President Joe Biden has called on states and local authorities in the US to offer residents $100 (£71) to get vaccinated against COVID-19.
State and local governments will be able to access a $350bn (£250bn) coronavirus aid fund to pay for the incentives, the US Treasury has promised.
Federal workers and onsite contractors will also have to prove they are vaccinated, or else wear face masks, be socially distanced, and do regular testing.
Military personnel will have the COVID-19 vaccination added to the jabs they are already required to have.
Mr Biden said he wanted America’s four million federal employees to set an example to private employers and other citizens.
COVID-19 cases are rising rapidly in the US, fuelled by the highly-transmissible Delta variant, which is particularly dangerous for those who have not been vaccinated.
Mr Biden aimed to have 70% of adults at least partially vaccinated by 4 July, but the latest figure shows 69.3% are partially vaccinated and about 60% are fully vaccinated.
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“It’s a pandemic of the unvaccinated,” Mr Biden said in a White House address on Thursday.
“People are dying who don’t have to die.”
Lawrence Gostin, a professor of global health law at Georgetown University Law School, was optimistic that Mr Biden’s plan could work.
“People would much rather roll up their sleeves and get a jab, than undergo weekly testing and universal masking,” he said.
“In many ways, this is really not a mandate, it’s giving workers a choice.”
Mr Biden wants private businesses to follow his lead by imposing burdens for those who are not vaccinated.
Some larger businesses are already there: Facebook and Google have announced employees will have to prove they have been vaccinated before returning to work.
Airlines Delta and United are requiring new employees to show proof of vaccination, and finance firms Goldman Sachs and Morgan Stanley want workers to disclose their vaccination status but have stopped short of requiring them to be inoculated.
Jeff Hyman, a Chicago-based business author and recruiter for start-up companies, said: “I think we’ve reached this tipping point, and Mr Biden’s announcement will provide a lot of air cover for companies and boards of directors who have difficult decisions facing them.”
The White House is no longer gently encouraging vaccinations – analysis by Martha Kelner, US correspondent
We are at a pivotal point in the pandemic in the US with the Delta variant taking a firm grip and sending hospitalisations soaring in certain areas, prompting this urgent intervention from President Biden.
This was an address to the nation from the president, but aimed specifically at the unvaccinated, to whom he implored: “You don’t have to die”.
The take-up of the vaccine is divided along political and geographical lines, with just 34% of people in Alabama fully vaccinated, compared with 68% of people in Vermont.
Until now, the Biden administration had been content to allow corporate America to take the lead on mandatory vaccination and many Silicon Valley companies, like Facebook and Google, have banned employees from the office unless they get vaccinated.
Other companies have said employees can either get the vaccine or they will get fired.
But the dramatic rise in hospitalisations in the last few weeks has led to a shift in policy from the White House, which is no longer gently encouraging vaccinations but taking a significant step towards a firm order.
But the plan will not go through without opposition.
More than 100 bills have been introduced at state level banning employers from requiring vaccination and at least six states have approved these bills.
Some unions are also against the idea.
Brian Rothenberg, spokesman for United Auto Workers, said the union supported the vaccine but was against requiring people to have it.
Larry Cosme, president of the Federal Law Enforcement Officers Association, had a similar view, saying: “Forcing people to undertake a medical procedure is not the American way and is a clear civil rights violation no matter how proponents may seek to justify it.”
The Justice Department has said federal laws take precedence and none of those forbid employers from requiring vaccinations.