Key Democrat Rejects GOP’s Counterproposal: Stimulus Update

(Bloomberg) -- A key Democrat rejected the $618 billion stimulus proposal put forward by 10 Republican senators, hours before President Joe Biden is scheduled to meet with the lawmakers about their counter-offer to his $1.9 trillion Covid-19 relief package.

The group of 10 -- composed of centrist lawmakers such as Susan Collins of Maine, along with more conservative-leaning senators including Mike Rounds of South Dakota -- released details of their proposal Monday morning. It features a scaling down of stimulus checks, offering $1,000 with tighter income limits, against Biden’s $1,400 proposal.

Ron Wyden, an Oregon Democrat and incoming chairman of the Senate Finance Committee -- which oversees tax, health care, stimulus payments and unemployment benefits -- said the plan is a “non-starter.”

House Democrats, meanwhile, are planning to start Monday on preparing the legislative ground for a stimulus bill that forgoes Republican support.

Top Democrat Rejects GOP Counteroffer on Stimulus

A key Democratic senator rejected the $618 billion stimulus counterproposal put forward by 10 Republican lawmakers, reducing the likelihood of any quick accord in Congress.

Incoming Senate Finance Committee Chairman Ron Wyden said the plan is a “non-starter” given its size relative to Biden’s $1.9 trillion proposal.

“The package outlined by 10 Senate Republicans is far too small to provide the relief the American people need,” Wyden said in a statement Monday.

Wyden said the proposal to extend expiring supplemental unemployment benefits to June 30 is particularly unacceptable and that no less than a six-month extension from March must be included to avoid “jumping from cliff to cliff every few months.”

The Democrats’ call for a large stimulus was joined by Jim Justice, Republican governor of West Virginia -- the home state of Senator Joe Manchin, a centrist Democrat whose support for any eventual Democrat-only package will be crucial given the Senate’s 50-50 partisan split.

“What we need to understand is that trying to be per se fiscally responsible at this point in time with what we have got going on this country if we actually throw away some money right now, so what? We have really got to move and get people taken care of,” Justice said on MSNBC Monday. -- Erik Wasson

CBO Upgrades Its Forecast for U.S. Economic Recovery

The Congressional Budget Office said it sees the U.S. economy recovering from the coronavirus pandemic much faster than previously expected -- an upgrade that potentially complicates prospects for President Joe Biden’s $1.9 trillion relief plan.

The CBO, a nonpartisan arm of the legislature, forecasts gross domestic product will increase 1.7% annually from 2020-2024, according to its economic outlook released Monday. That’s a 0.7 percentage point increase from the previous expectation released in July, months before Covid-19 vaccines were shown to be effective and approved for use, which put the pandemic’s potential end more clearly in sight.

The stronger forecast could bolster Republican objections to Biden’s massive stimulus proposal, which seeks to improve vaccine distribution and deliver funds to households suffering during the coronavirus-spurred recession.

The CBO said its upgrade came “in large part because the downturn was not as severe as expected and because the first stage of the recovery took place sooner and was stronger than expected,” according to the CBO report. In addition, stimulus approved in December “played a part in improving the economic outlook.” -- Katia Dmitrieva

Republican Group Pitches Scaled-Down Checks in Counter-Offer (9:55 a.m.)

The group of 10 Republicans set to meet with Biden at the White House released details of their $618 billion Covid-19 relief plan Monday morning.

The proposal includes $1,000 in direct payments, compared to Biden’s $1,400 proposal. The checks will be phased out starting at $40,000 in earnings a year, with a cap of $50,000. That’s much tighter than the $75,000 to $87,000 phase-out of the payments enacted in a December relief package. Dependent children and adults would receive $500 payments instead of $1,400 payments.

Direct Covid-19-related spending amounts to $160 billion, mirroring Biden’s proposal. There’s $132 billion for expanded unemployment benefits. The plan would extend the current $300 federal weekly supplemental payments, which expire in mid-March, to June. That compares with a $400 benefit through September in the Biden plan.

The GOP proposal includes $50 billion for small businesses, along with $20 billion each for childcare and school reopening. The stimulus checks are estimated to cost $220 billion. The overall price tag is $618 billion.

Omitted from the proposal are Biden-plan items including aid for state and local governments and a minimum-wage increase to $15 per hour. -- Erik Wasson

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