Trump signs pandemic aid and spending bill, averting US government shutdown

Palm Beach

US President Donald Trump on Sunday signed into law a US$2.3 trillion pandemic aid and spending package, restoring unemployment benefits to millions of Americans and averting a federal government shutdown in a crisis of his own making.

Mr Trump, who leaves office on Jan 20 after losing November's election to President-elect Joe Biden, backed down from his earlier threat to block the bill, which was approved by Congress last week, after he came under intense pressure from lawmakers on both sides.

The Republican president, who golfed on Sunday and remained out of public view even as the government crisis loomed, had demanded that Congress change the bill to increase the size of stimulus cheques for struggling Americans to US$2,000 from US$600 and also cut some other spending.

It was not immediately clear why Mr Trump, who has refused to concede defeat to Mr Biden, changed his mind on the stimulus package. His resistance had threatened to inject further chaos into the final stretch of his presidency.

After signing the bill behind closed doors at his beachside club, Mr Trump sought to put the best face on his climb-down, saying he was signing the bill with "a strong message that makes clear to Congress that wasteful items need to be removed". "Much more money is coming," he insisted in a statement, though he provided nothing to back this promise.

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And with less than a month left in office, Mr Trump is expected to gain little or no traction with lawmakers to make changes.

White House officials have been tight-lipped about Mr Trump's thinking but a source familiar with the situation said some advisers had urged him to relent because they did not see the point of refusing.

Democrats have long been on board with the US$2,000 payments but many Republicans have opposed it, making it unlikely that the figure will be revised upwards while President Trump is in office.

Many economists agree that the financial aid in the bill should be higher to get the economy moving again but say that immediate support for Americans hit by Covid-19 lockdowns is still urgently needed.

Unemployment benefits being paid out to about 14 million people through pandemic programmes lapsed on Saturday, but will be restarted now that Mr Trump has signed the bill.

The package includes US$1.4 trillion in spending to fund government agencies. If he had not signed the legislation, then a partial government shutdown would have begun on Tuesday that would have put millions of government workers' incomes at risk.

Americans are living through a bitter holiday season amid a pandemic that has killed nearly 330,000 people in the US, with a daily death toll now repeatedly well over 3,000 people, the highest since the pandemic began.

The relief package also extends a moratorium on evictions that was due to expire on Dec 31, refreshes support for small business payrolls, provides funding to help schools re-open and aid for the transport industry and vaccine distribution.

Global share prices ticked up in response to the news that Mr Trump had signed the stimulus plan and backed away from a government spending crisis.

US S&P futures and Japan's Nikkei index gained around 0.4 per cent, and spot gold prices rose nearly one per cent.

"It is positive for markets that we no longer have a chaos over stimulus, considering there was a chance of a partial government shutdown," said Masahiro Ichikawa, chief strategist at Sumitomo Mitsui DS Asset Management.

Mr Trump's abrupt move to sign the bill came after most Republican lawmakers refused to back his call for changes to legislation they had already voted on.

Hours earlier, Republican Senator Pat Toomey of Pennsylvania told Fox News Sunday that Mr Trump wants "to be remembered for advocating for big cheques, but the danger is he'll be remembered for chaos and misery and erratic behaviour if he allows this to expire". Republican officials were relieved that Mr Trump had backed away from his veiled veto threat, saying that it should help Republican Senate candidates David Perdue and Kelly Loeffler in Jan 5 Georgia runoff elections that will determine control of the US Senate.

Mr Trump noted that the Democratic-controlled House of Representatives planned to vote on Monday to increase novel coronavirus relief cheques to individuals from US$600 to US$2,000, and said the Senate "will start the process" to approve higher payments.

US Senate Majority Leader Mitch McConnell, a fellow Republican, said "I thank the President for signing this relief into law" but made no mention of any plans for a Senate vote.

Democratic House Speaker Nancy Pelosi welcomed Mr Trump's signing as a "down payment on what is needed", saying: "Now, the President must immediately call on Congressional Republicans to end their obstruction and to join him and Democrats in support of our stand-alone legislation to increase direct payment cheques to US$2,000." After months of wrangling, Republicans and Democrats agreed to the package last weekend, with the support of the White House. REUTERS