[ad_1]
(CBS Detroit) — President Joe Biden announced the American Rescue Plan in the leadup to his inauguration. The $1.9 trillion stimulus package is designed to fight the spread of COVID, support struggling families and prop up small businesses and communities. A key part of the proposal is a $1,400 stimulus check for those who qualify. Now that Biden is president, he can move forward with his plans.
Where does another round of economic relief fall in the new president’s list of priorities? “I believe we have a moral obligation,” Biden said, in a speech outlining the plan. “In this pandemic in America, we cannot let people go hungry, we cannot let people get evicted, we cannot watch nurses, educators and others lose their jobs, we so badly need them. We must act now, and we must act decisively.”
>>READ: Stimulus Check Update: ‘I Believe We Have A Moral Obligation,’ Says President-Elect Joe Biden
The need for additional stimulus remains dire. The economy has slowed to a crawl as COVID cases continue to rise unchecked. Joblessness remains historically high, with 900,000 new claims submitted last week. That number is down only slightly from the 926,000 submitted the previous week and still well above pre-pandemic levels. An additional 426,000 filed for Pandemic Unemployment Assistance, which covers freelancers, who don’t qualify for traditional unemployment insurance. A total of almost 16 million people were collecting some form of government unemployment assistance as of early January.
The return of a healthy economy depends on arresting the spread of the virus that continues to limit many people’s ability to work and spend. Domestic cases are nearing 25 million, while deaths exceed 400,000. The vaccination effort continues along well behind schedule. Many states and localities have been forced to cut back on inoculations, as supplies dwindle. On Thursday, New York City temporarily closed some of its vaccine centers. Its mayor says that the city doesn’t have enough doses to make it through Friday. Similar scenarios are in danger of playing out across the country.
Experts are generally on the same page about additional stimulus. “Economists don’t always agree, but I think there is a consensus now,” said Janet Yellen, the president’s nominee for Treasury Secretary, during her confirmation hearing. “Without further action, we risk a longer, more painful recession now — and long-term scarring of the economy later.”
Additional debt could bring with it additional risks for the economy, like inflation. Further, if the government has to spend more of its tax revenue on interest, that’s less it can spend on other things. But these are longer-term problems.
>READ: Surging Stock Market Reflects ‘Very Bright Outlook’ For Economy, Finance Prof Says
“Neither the President-elect, nor I, propose this relief package without an appreciation for the country’s debt burden,” Yellen stressed. “But right now, with interest rates at historic lows, the smartest thing we can do is act big. In the long run, I believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time.”
Support for additional stimulus remains strong in the new administration. The House and Senate, now both controlled by Democrats, are also theoretically onboard. The House passed the $3 trillion HEROES Act back in May. And House Speaker Nancy Pelosi was negotiating with the former administration on a stimulus package in the neighborhood of $2 trillion in the runup to the election.
The Senate is now split 50-50, with any tie-breaking votes falling to Vice-President Kamala Harris. Republicans have repeatedly balked at a second stimulus package worth more than a trillion dollars since soon after the first stimulus package. And that was under a president from their own party. Their reluctance may only increase with a president from the opposing party. Given the Democrats’ slim majority, it would only take one defector to sink or force changes to the latest proposed package. Some experts predict a third stimulus package will end up worth somewhere between $1 billion and $1.5 billion.
The $1,400 stimulus check, however, seems to have broader bipartisan support. That support, as well as backing for the package as a whole, could grow as disparities between economic classes grow. The brunt of the pandemic’s economic blow has been borne by people in service sectors, whose jobs pay less and force them to work outside of the home. The labor market for those types of jobs remains soft, with travel down, restaurants limiting seating, consumers generally unwilling to shop in physical stores. People in the lower and middle class need this influx of cash to pay bills and day-to-day expenditures. And they need it sooner than later.
House Democrats are reportedly considering putting together a sort of “skinny” bill that includes a stimulus check and vaccine funding.
in @PunchbowlNews AM: House Dems are considering passing legislation next week w new vaccine money/direct payments — a chance to put some points on the board.
They now believe that COVID deal wont come together till March.
— Jake Sherman (@JakeSherman) January 20, 2021
The thinking is that a broader COVID relief bill may not be worked out until March. But a streamlined bill, like the CASH Act passed by the House in late December to increase the second stimulus check, could sail through Congress and be signed into law very quickly. That could mean another round of stimulus payments by the middle of February. That’s assuming the timing from the previous two checks holds.
>>READ: ‘Stimulus Checks Are The Least Important,’ When Drafting Aid Package, Says Economist
A larger bill would require some negotiation. The White House, after all, has referred to the $1.9 trillion price tag as “a starting point.” House Democrats are targeting late February or early March to pass the President’s economic relief package. But the amount of back forth between the two sides will certainly affect the timeline.
Any version of the bill would require 60 votes in the Senate to overcome a veto. Without a veto-proof majority, the Biden administration would have to resort to a process known as budget reconciliation. That would delay stimulus even longer, but allow the package to pass with just 51 votes. A skinny bill seems more likely than a broader bill to attract the 10 Republicans needed.
A third stimulus check in the coming months is likely given the political and economic landscape. The timing of that check, be it next month or further in the future, remains uncertain.
[ad_2]
Source link
