Joe Biden is set to meet a group of moderate Republican senators on Monday afternoon as negotiations kick into high gear on his $1.9tn stimulus plan — his top priority since becoming US president.
Mr Biden invited the lawmakers, led by Susan Collins, the senator from Maine, to the White House after they proposed a scaled-back economic relief package worth about $600bn on Sunday.
Their offer is far below what the Biden administration and many Democrats believe is needed to prop up the US economic recovery this year as it continues to suffer fallout from the pandemic.
But Mr Biden, who vowed to seek bipartisan support for his agenda, is entertaining the proposal as the first concrete sign that some Republicans are willing to engage on his economic policies.
Mr Biden’s discussions with the group of Republican senators risk a backlash from members of his own Democratic party, who are pushing the president to plough ahead without seeking support from the opposition that would inevitably water down the stimulus.
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 special 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.
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 per person and make them accessible to fewer families. It would also cut out significant aid to state and local governments and reduce the duration of unemployment benefits, which would be big disappointments for Democrats.
However, like Mr Biden’s plan, it includes $160bn for new spending on the coronavirus response to enhance US testing capabilities and speed up vaccinations across the country.
The Biden administration may not be willing to seriously consider Ms Collins’ offer unless it is significantly boosted in the coming days. His 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 not of great 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 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.”