Deal reached in Senate on unemployment assistance

By David Lerman
CQ-Roll Call/TNS
Sen. John Cornyn, R-Texas, talks with Sen. Joe Manchin, D-W.Va., while walking to the U.S. Senate chamber for a vote March 5, 2021 in Washington, D.C. The Senate continues to debate the latest COVID-19 relief bill.

WASHINGTON - A standoff over unemployment benefits that derailed movement on the Senate's $1.9 trillion coronavirus aid package for most of the day ended after Majority Leader Charles E. Schumer hammered out a deal with moderate holdout Joe Manchin III, D-W.Va.

The agreement would extend the $300 weekly federal unemployment insurance supplement through Sept. 6, about a month shy of a previously proposed compromise worked out with the White House and moderate Democrats. The pact would preserve an earlier provision making the first $10,200 in unemployment benefits tax-free, but that benefit wouldn't apply to households earning more than $150,000.

Manchin's been pushing for jobless benefits to be smaller, and end sooner, than many other Democrats because of concerns employers in his state won't be able to hire enough workers as the businesses start to reopen, particularly after vaccines are distributed this spring.

In a statement, Manchin said the agreement "enables the economy to rebound quickly while also protecting those receiving unemployment benefits from being hit with (an) unexpected tax bill next year."

To offset some of the added cost, the compromise amendment would extend a limit on losses some business owners can claim against other income for an extra year, through 2026. The excess loss limit was imposed as part of Republicans' 2017 tax overhaul, to help pay for a new small-business tax deduction.

Earlier in the day, Manchin seemed to catch Democrats by surprise when he wouldn't back the earlier unemployment proposal, offered by Thomas R. Carper, D-Del., which would have extended the $300 jobless benefits through Oct. 4, with no income cap on the unemployment tax benefit.

That led Democrats to hold the first vote of the day open by eight hours, approaching the modern record of more than 10 hours, as negotiations ensued. The catalyst for the standoff was a competing proposal from Rob Portman, R-Ohio, which would have shortened the length of the unemployment benefits extension to July 18.

The current $300 weekly benefit lapses on March 14, which is the Democrats' self-imposed deadline for getting a bill to President Joe Biden's desk.

The House-passed bill would renew the benefits through Aug. 29, but boost them to $400 a week.

Before the announcement, Democrats expressed confidence the dispute would be worked out and the chamber's "vote-a-rama" would resume and run at least into Saturday morning.

"Be prepared for an all-nighter," Debbie Stabenow, D-Mich., told reporters. "We're hammering out a couple of things," she added, likening the process to "sausage-making."

Sherrod Brown, D-Ohio, expressed support for the package even if unemployment benefits were scaled back. Brown cited the entirety of the package, including things like emergency rental assistance, expanded tax credits for low-income households and money for schools as reasons to support it.

"I think people recognize this is a big, big deal," Brown said. "This bill is extraordinary what we're able to do, and if some things change at the margins, they change at the margins."

Republicans earlier appeared to delight in the Democrats’ struggle to hold their caucus together. At a news conference and in interviews, GOP senators pointed to the challenge of trying to pass a mammoth aid package on a party-line vote in a 50-50 Senate.

“That’s why reconciliation is a bad idea,” Portman said, referring to the procedure that allows Democrats to skirt a GOP filibuster with a simple majority vote. “They should have worked with us.”

The longest Senate vote on record - on whether to bar U.S. strikes on Iran without congressional authorization - lasted 10 hours and 8 minutes in June 2019. Friday’s first vote promised to come close to that.

Budget Chairman Bernie Sanders, I-Vt., offered an amendment to add back the minimum wage increase Democrats were forced to drop because the parliamentarian determined it wouldn't comply with budget reconciliation rules. The Budget panel's ranking member, Lindsey Graham, R-S.C., raised a point of order, creating a 60-vote hurdle for Sanders' amendment.

The vote was stuck at 42-58, with virtually no chance for Sanders' amendment to overcome the point of order. But the vote was held open for more than eight hours as lawmakers tried to resolve the unemployment benefits dispute.

Hundreds of amendments were still in the queue, however, and it was uncertain when senators would run out of steam and move to final passage.