$2,000 stimulus cheques stuck in US Senate after Mitch McConnell blocks Democrats’ bid

Senate majority leader may pair bigger stimulus cheques with other demands from President Trump

US Senate majority leader Mitch McConnell blocked an attempt by Democrats for quick action on increasing stimulus payments for people and households to $2,000, despite President Donald Trump’s demands for the change.

Mr McConnell objected to a motion by Senate minority leader Chuck Schumer to approve by unanimous consent a bill for the stimulus cheques, which passed the House on Monday.

He also blocked a motion by Senator Bernie Sanders for the Senate to vote on the cheques immediately after voting on overriding Mr Trump’s veto of a key defence policy bill.

It is now unlikely that the Senate will pass the bill to increase the payments before Congress adjourns on Sunday, when the newly elected legislature is sworn in.

Just before Mr Schumer made his motion, Mr McConnell said the Senate would consider higher cheques in conjunction with two of Mr Trump's demands unrelated to the pandemic relief bill he signed into law.

They are an investigation into alleged election fraud and reworking a law that protects technology companies from liability for user content.

“This week the Senate will begin a process to bring these three priorities into focus,” Mr McConnell said, without explaining when or if a vote would happen.

In a series of tweets on Tuesday, Mr Trump again demanded that the Senate increase the stimulus payments from $600.

Despite his support, spending $464 billion on higher stimulus cheques is not popular among Republicans who are increasingly focused on the burgeoning national debt.

Only 44 Republicans joined 231 Democrats on Monday to pass a bill increasing the payments to $2,000.

In the Senate, only a handful of Republicans are now publicly on board, including Florida’s Marco Rubio and Missouri’s Josh Hawley.

The tension comes at a crucial time for Republicans who are fighting to maintain control of the Senate in a pair of Georgia run-off elections on January 5.

On Tuesday, the GOP incumbents in those races, David Perdue and Kelly Loeffler, came out in favour of the $2,000 cheques.

Mr McConnell has several options to tackle the direct-payment conundrum in which Mr Trump has put him.

With the attempt by Mr Schumer blocked, Mr McConnell could say there is not agreement to process the House bill on the floor by the time the current session of Congress ends on January 3.

That approach could risk a backlash from Mr Trump and his supporters.

Mr McConnell could also promise to work on the matter in the next Congress, which starts next week.

Kicking the can down the road leaves Mr McConnell with another problem, with Mr Sanders saying he will delay any attempt to override Mr Trump’s veto of the defence bill this week unless there is a vote on the cheques.

Another option would be for Mr McConnell to present his own bill, combining higher cheques with the other two issues Mr Trump wants addressed.

But combining those elements into a package would poison a stimulus-cheques bill for many Democrats. It would probably fail if brought to a vote.

The Democrats are relishing the political turmoil for the Republicans and hoping it will give them a chance to flip the Senate to help enact president-elect Joe Biden’s far-reaching agenda.

“The House and the president are in agreement: we must deliver $2,000 cheques to American families struggling this holiday season,” Speaker Nancy Pelosi said in a tweet, calling on the Senate to pass the higher payments.

Although Mr Biden on Monday said he supported the higher payments, it is unclear if he will give them priority in his stimulus proposal to Congress after his January 20 inauguration if Congress fail to pass them.

The non-partisan committee for a responsible budget estimates that the bigger payments would raise disposable income in the first quarter to as much as 25 per cent above pre-pandemic levels.

The legislation would produce an additional 1.5 per cent in GDP output, but not all of the growth would occur in 2021, said Marc Goldwein, an economist who co-wrote the committee's projections.

But many Republicans opposed stimulus payments larger than the $600 in the existing law, in part over concerns about the cost.

Raising the payments to $2,000 would cost about $463.8bn, according to estimates by the staff of the joint committee on taxation.