Jared Bernstein, an economic adviser to US President Joe Biden, said the Labour Department’s report on the unemployed underscores the urgency of the coronavirus relief plan pushed by the Democrat. The report showed that the overall number of citizens receiving unemployment benefit rose to 18.2 million at the end of January. Bernstein said that the data illustrates the cost of inaction.
Bernstein previously said the relief plan proposed by Biden will hasten the recovery of US economy, which was devastated by the pandemic. The adviser also indicated that the Democrat is willing to discuss points outlined in the package.
"The president is willing to exchange information and ideas in any way that accomplishes the goals he set out for this package. Not moving quickly, and not moving with the force to finally put this virus behind us and launch this recovery: That’s the part that’s not acceptable to him", Bernstein said.
Bernstein's statement came as the Congressional Budget Office (CFO) released a dire forecast, which showed that 7 million Americans will still be unemployed in 2021. The forecast, however, revealed positive changes as the unemployment rate is expected to drop this year to 5.7 percent, a significant improvement from a July report, which predicted that unemployment in 2021 will stand 8.4 percent. At the same time CFO's forecast showed that the United States is expected to return to pre-pandemic levels of employment only after 2024.
Treasury Secretary Janet Yellen also urged legislators to act to approve Biden's relief plan.
"The benefits of acting now – and acting big – will far outweigh the costs over the long term", she said.
Among other things the rescue package proposed by the Joe Biden includes:
- $400-a-week unemployment insurance benefit;
- Direct payments worth $1,400 to most households. These will be sent in addition to the $600 payments approved by Donald Trump;
- $70 billion on coronavirus testing and vaccine distribution;
- $350 billion aid to states and cities;
- A rise in the minimum wage to $15 an hour.
Republicans, however, oppose Biden’s plan. They put forward an alternative rescue package worth $618 billion. It includes $1000 in direct payments and no aid for states and cities. The president described it as insufficient. He held talks with several Republicans and indicated he is open to suggestions.
What Will Happen Next?
There are two options – either Joe Biden manages to persuade Republicans to back his plan in return for some concessions in it, or it will be approved without the GOP support, a move favoured by many Democrats.
The second option involves procedure called budget reconciliation, which speeds up the passage of legislation on spending, revenue and the federal debt limit. Normally to approve a bill the Senate needs a 60-vote super-majority, but reconciliation allows legislation to be passed with a simple majority.