Between the White House, Senate, and House, things have not looked good for the likelihood of the next stimulus check.
But with Election Day finally over and the results still up in the air, there is a chance that lawmakers could be one step closer to approving more relief. Who wins the presidency and who takes the Senate are vital in determining the outcome — and timeline — of the next bill.
The Trump administration, Republicans, and Democrats have all expressed support for another round of pandemic stimulus checks. And, to an extent, the three parties have backed more financial assistance for small businesses and supplemental unemployment benefits.
However, the problem arises when talks over the price tag or where funding should go begin. For example, while the House has pushed for more funding for state and local governments, Republicans want a slimmed-down version.
Now that the American people have cast their vote, the fate of the next stimulus package may become more concrete. Fortune talked to the experts to determine the possibility of another relief bill and what it could mean for Americans.
Suppose Democratic nominee Joe Biden takes the presidency and the Democrats flip the Senate. In that case, there is a very good chance that they will approve an extensive stimulus bill similar to the CARES Act passed last March. However, Americans will still have to wait for any benefits until after the inauguration process in January.
Moody’s Analytics’ Mark Zandi told Fortune that if a blue wave does occur, he expects Democrats will vote on the next bill “soon after” Biden is sworn into the presidency. In a Monday note, he wrote that “lawmakers will quickly agree to spend close to another $2 trillion to shore up the economy.”
That’s larger than President Trump’s $1.8 trillion proposal but much less than the $2.2 trillion deal Democrats have pushed for. Still, a bill with this price tag would potentially offer state and local government aid, supplemental unemployment insurance, and money for nationwide testing and screening.
But, Zandi also expressed that Democrats could approve a second stimulus package before the summer. He told Fortune that this second bill could cost about $2 trillion and fund key initiatives to bring employment back to pre-pandemic levels.
Brian Rose, a senior economist at UBS Global Wealth Management, agreed. “If the Democrats win, they’ll get stimulus through, and not only that, they’ll get a big package,” he told Fortune. Rose noted that Democrats might have to concede on some terms or eliminate the filibuster rule if the GOP decides to “play hardball” and delay the vote until next year.
However, what if Biden is elected and Republicans keep their Senate seat? In this case, the next stimulus bill will probably be limited both in its price tag and scope.
Zandi said that if under a Biden presidency and split Congress, “there will be enough political will, given the struggling economy, for lawmakers to pass a $1.5 trillion deficit-financed rescue package by February.” Although, Zandi contended that the Senate would “forestall a larger package or any additional fiscal support after that.”
Similarly, Rose said that if Biden did have to fight the Senate to pass the next bill, there is a chance that “they can find enough votes to at least not have the stimulus package filibustered.” If more relief passes before the end of the year, lawmakers would need to call a vote during the lame-duck session.
Realistically, a generous stimulus package is not going to happen before the inauguration ceremony at the end of January. But if President Trump is re-elected, there is a possibility that his administration and the Senate will approve additional aid before January.
The drawback in this scenario is that the GOP will most likely not comply with the president’s $1.8 trillion proposal. And since the House has repeatedly said it will not budge on a stop-gap bill, this could narrow the chances of another stimulus passing.
Zandi believes that Congress would “likely agree to a deficit-financed support package next February, with Senate Republicans being the brake on a larger deal.” He added that if Trump wins the election, Americans could see more stimulus aid by the summer, but they would probably be in the form of tax cuts.
- Lambert, Lance, and Anne Sraders. “Stimulus Update: How the Election Will Shape the next COVID Aid Package.” Fortune, Fortune, 3 Nov. 2020, fortune.com/2020/11/03/second-stimulus-update-trump-biden-2020-election-covid-aid/.