US Democrats were on track Saturday for a final vote on President Joe Biden's massive Covid-19 relief package after agreeing to scale back unemployment benefits, with passage increasingly likely in the evenly divided Senate.

With the sun rising in Washington, bleary-eyed senators continued their all-night session voting on nearly two dozen amendments and counting as they hammered out the $1.9 trillion stimulus bill, which Biden insists will revive the pandemic-hit US economy.

Negotiations in the Senate had frozen the chamber's action for more than 10 hours Friday, before the Democrats reached a compromise with moderate Senator Joe Manchin, who had balked at the scale of the benefits.

Despite an improvement in the employment situation in February, the United States remains 9.5 million jobs short of where it was before the Covid-19 pandemic began
Despite an improvement in the employment situation in February, the United States remains 9.5 million jobs short of where it was before the Covid-19 pandemic began AFP / Patrick T. FALLON

"This agreement allows us to move forward on the urgently needed American Rescue Plan," White House spokeswoman Jen Psaki said.

Republicans have stood uniformly opposed to the giant package, but Democrats -- who cannot afford to lose a single vote -- united to beat back repeated efforts to derail the legislation.

The action came against a backdrop of strong US economic data signaling that the world's largest economy may finally be healing.

Yet the economy was still short 9.5 million jobs compared with February 2020, before the pandemic began.

The data did little to change the dynamic in the Senate, where Majority Leader Chuck Schumer pressed for passage of President Joe Biden's stimulus plan
The data did little to change the dynamic in the Senate, where Majority Leader Chuck Schumer pressed for passage of President Joe Biden's stimulus plan AFP / Brendan Smialowski

Biden's economic advisers said the current pace of job gains meant it would take two years to recover to pre-virus levels.

"We can't go one step forward and two steps backward," Biden said Friday at the White House. "The rescue plan is absolutely essential to turning this around."

But the whole bill came under threat by an impasse over the amount and duration of supplemental unemployment insurance benefits for people left jobless during the pandemic.

Democrats had struggled to keep Manchin's support for expanded unemployment aid in the measure. Ultimately he agreed to a compromise that reduced jobless benefits from $400 to $300 and extended them to September 6, rather than through October as many Democrats had wanted.

Federal Reserve Chair Jerome Powell has warned the US job market faces a lengthy recovery from the pandemic, and won't see maximum employment in 2021
Federal Reserve Chair Jerome Powell has warned the US job market faces a lengthy recovery from the pandemic, and won't see maximum employment in 2021 AFP / Eric BARADAT

"We have reached a compromise that enables the economy to rebound quickly while also protecting those receiving unemployment benefits" from being hit with unexpected tax bills, Manchin said in a statement. The amendment passed 50-49 along party lines.

An effort to include a national minimum wage hike to $15 an hour -- a Biden priority -- failed, however.

US Senator Joe Manchin, the most conservative Democrat in the chamber, threatened to sink a jobless benefits element of the Covid rescue plan over its high cost, but agreed to a compromise
US Senator Joe Manchin, the most conservative Democrat in the chamber, threatened to sink a jobless benefits element of the Covid rescue plan over its high cost, but agreed to a compromise GETTY IMAGES NORTH AMERICA / WIN MCNAMEE

Biden's proposal would be the third major stimulus package to help the economy weather the coronavirus crisis.

Republican opponents have argued the latest plan is excessive, since the economy has already started to recover.

But with the Manchin hurdle overcome, Democratic unity could see the measure across the finish line.

It first needed to advance beyond the endurance test known as a "vote-a-rama", in which several amendments and motions were being voted on in rapid-fire succession in the Senate.

Republicans moved to adjourn but Democrats, perhaps eager to wear down their opponents, hung together and voted down the motion so they could plow ahead.

"Make no mistake: we are going to continue working until we get the job done," Democratic majority leader Chuck Schumer said.

The Senate is deadlocked 50-50. In the event of a tie Vice President Kamala Harris would cast the deciding vote.

But Harris's tie-breaker has not been needed, as a Republican senator went home Friday on a family emergency and could not vote.

A limp bipartisan cheer rose up Saturday when an amendment addressing veterans' protections earned unanimous approval.

But otherwise the posture was adversarial, with Republicans offering multiple amendments which forced rival Democrats into casting politically fraught votes.

Republican minority leader Mitch McConnell decried the bill as "a parade of left-wing projects" and said "our country's already set for a roaring recovery."

With debate raging over the stimulus plan, February saw better-than-expected hiring as pandemic-battered businesses began recruiting again.

Payrolls jumped by 379,000 last month, almost double expectations, and pushed the unemployment rate down slightly to 6.2 percent, the Labor Department reported.

Most of the gains were in the leisure and hospitality sector, which was devastated in the pandemic's early months.

US unemployment was at a record low before the pandemic began but spiked to 14.7 percent last April after Covid restrictions were imposed.

Joblessness has since declined, but at an increasingly slow pace.

Coronavirus