Congress Strikes Long-Sought Stimulus Deal to Provide $900 Billion in Aid

Democrats and Republicans said they had an agreement on another round of pandemic aid, including direct payments to Americans, jobless benefits and funds for businesses and vaccine distribution.

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Senator Mitch McConnell, the majority leader, said on Sunday evening the stimulus package would include direct payments for Americans.CreditCredit...Stefani Reynolds for The New York Times
Emily Cochrane

WASHINGTON — Congressional leaders on Sunday reached a hard-fought agreement on a $900 billion stimulus package that would send immediate aid to Americans and businesses to help them cope with the economic devastation of the pandemic and fund the distribution of vaccines.

The deal would deliver the first significant infusion of federal dollars into the economy since April, as negotiators broke through months of partisan gridlock that had scuttled earlier talks, leaving millions of Americans and businesses without federal help as the pandemic raged. While the plan is roughly half the size of the $2.2 trillion stimulus law enacted in March, it is one of the largest relief packages in modern history.

“We can finally report what our nation has needed to hear for a very long time,” Senator Mitch McConnell, Republican of Kentucky and the majority leader, said Sunday night. “More help is on the way.”

It was expected to be merged with a sweeping catchall spending measure that would keep the government funded for the remainder of the fiscal year, creating a $2.3 trillion behemoth whose passage will be Congress’s last substantive legislative achievement before adjourning for the year. The deal came together after a weekend of frenzied negotiating only hours before the government was set to run out of funding and two weeks before the next Congress was to convene on Jan. 3.

Still, even as it prepared to pass a consequential measure, Congress was at the peak of its dysfunction, having left so little time to complete it that lawmakers faced a series of contortions to get it across the finish line. With additional time needed to transform their agreement into legislative text, both chambers had to approve a one-day stopgap spending bill — their third such temporary extension the past 10 days — to avoid a government shutdown while they were finalizing the deal.

The House was expected to do so on Sunday night, and the Senate was expected to follow suit. Final votes on the spending package were expected on Monday to approve it and clear it for President Trump’s signature, but had yet to be scheduled.

Although text was not immediately available, the agreement was expected to provide $600 stimulus payments to millions of American adults earning up to $75,000 . It would revive lapsed supplemental federal unemployment benefits at $300 a week for 11 weeks — setting both at half the amount provided by the original stimulus law.

It would also continue and expand benefits for gig workers and freelancers, and it would extend federal payments for people whose regular benefits have expired.

The measure would also provide more than $284 billion for businesses and revive the Paycheck Protection Program, a popular federal loan program for small businesses that lapsed over the summer. It would expand eligibility under the program for nonprofits, local newspapers and radio and TV broadcasters and allocate $15 billion for performance venues, independent movie theaters and other cultural institutions devastated by the restrictions imposed to stop the spread of the coronavirus.

The agreement is also expected to provide billions of dollars for testing, tracing and vaccine distribution, as well as $82 billion for colleges and schools, $13 billion in increased nutrition assistance, $7 billion for broadband access and $25 billion in rental assistance. The agreement is also expected to extend an eviction moratorium set to expire at the end of the year.

We have now reached agreement on a bill that will crush the virus and put money in the pockets of working families who are struggling,” Speaker Nancy Pelosi wrote to Democrats on Sunday in a letter outlining some of the details of the measure. “This emergency relief bill is an important initial step.”

While Mr. Trump’s signature will be on the law, its effect will be far more significant for President-elect Joseph R. Biden Jr., who faces the task of shepherding the shaky economic recovery. Mr. Biden, who quietly pushed for lawmakers to strike a compromise that would deliver at least some modest help after months of congressional inaction, has said the package is nowhere near large enough to meet the nation’s needs, and is expected to seek yet another major economic relief package after taking office in January.

Economists had warned that a stimulus measure of the size under discussion on Capitol Hill would fall short of the level of assistance needed to support the economic recovery, though the bill eclipsed the roughly $800 billion stimulus package that Congress approved in 2009 to counter the Great Recession. Democrats, having ceded demands for another multitrillion-dollar package, were already calling on Mr. Biden to act quickly on a much larger relief plan.

“Once this deal is signed into law, it cannot be the final word on congressional relief,” said Senator Chuck Schumer of New York, the Democratic leader, who referred to the agreement as a “down payment.”

With Republicans bent on keeping the cost of any relief under $1 trillion, negotiators scaled back the aid substantially from the stimulus measure enacted in March, when the ruinous toll of the pandemic was just becoming clear.

As congressional leaders clashed over their competing priorities for another round of aid, coronavirus cases surged, millions of Americans slipped into poverty and countless businesses, restaurants and performance venues shuttered as their revenues evaporated amid the pandemic.

“There is no doubt this new agreement contains input from our Democratic colleagues — it is bipartisan,” said Mr. McConnell, who refused for months to act on a stimulus package, saying that Congress should pause and consider the deficit before providing more relief. “But these matters could have been settled long ago.”

Emboldened in the aftermath of the November election, a bipartisan group of moderates brokered their own $748 billion compromise, pressuring congressional leaders to redouble their efforts to find a deal. Ultimately, the top two Democrats and top two Republicans on Capitol Hill, huddling with their staff and at times Steven Mnuchin, the Treasury secretary, wrangled the final agreement over a few chaotic days the week before Christmas.

The deal was far narrower than the one Democrats had long insisted upon, and nearly twice the size of the one Republicans had said they could ever accept in the days leading up to the November election. At the core of the breakthrough was a mutual agreement to drop critical priorities championed by one party and loathed by the other: a Democratic push to establish a direct stream of funds for cash-strapped state and local governments, and a Republican demand for sweeping liability protections for businesses, hospitals and other institutions open during the pandemic.

But it nearly fell apart as Democrats sought additional avenues to provide relief to state and local governments suffering significant revenue shortages, and as Republicans fought to limit the power of the Federal Reserve to provide credit to municipalities, businesses or other institutions, as it has done this year through an array of emergency lending programs intended to stabilize the economy during the pandemic in times of crisis.

Senator Patrick J. Toomey, Republican of Pennsylvania, mounted a last-minute push to ensure that those programs would end and prevent the Fed and Treasury Department from setting up any similar one in the future. Democrats balked, arguing that the move would deprive the Fed of critical tools for bolstering the economy, and tie Mr. Biden’s hands as he confronts a daunting public health and economic crisis.

Shortly before midnight Saturday, in talks with Mr. Schumer, Mr. Toomey agreed to narrow his language considerably, to a provision that would bar only emergency lending programs that were more or less exact copycats of the ones newly employed in 2020. Democrats also secured an extension for state and local governments to spend money allocated under the March stimulus law, ahead of a Dec. 31 deadline.

The agreement also reflected a last-ditch effort by progressive Democrats, who found unlikely allies in both Mr. Trump and Senator Josh Hawley, Republican of Missouri, to secure a more robust round of direct payments. Hours before lawmakers announced a final agreement, the president, who had been remarkably absent from the talks, exhorted Congress to reach a deal and called for “more direct payments.”

The foundation of the package unveiled Sunday mirrors the core of the March stimulus law, as lawmakers sought to continue programs that proved to be critical lifelines for millions of struggling Americans and businesses and address concerns that have emerged over recent months.

Without congressional action, as many as 12 million Americans were set to lose access to expanded and extended unemployment benefits set to expire after Christmas. A number of other critical relief provisions, including an eviction moratorium, were set to expire on Dec. 31.

Confronted with widespread Republican reluctance to another round of federal spending, lawmakers curtailed a number of the benefits. Dependents who are 17 and older will not be eligible for the $600 direct payments, although lawmakers agreed to provide direct checks to people who filed jointly with a person who uses an Individual Taxpayer Identification Number instead of a Social Security number, according to one person familiar with the emerging agreement. The last round of $1,200 stimulus payments prohibited that, blocking the estimated 1.2 million American citizens married to undocumented immigrants from receiving them.

While lawmakers agreed to extend multiple unemployment programs into spring, Republicans insisted that the benefits be gradually phased out by early April. Democrats had hoped for a hard end date for the jobless programs to pressure negotiators back to the table in early spring before they expired.

The relief package was to be paired with a $1.4 trillion catchall government spending bill. Included are the 12 annual appropriation bills to fund every federal department and social safety net programs, as well as an array of legislative add-ons lawmakers attached to ensure their priorities could be enacted before Congress adjourns for the year.

For a Congress that has been gripped by legislative paralysis in recent years, the spending measure includes a remarkable array of major policy initiatives, according to Ms. Pelosi and Mr. Schumer. It contains a ban on surprise medical bills that happen when patients unexpectedly receive care from an out-of-network health provider. Instead of sending those charges to patients, hospitals and doctors will now need to work with health insurers to settle the bills. Lawmakers have spent two years drafting the agreement, which received widespread bipartisan support but faced significant opposition from doctor and hospital groups.

Democrats secured significant college affordability provisions, such as a significant expansion of the federal Pell grant program for low-income students and reversing a decades-old ban on extending the grants to prisoners pursuing degrees behind bars.

The spending package also includes significant bipartisan deals to counter climate change and promote clean energy, the first such legislation to pass Congress in nearly a decade. Among the provisions is legislation that would cut the use of powerful planet-warming chemicals used in air-conditioners and refrigerators, and amount to a rare Republican rebuke to Mr. Trump on the issue of global warming.

Reporting was contributed by Nicholas Fandos, Luke Broadwater, Catie Edmondson, Jeanna Smialek, Erica L. Green, Coral Davenport and Sarah Kliff.