Democrats Agree to Lower Unemployment Benefits as Part of Stimulus Bill Compromise

Senate Democrats reached a compromise Friday evening over unemployment benefits, as competing proposals held up the passage of President Joe Biden's coronavirus stimulus package.

The original American Rescue Act, as passed by the House, included $400 in additional weekly payments to unemployed people through August. Republican Ohio Senator Rob Portman countered with an offer of $300 payments through July 18. Democratic Senator Tom Carper of Delaware made a proposal offering the lower $300 payment, but extended the deadline through the end of September.

West Virginia Democrat Joe Manchin was blamed for the slowdown as he initially backed Portman's plan. But Manchin announced the compromise alongside a Democratic aide, according to the Associated Press. The new proposal is most similar to Carper's, but ends the payments on September 6, according to The Hill.

The new plan also includes a provision from Carper's proposal which will prevent up to $10,200 of the enhanced unemployment benefits from 2020 from being taxed.

"We have reached a compromise that enables the economy to rebound quickly while also protecting those receiving unemployment benefits from being hit with unexpected tax bill next year," Manchin said.

Biden has come out in favor of the compromise, according to White House Press Secretary Jen Psaki.

"The President supports the compromise agreement, and is grateful to all the Senators who worked so hard to reach this outcome. It extends supplemental unemployment benefit into September, and helps the vast majority of unemployment insurance recipients avoid unanticipated tax bills," Psaki said in a statement obtained by Newsweek.

"Most importantly, this agreement allows us to move forward on the urgently needed American Rescue Plan, with $1400 relief checks, funding we need to finish the vaccine rollout, open our schools, help those suffering from the pandemic, and more," she added.

Joe Manchin Unemployment Compromise
Sen. Joe Manchin, shown here at the February 24 hearing of Rep. Debra Haaland, (D-NM) President Joe Biden's nominee for Secretary of the Interior, announced Friday that the new Democratic proposal for unemployment benefits was $300 per week through early September. Leigh Vogel/Getty

The Senate is expected to vote on both the new Democratic proposal as well as Portman's version of the amendment, according to The Hill. Without Manchin's vote, however, it is assumed that the Portman proposal will not pass, even if all Republican senators vote for it. Normally, with the Senate split 50-50, Vice President Kamala Harris would cast the tie-breaking vote. However, Alaskan Republican Sen. Dan Sullivan had to leave the session early to attend the funeral of his father-in-law. Without Sullivan, Democrats have a 50-49 majority.

Manchin's hesitancy to vote for the original version of the bill stalled voting in the Senate for nine hours, according to the Associated Press. With the new compromise, voting on other proposals can now resume. The process is known as "vote-o-rama," where senators can propose amendments to the relief package, needing only a simple majority vote to be added.

On Friday, Sen. Bernie Sanders used this process to propose a $15 per hour minimum wage. This attempt failed after seven Democrats crossed party lines to vote against the amendment. The minimum wage increase was originally in the American Rescue Act, but Senate parliamentarian Elizabeth MacDonough ruled that it did not meet the requirements of the budget reconciliation process. This process allows a bill to be passed with a simple majority, but measures unrelated to the budget can not be included.

Vote-o-rama is expected to extend into early Saturday morning at the earliest. It's currently unknown when the final vote will occur. At that point, the final package will then return to the House to be approved.

Newsweek reached out to Senate Minority Leader Mitch McConnell for comment.