US Congress seals $1.2 trillion Covid-19 relief plan

US congress agreed on a nearly $US900 billion Covid-19 relief package for millions of Americans on Monday.

‘Packed with targeted policies to help struggling Americans’: Mitch McConnell arrives at the Capitol on the cusp of deal on Monday. Picture: AFP

The US congress has agreed on a COVID-19 relief package worth almost $US900bn ($1.2 trillion) for millions of Americans, in a deal that follows months of wrangling and comes as the nation battles the world’s largest outbreak of the virus.

The package includes aid for vaccine distribution and logistics, extra jobless benefits of $US300 per week, and a new round of $US600 stimulus cheques — half the amount provided in cheques distributed in March under the CARES Act.

The deal reached on Sunday (Monday AEDT) comes after months of partisan debate and finger-pointing as well as last-minute negotiations that culminated in a deal congress members said they hoped to formally approve on Monday US time.

“We’ve agreed to a package of nearly $US900bn. It is packed with targeted policies to help struggling Americans who have already waited too long,” Republican Senate leader Mitch McConnell said.

Democrat House of Representatives Speaker Nancy Pelosi and Senate minority leader Chuck Schumer confirmed that an agreement had been reached with Republicans and the White House on a deal that “delivers urgently needed funds to save the lives and livelihoods of the American people as the virus accelerates”.

The agreement also contains $US25bn in housing aid to prevent evictions and nearly $US100bn to help schools and childcare facilities reopen.

Congress was working under a deadline of midnight Sunday (4pm Monday AEDT), needing to reach consensus both on assistance to hard-pressed American households and companies and on the 2021 federal budget in order to avoid a government shutdown.

Number two Democrat in the House of Representatives Steny Hoyer said he expected the deal to pass on Monday and then head to the Senate. That meant it required passage of a stopgap measure — which was signed by President Donald Trump late on Sunday — to keep the federal government funded an extra 24 hours and avert a shutdown.

The House and Senate approved the stopgap measure on Sunday night. “The House will move swiftly to pass this legislation immediately, so it can quickly be sent to the Senate and then to the President’s desk for his signature,” Senator Schumer and Ms Pelosi said. “With the horrifying acceleration of daily infections and deaths, there is no time to waste.”

In the wake of the deal, president-elect Joe Biden — who has promised to pass another massive bailout when he takes office next month — welcomed the agreement but said more would need to be done. “Immediately, starting in the new year, congress will need to get to work on support for our COVID-19 plan, for support to struggling families, and investments in jobs and economic recovery,” Mr Biden said.

Democrats and Republicans have traded blame for months over the failure to reach a deal on this second relief plan — and continued to do so even after the deal was agreed on Sunday.

As the pandemic takes a record toll in US cases and deaths, the economy has been gravely battered, with jobless numbers rising in the past two weeks.

Making matters worse, millions of Americans were poised to lose jobless benefits after Christmas, and federal moratoriums on evictions and repayment of student loans are set to expire at the end of the month.

New assistance for struggling businesses and the unemployed is seen as critical to getting the world’s biggest economy back on its feet, while new vaccines offer hope that an end to the pandemic may be in sight.

The initial $US2.2 trillion package passed in March was credited with preventing a much more severe economic downturn. But critics said too much assistance went to big corporations and not enough to ordinary Americans and small businesses. Last week, Federal Reserve chairman Jerome Powell stressed the high risk that countless small businesses could go bust in the absence of new federal aid.

AFP