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The last-minute federal unemployment insurance compromise, briefly explained

Sen. Joe Manchin singlehandedly pared back federal unemployment benefits in the new Covid-19 relief package.

Sen. Joe Manchin (D-WV) questions Interior Secretary nominee Debra Haaland during her confirmation hearing before the Senate Committee on Energy and Natural Resources on February 24.
Leigh Vogel/Getty Images

Early on Saturday morning, the Senate approved a modified Democratic unemployment insurance plan by a narrow, party-line vote, paring back benefits included in a still-in-the-works Covid-19 relief package that are aimed at helping the millions of Americans currently out of a job.

Under the new plan, expanded federal unemployment benefits, which supplement state unemployment payments and are set to expire in mid-March — would be renewed at $300 per week through the first week of September. The first $10,200 of benefits will also be non-taxable for households under a $150,000 income threshold.

That’s less than the $400 per week President Joe Biden called for in his initial $1.9 trillion American Rescue Plan earlier this year — but it’s what he was able to get with a fragile 50-vote Senate majority at the mercy of Sen. Joe Manchin (D-WV).

Manchin, among the most conservative Democrats in the Senate, ground progress in the chamber to a halt for nearly 12 hours on Friday in a successful push to reduce the total cost of the package over concerns that giving people too much in unemployment insurance would discourage them from seeking new jobs and stunt economic growth.

Without Manchin’s support — and that of the other 49 members of the Democratic Senate caucus — the Covid-19 relief plan would almost certainly be dead in the water, giving Manchin and his moderate allies outsized power in negotiations with their colleagues and the White House.

That fact was on full display Friday, when Manchin was the lone holdout to a similar Democratic plan modeled on Biden’s proposal that would have set federal unemployment insurance at $300 per week, and kept unemployment benefits in place through the end of September.

Republicans, who have also argued that generous unemployment insurance would hobble economic growth, took full advantage of Manchin’s hesitation on Friday to lobby for an amendment of their own, which would have seen the $300 per week unemployment benefit expire in July rather than September.

Ultimately, Manchin signed on to both proposals, though only one will take effect.

The Republican amendment, introduced by Ohio Sen. Rob Portman, passed with support from Manchin, who also won concessions from Democrats on their proposal. Democrats agreed to shorten unemployment insurance by a few weeks, to a new end date of September 6, and barred those making $150,000 or more from getting a tax break on unemployment benefits.

With those changes in the Democratic proposal, Manchin backed it as well, and its passage overrode the Portman amendment, according to Politico.

The stimulus package has been plagued by questions over how much aid is necessary

The central conflict Friday — and throughout stimulus negotiations — was over how big Congress should go to provide relief to Americans affected by the pandemic, and to fund key priories like reopening schools and scaling up a mass vaccination campaign.

The bulk of the Democratic Party, including Biden and Senate Majority Leader Chuck Schumer, has coalesced behind a plan to go big on key Democratic priorities like stimulus checks and aid for state and local governments, but Republicans, who have mysteriously rediscovered their concerns about the deficit after losing power, remain unanimously opposed. A handful of moderate Senate Democrats, including Manchin, support the Democratic stimulus plan in principle, but are also leery of too much spending.

Despite overwhelming, bipartisan public support for the plan, the GOP has criticized the bill as “massively excessive.”

“The Administration’s $1.9 trillion #COVID19 plan adds to our national debt without creating benefit to our economy or helping people in need,” Utah Sen. Mitt Romney tweeted Thursday. “This isn’t monopoly money — these are real dollars that will be paid for by our children and grandchildren.”

For their part, moderate Democratic senators have succeeded in scaling back elements of the bill in recent days, including a Wednesday move to tighten eligibility for a new wave of $1,400 direct payments to Americans.

“This was sort of a loose group of senators who are basically still concerned about the deficit, concerned about expenditures, and trying to ensure if we’re going to be spending $1.9 trillion that it’s directed to the people who need the most,” Sen. Angus King (I-ME) said Friday.

That change, as well as the reduced unemployment benefits brokered in the Manchin compromise Friday, has frustrated more progressive Democrats.

“This trend is outrageous,” Rep. Bonnie Watson Coleman tweeted Friday. “What are we doing here? I’m frankly disgusted with some of my colleagues and question whether I can support this bill.”

However, the bill is still on track to be signed into law. With a marathon-length vote-a-rama winding down Saturday in the Senate after an overnight slog, the bill is expected to pass the chamber sometime this weekend before being volleyed back to the House for another vote approving the Senate changes. After that, it can head to Biden’s desk for a signature.

The Manchin compromise is a preview of Biden’s next two years

As grueling as this week’s last-minute bargaining to keep the Democratic caucus together on Covid-19 relief has been, it likely won’t be a one-off occurrence. With at least two years of a 50-50 Senate ahead of him, as well as a slim House majority, Biden will almost certainly have to wage the same intraparty battles again and again to keep his legislative agenda rolling.

Already, the White House has lost some of those battles: On Friday, eight Democratic senators, including Manchin, voted against an amendment to the stimulus package raising the minimum wage to $15 per hour.

The vote was something of a moot point, since the Senate parliamentarian ruled last month that a minimum wage increase couldn’t actually be passed through budget reconciliation, but it foreshadows difficult fights to come in the Senate.

Specifically, under current Senate rules, Democrats will need to win over Republican support for their priorities — such as sweeping voting rights and police reform bills that passed the House this week — to have any hope of passing them into law, and with some Republicans already signaling their opposition, that will be an uphill battle.

The filibuster imposes a 60-vote threshold on most legislation in the Senate, though the budget reconciliation process allows the majority to skirt that requirement on some priorities.

It’s possible for Democrats to get rid of the filibuster with their bare 50-vote majority, with Vice President Kamala Harris breaking the tie in her role as president of the Senate, but as with a minimum wage increase, moderate Democrats like Manchin and Arizona Sen. Kyrsten Sinema have all the power, and right now, they’ve said they’re against it.

It’s possible that could change — there’s increasing momentum on the Democratic side behind eliminating the filibuster — but even if it does, one part of the underlying dynamic will remain the same. As was the case on Friday, Manchin will likely remain the deciding vote — and continue to wield outsized power in the Senate.