Less than a week before his inauguration, President Joe Biden announced a hefty coronavirus relief plan that he suggests Congress “move fast on” and includes support of COVID-19 reduction efforts and $1,400 stimulus checks.
Biden plans to ask Congress for $1.9 trillion to assist with vaccination and COVID-19 reduction efforts as well as economically assist individuals and small businesses. His plan requires $415 billion, specifically for vaccination, testing, tracing and sick leave, he told Americans during a news conference Jan. 14. He also would like to give Americans direct aid, via $1,400 stimulus checks and additional $400 payments to the unemployed, adding up to about $1 trillion. An additional $440 billion will assist small businesses, local government and transit.
Experts and analysts have chimed in on whether the stimulus checks and the bulk of the American Rescue Plan will be approved. Heights Securities analyst Hunter Hammond told CBS News the ultimate package will be trimmed to $1 trillion to $1.5 trillion. But most analysts think lawmakers on both sides of the aisle will support the $1,400 direct payments, which economists see as necessary aid for the millions of cash-strapped workers and unemployed Americans wading through the pandemic.
The package as a whole, which totals about $1.9 trillion, could be scaled down due to pushback from Republican lawmakers, so Hammond said he expects the compromise to be a package between $1 trillion and $1.5 trillion. Even with those changes, there’s still about an 85% chance the relief plan will be approved in the first three months of Biden’s administration with the stimulus checks intact, Hammond told the news outlet.
The support for that direct aid will likely be bipartisan due to the grim outlook for the labor market announced earlier this month. With 1 million jobless claims in the first week of January and climbing COVID-19 infection rates and deaths, analysts say lawmakers will see the financial support as mandatory, Ed Mills, an analyst with investment bank Raymond James, told CBS News.
“We believe there is support for a smaller package that includes the $1,400 checks, more health care funding, support for small businesses, and some state and local aid,” Mills said.
The timeline of moving the plan from proposal to actionable package is imperative to Biden’s team. Janet Yellen, Biden’s choice as Treasury secretary, said on Jan. 19 that the administration would focus on winning swift passage of the pandemic relief plan.
Even with that ambitious goal, it is hard to say when the bill would be passed and checks delivered. Alec Phillips, chief U.S. political economist with Goldman Sachs, predicts the package could be passed in mid-February to mid-March. That would consider the time to get Congress to pass the bill, the president to sign it and after that the process of the IRS distributing direct deposit, mailed and prepaid debit cards as payment.
In December, some received their second stimulus payments within a week of the bill passing. However, others waited a few more weeks or will have to address the payments in their taxes this year. Still, based on previous money payouts and assuming Congress passes a new relief bill by mid-February, the checks could arrive in bank accounts by late February. If the bill takes longer to pass, such as the end of March, payments may not arrive until April.
Any scenario will require at least 10 Republican senators to back the package, and some of those folks, including Sen. Pat Toomey of Pennsylvania, have already expressed concern about the president’s plan. Toomey and others have noted that doling out more checks might delay some Americans’ return to work. Toomey argues the stimulus should have more of an emphasis on supporting the vaccination rollout.
“Blasting out another $2 trillion in borrowed or printed money — when the ink on December’s $1 trillion aid bill is barely dry and much of the money is not yet spent — would be a colossal waste and economically harmful,” Toomey said in a statement.
Biden’s team surmises it may have to level with Republicans by reducing the total price tag of the relief package, which will likely start with trimming proposals including the $15 minimum wage and tax increases. However, analysts still foresee overwhelming support for the plan. The question that lingers is how much and when, Mills said.
“The market is back to an expectation that more fiscal stimulus is all but inevitable in the early days of the Biden administration, with the release of a $1.9 trillion ‘American Rescue Plan,’” Mills said in a report earlier this month. “While we anticipate that additional fiscal support remains likely, the timing and scope are very much in flux.”
The Associated Press contributed to this report.
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