WASHINGTON: Speaker of the House Nancy Pelosi speaks during a press conference with other House Democratic leaders about COVID-19 financial relief and minimum wage on Capitol Hill on Friday. — AFP

WASHINGTON: The US House passed an enormous, $1.9 trillion coronavirus relief package early yesterday, hailed by Democrats as a critical step in funneling new funding toward vaccinations, overburdened local governments, and millions of families devastated by the pandemic. Four days after the Covid-19 death toll surpassed 500,000 in the United States, the sprawling measure backed by President Joe Biden and seen as a moral imperative by many now heads to the Senate for consideration next week.

“After 12 months of death and despair, the American recovery begins tonight,” congressman Brendan Boyle told the House chamber shortly before lawmakers approved the package on an rare post-midnight vote of 219 to 212. No Republicans voted for the bill. The sharply partisan result comes weeks after Biden’s Jan 20 inauguration, when he called for unity in the face of a once-in-a-century health crisis.

The package cleared the House despite a major setback for Democrats, when a key Senate official ruled Thursday that the final version of the bill cannot include a minimum wage hike. Biden had campaigned extensively on raising the national minimum wage to $15 an hour, from a rate of $7.25 that has stood since 2009.

He aimed to include it in the rescue plan, which directly provides $1,400 checks to most Americans and allots billions of dollars to boost vaccine delivery, help schools re-open and fund state and local governments. It extends unemployment benefits, set to expire mid-March, by about six months, as well as a moratorium on evictions for millions of people struggling to pay rent.

The bill is on track to be the second largest US stimulus ever, after the $2 trillion package Donald Trump signed last March to fight the pandemic’s devastating spread. Even as the Senate parliamentarian ruled against including the minimum wage language in the bill as written under budget reconciliation rules, Democrats kept the provision, highlighting their “fight for 15” as a top party priority.

“We will not rest until we pass the $15 minimum wage,” Speaker of the House Nancy Pelosi said. Even without the wage hike, she said the bill was critical and it would be “catastrophic” if it does not become law. “The American people need to know that their government is there for them,” she told the chamber. “As President Biden has said, help is on the way.”

‘Dead of night’

Republicans fumed over the bill’s historically high cost - and the optics of holding such a consequential vote in predawn hours. “Democrats are so embarrassed by all the non-COVID waste in this bill that they are jamming it through in the dead of night,” House Minority Leader Kevin McCarthy said. The measure is “bloated,” partisan and “unfocused”, with the majority of funding going to projects not directly related to fighting the pandemic, McCarthy said.

He and fellow Republicans accused Democrats of using a pandemic to push forward a liberal wish list. The package “just throws out money without accountability”, McCarthy added. Over in the 100-member Senate, the rules of so-called reconciliation relate to budgetary bills that are allowed to bypass Republican filibuster efforts and pass with just a simple majority, rather than the typical 60 votes.

The parliamentarian concluded that the wage hike does not meet the standard, and since there is no Republican support for the bill in the evenly split Senate, the measure will be taken out in order for COVID relief to pass. Progressives like Senator Bernie Sanders cried foul, insisting that the “archaic and undemocratic” rules prevent Congress from passing much-needed legislation sought by a majority of Americans. Biden however made clear through a spokesperson that he respects the decision but “urges Congress to move quickly to pass the American Rescue Plan,” and would work with lawmakers to get it over the finish line.

Meanwhile, an injection of pandemic aid filled Americans’ wallets last month, though spending rose modestly, according to government data released Friday, giving a boost to the economy as it claws its way back from recession. A key inflation measure in the data showed prices also are starting to bounce back from the depths of the crisis, which could add to investor’s fears about rising borrowing costs amid the recovery.

The $900 billion COVID-19 stimulus package approved in late December sent $600 checks to nearly all US workers and extended extra unemployment payments for those who lost their jobs. As the checks started to roll in, personal incomes surged by 10 percent - the second biggest increase on record since the start of this data report began in 1959 - the Commerce Department said. “The increase in personal income in January was more than accounted for by an increase in government social benefits to persons as payments were made to individuals from federal COVID-19 pandemic response programs,” the report said. “Unemployment insurance also increased, reflecting an increase in pandemic unemployment compensation.” — AFP

Spending - personal consumption expenditures (PCE) - rose 2.4 percent from December, rebounding after two months of declines to post a gain of $340.9 billion. While the report said the increases “were widespread across all categories, led by recreational goods and vehicles”, spending on services, which includes travel, are 7.0 percent below Jan 2020.

But as spending makes a comeback, prices could come roaring back after being depressed amid the pandemic shutdowns last year. That worry has ignited a spike in depressed yields on the 10-year Treasury note, a red flag for investors who fear the Federal Reserve will be forced to raise the benchmark interest rate. The Fed’s preferred inflation measure, the PCE price index, increased 0.3 percent in the month and was 1.5 percent higher than January 2020, according to the report - still well below the Fed’s 2.0 percent target. — AFP