On Monday, President-elect Joe Biden renewed hopes for further government support after urging lawmakers to “come together and pass a COVID-relief package.” With most original relief measures long-expired or nearing their end, the need to support millions of struggling Americans during the ongoing pandemic has grown more pressing.
According to CBS, several analysts predict Congress will stop their partisan disputes and approve a second stimulus package. However, the extent of the next bill — and when it happens — is still unclear. Senate Majority Leader Mitch McConnell recently expressed support for more relief, telling reporters on November 4 he would want a bill passed by the end of the year.
Still, if lawmakers manage to agree on another stimulus package during the current lame-duck session, it will be less extensive than the $2 trillion-plus measure pushed by Democrats, Wall Street analysts report.
In a note written by Brain Garnder, the chief Washington policy strategist at Stifel, McConnell “will likely re-propose a plan he pushed in October. The McConnell plan was for $500 billion and included additional Paycheck Protection Plan funds.”
Gardner noted that the GOP might pursue a smaller deal after news broke over Pfizer’s and Moderna’s COVID-19 vaccines, which showed to be 90% and 94.5% effective against the virus, respectively.
A coronavirus vaccine would encourage more hiring, leading to income growth, higher consumer spending, and lowering the necessity for a comprehensive stimulus package, several Republicans argued.
Experts note that a viable treatment would renew struggling areas of the economy, including the travel and hospitality sectors. While a vaccine would lessen the need for more assistance, it could be months before anything is widely available. In the meantime, millions of people and businesses would be left on their own.
Since the initial jump in late spring following the passage of the CARES Act in March, consumer spending and confidence have significantly deaccelerated. According to James Watson, an Oxford Economics senior US economist, the absence of more federal support has contributed to this decline, with retail sales coming to a “near halt” last month.
What About More Stimulus Checks?
The White House and Democrats are split on many details for the next bill, including the price tag and provisions. The House has pushed for more funding for local and state governments, which face significant budget deficits and renewing the $600 enhanced unemployment program.
The parties have agreed on the Paycheck Protection Program (PPP) and a second round of $1,200 stimulus checks. But even if lawmakers pass a bill before the end of the year, analysts warn Americans not to get too optimistic, as the checks likely won’t arrive until the beginning of 2021.
“We see our current baseline assumption of a roughly $750 billion fiscal package legislated by [the first quarter of 2021] as reasonable,” Deutsche Bank analysts wrote in a note on Friday research.
The possibility of another bill emerging after the lame-duck session depends if Democrats flip the Senate in January. If they fail, the Republicans will most likely bar any attempt from the House and Biden administration to pass a comprehensive stimulus package.
How Large Will The Next Stimulus Package Be?
The next bill’s cost has been one of the most significant points of contention between Democrats and Republicans. McConnell proposed a limited version in the Senate, which came to about $500 billion. The GOP measure falls far short of the $2.2 trillion legislation approved by the House last month and the White House’s $1.8 trillion deal.
Economists have voiced concerns that without more federal assistance, the US economy will continue to flounder in its recovery. Widespread layoffs continue, even among the country’s largest corporations — last month, airlines eliminated tens of thousands of jobs.
“Without faster job growth — unlikely at this stage of the recovery — or increased fiscal aid, households, businesses and state and local governments will be increasingly susceptible to a deterioration of the health situation,” Gregory Daco, chief U.S. economist at Oxford Economics, told CBS.
Like the first series of pandemic relief checks, those who earn $75,000 or less individually or $150,000 as a couple would qualify. More stimulus checks would be a valuable benefit for struggling Americans, but this single payment won’t suffice. Economists believe that other measures — like enhanced unemployment benefits — have been more useful in spurring economic recovery.
- Pichi, Aimee. “What’s the Status of a Second $1,200 Stimulus Check?” CBS News, CBS Interactive, 17 Nov. 2020, www.cbsnews.com/news/second-stimulus-check-status-update-2020-11-17/.