its feet. So Friday morning Democratic aides announced that an agreement had been reached on a compromise amendment, to be offered by Sen. Thomas R. Carper (D-Del.), that would keep unemployment benefits at $300 a week and extend them through September, while also making the first $10,200 in benefits nontaxable to avoid tax shock hitting some Americans who’ve received the benefits.
Instead of clearing the way for action on the legislation, however, the supposed deal brought the Senate floor to a standstill for hours as Manchin huddled with Republicans who were offering competing amendments — and multiple other senators and aides milled about with little clear idea of what was happening.
In its final form, the deal extends the $300 weekly benefit to Sept. 6, instead of through the end of September as proposed Friday morning, and makes tax relief available only to those with household incomes below $150,000.
Despite Democrats’ ultimate success in breaking the logjam, the baffling developments underscored the challenges Biden faces in getting his agenda through Congress given the exceedingly narrow Democratic majorities in both chambers. After disavowing bipartisan negotiations to pass a sweeping relief bill opposed by the GOP, Biden confronted a scenario where a single balky moderate Democrat had the ability to upset his plans.
“What this proves is there are benefits to bipartisanship when you’re dealing with an issue of this magnitude,” said Senate Minority Leader Mitch McConnell (R-Ky.). “But no, they wanted to do it the hard way.”
As the day wore on Friday, Sen. John Thune (R-S.D.) and others jokingly expressed concern for Manchin, who single-handedly had the ability to throw Biden’s first major legislative effort off-track.
“I hope the Geneva Conventions applies to him,” Thune said.
“Save Joe Manchin!” said Sen. Lindsey O. Graham (R-S.C.).
Even after the deal was announced around 8 p.m. Friday evening, floor action was delayed for hours as aides finalized the unemployment insurance language and discussed further amendments for the night. In the process the Senate broke the record for longest roll-call vote ever, since a vote that opened at 11:03 a.m. Friday morning on a motion by Bernie Sanders (I-Vt.) aimed at restoring the $15 minimum wage was not gaveled shut until nearly 12 hours later, at 10:53 p.m. The previous record of 10 hours and 8 minutes for a roll-call vote was set in 2019 on a defense measure.
Senate Finance Chairman Ron Wyden (D-Ore.) said in an interview that he had spent the day in several conversations with Manchin and Schumer about the unemployment provisions in the bill. While disappointed the weekly benefit amount would not grow, Wyden praised the extension of benefits through the first week of September, expressing concern about the implications had they been set to expire in August with Congress out of session.
“We felt very strongly about avoiding this August cliff ... having a cliff in August is a prescription for chaos. Our priority was avoiding that; we have been able to do that,” Wyden said. He added: “These are not my first choices. Not by a long shot.”
The extended unemployment benefits are just one piece of a much larger bill that Biden insisted anew on Friday was critical to shoring up the economy and helping to stabilize the health-care system.
“The rescue plan is absolutely essential to turning this around, getting kids back to school safely, giving a lifeline to small businesses and getting the upper hand on covid-19,” Biden said at an event at the White House.
Republicans, however, attacked the legislation as a liberal wish-list and said the chaotic events of Friday demonstrated the dangers of attempting to govern on a partisan basis in a narrowly divided Congress.
“That’s why reconciliation is a bad idea. They should have worked with us,” said Sen. Rob Portman (R-Ohio), referring to the “budget reconciliation” process Democrats are using to push the legislation through the Senate on a simple majority vote, instead of with the 60 normally required.
Portman had authored an alternate unemployment insurance amendment that would have extended the $300 weekly benefit into mid-July, and had spoken with Manchin throughout the day Friday to try to bring him on board, ultimately unsuccessfully.
The uncertainty around the unemployment insurance provisions arose as the Senate was about to plunge into a grueling “vote-a-rama,” which involves votes on dozens of amendments, one after another, hour after hour until senators exhaust themselves and stop.
The first to be offered was by Sanders on the minimum wage. The complicated rules governing reconciliation bills prohibit certain items without a particular budgetary impact, and the Senate parliamentarian ruled last month that the minimum wage increase, a top priority for many liberals, did not pass that test.
The Senate was poised to defeat Sanders’s move, with Republicans united against it along with eight Democrats — but the vote was held open for hours to accommodate the drawn-out behind-the-scenes drama over jobless benefits. When it was finally gaveled closed the tally was 42 in favor and 58 against.
When the Senate resumed work around 11 p.m., McConnell made a motion to adjourn until Saturday morning, but Schumer vowed to stay in session until Democrats passed the underlying bill.
“Now that this agreement has been reached we are going to power through the rest of the process and get this bill done,” Schumer said.
Friday’s debate kicked off after Sen. Ron Johnson (R-Wis.) forced Senate clerks to read the entire 628-page bill aloud, a process that took almost 11 hours and concluded around 2:05 a.m. Friday. That came after the Senate voted 51 to 50 on party lines Thursday afternoon to open debate, with Vice President Harris breaking the tie. The partisan vote to start debate was a likely sign of the final outcome, although Sen. Lisa Murkowski (R-Alaska) said she was still examining the bill after Democrats made some last-minute changes that could help her state and others.
The last-minute wheeling-and-dealing was a sign of Democratic leaders’ determination to hold together to pass Biden’s first major piece of legislation. It would be one of the largest bills ever enacted in congressional history, and its passage would stand as an early success for the new president.
Even before the late change on unemployment benefits, Biden and Democratic leaders already had agreed to some other changes aimed at addressing concerns raised by moderate Democrats, including narrowing eligibility for stimulus payments and earmarking some of the state and local funding for capital projects.
Congress passed a series of bills last year totaling some $4 trillion to fight the pandemic, including $900 billion in December, and Republicans said that was more than enough.
The debate came as the U.S. economy saw encouraging news on Friday in a jobs report showing 379,000 jobs had been added in February. Still, the unemployment rate remained dramatically elevated above pre-coronavirus levels with more than 9 million Americans remaining jobless.