After the release of disappointing January jobs data this Friday (February 5), President Joe Biden defended his $1.9 trillion Covid relief package, urging Congress to pass it.
“We saw the jobs report. Only 6,000 private sector jobs will be created. And at that rate, it’s going to take 10 years before we get to full employment. That’s not hyperbole,” Biden said.
And he was clear about his intentions: “(It’s) my preference to work together, but if I had to choose between getting help right now to Americans who are hurting so badly and getting bogged down in a lengthy negotiation, or compromising on a bill that’s up to the crisis, it’s an easy choice. I’m going to help the American people hurting now.”
A group of Republicans presented a counteroffer on Monday (February 1st) with a much smaller tag-price of $618 billion. Their proposal still includes a stimulus check for workers, but it’s $1,000 per person, rather than the $1,400 in the Democrats’ bill.
And fewer people would get it – only those who earn up to $40,000 a year, while Biden’s proposal is for those who earn up to $75,000 a year.
Plus, the $300 per week federal unemployment benefits would be extended only through the end of June, while Biden’s plan would be until September. Biden’s proposal also increased it to $400.
Early Friday morning, the Senate passed a budget resolution that sets the path for the stimulus approval, allowing Democrats to pass the stimulus without Republican support in the chamber.
As expected, Vice-President Kamala Harris cast her first tie-breaking vote, after the 50-50 result in the divided Senate.
In the afternoon, the House, controlled by Democrats, also approved the budget bill by 219-209 votes.
Now, Democrats will discuss the aid package in detail, also defining who will get the direct payments.
In his speech Friday morning at the White House, Biden also tackled Larry Summers critique about the Democrats’ plan.
Summers, the former director of the National Economic Council during the Obama administration, wrote in a Washington Post column published the day before that the plan is admirably ambitious. Still, it brings some risks, too, since it could impact financial stability and the value of the dollar, leading to unprecedented inflationary pressure.
“It’s not just the macroeconomic impact on our economy and our ability to compete internationally. It’s people’s lives. Real, live people are hurting and we can fix it,” Biden said.
The jobs report showed that only 49,000 jobs were added in January – the total employment in the country is still 10 million lower than the pre-pandemic levels.
Despite that, the unemployment rate fell to 6.3% from 6.7%. But it’s not exactly good news since the reduction is a consequence of fewer people in the labor force, more exactly 406,000 fewer, according to government data.
The higher unemployment rate during the pandemic was reached in April, at 14.8%. It was the highest on record, not seen since data collection started in 1948.
With the weak jobs report boosting the hopes for a more significant stimulus, the U.S. stocks post the best weekly gains since early November, following the elections.
The S&P 500 rose for the fifth consecutive session, closing the week by 4.7% up. The blue-chip Dow gained 3.9% in five days, while the Nasdaq Composite rose 6%, posting its record closing highs for a second day.
On Friday’s session, the S&P rose 0,4%, the Dow added 0.3%, and the Nasdaq Composite gained 0.6%.