Senate Passes $1.9tn Relief Plan to Boost US Economy
08 Mar 2021 · 3rd Party Analysis
- Stimulus bill passes Senate vote 50-49
- President Biden to sign the bill by March 14
The long-awaited stimulus bill has passed a Senate vote of approval on Saturday. President Biden’s first and most important economic priority is now close to being finalized as it only needs the House to vote on the latest version and then it will be sent to President Biden.
“Today, the Senate passed the American Rescue Plan – bringing us one step closer to delivering much-needed relief,” the President said in a video post on Twitter. “I want to thank all of the Senators who worked so hard to reach a compromise and voted to pass the American Rescue Plan. It wasn’t easy — but it was so desperately needed”, he continued as he delivered his remarks on the approval of the bill.
The stimulus package, a massive fiscal intervention, passed the Senate 50-49 on Saturday after it landed for a formal debate a few days prior. The bill now heads back to the House for another vote on Tuesday before it reaches the President’s desk so it could be signed into law. The vote is to approve some amendments by Senators, including limited jobless benefits and increased tax relief. “I hope the American Rescue Plan receives a quick passage in the House so it can be sent to my desk to be signed”, Mr. Biden said in a tweet, following the approval of the package.
The big-ticket spending of $1.9tn aims to provide a boost to the US pandemic-battered economy. The latest version of the stimulus bill, crafted after a 25-hour voting session, includes waves of spending on different priorities such as vaccine distribution programs and virus-testing programs, local and state governments, an extension of jobless benefits, direct payments to individuals and households.
US Labor Market Roars Back
The House vote on Tuesday is expected to pass without any objections as Democrats aim to enact the legislation before the current unemployment benefits expire on March 14. Thanks to the bill, $300 checks in renewed weekly unemployment benefits will be secured through Sep 6. The stimulus package proposed by Mr. Biden is the second-largest in US history. The victory will allow President Biden to continue working on his agenda, the next step being a massive infrastructure and manufacturing recovery bill.
As the markets head into their first open after the approval of the stimulus bill, US equity futures are rather unimpressed. Dow Jones futures and S&P futures remain near flat levels, while Nasdaq futures point to a negative open by over 1.50%. The pandemic-related stimulus bill has recently invoked fears of inflation which has been narrating investors’ sentiment toward riskier assets like stocks. Worries over accelerating inflation and rising bond yields put a lid on stocks last week.
Meanwhile, the latest US unemployment data showed that hiring is staging a strong comeback as Covid cases decline and restrictions are being relaxed across states. The US economy created 379,000 jobs in February, more than double the jobs created in January, 166,000 (revised from 49,000).