Second stimulus check: US coronavirus relief bill update

Second stimulus check: US coronavirus relief bill update
We take a look at the prospects of a covid-19 stimulus package both before President Donald Trump leaves office, and after President-elect Joe Biden is sworn in.
AS English
Update 11 November 2020 at 20:08
0
ERIN SCOTT REUTERS


As President-elect Joe Biden prepares to take over at the White House from outgoing President Donald Trump - who continues to refuse to concede defeat in the US election - we take a look at the prospects of a major coronavirus stimulus package being pushed through both before and after Biden’s January inauguration.
Stimulus talks between Democrats, White House have dragged on for months

Talks over a bipartisan relief bill have been deadlocked since July, with Democratic congressional leaders unable to agree a plan with White House chiefs.

The two sides do appear to agree on measures such as a second stimulus check of up to $1,200 for qualifying Americans, following on from the direct payment sent out as part of the CARES Act, a $2.2tn stimulus bill signed into law in late March.

But House Speaker Nancy Pelosi (D-Calif.) and US Treasury Secretary Steve Mnuchin have not been able to find enough middle ground on the overall size and scope of a bill - albeit they have got closer.

While Pelosi has dropped the $3.4tn overall spend proposed in the Democrats’ failed HEROES Act to $2.2tn, Mnuchin has raised the White House’s offer from the $1tn in the HEALS Act - a bill proposed by GOP senators in July - to $1.9tn.
GOP-controlled Senate in the way of major relief

However, reaching an agreement isn’t the only problem: a bill also has to make it through a Senate whose Republican majority has shown a reluctance to countenance another big stimulus spend, having blocked both the HEROES Act and the HEROES Act 2, a $2.2tn package passed by the Democrat-held House in October.

In the past couple of months, moreover, Republican senators have twice unsuccessfully tried to pass ‘skinny’ relief bills worth just $500bn. Neither included a second stimulus check.
Passing a stimulus package before Trump leaves office

Senate Majority Leader Mitch McConnell (R-Ky) is now said to be taking the lead on stimulus negotiations on the Republican side, and has declared that a deal needs to be done “before the end of the year”.

According to a Wall Street analyst quoted by CBS News, though, Americans should not expect a multi-trillion-dollar stimulus package between now and January, particularly in the wake of pharmaceutical giant Pfizer’s announcement that its coronavirus vaccine has a 90% effectiveness rate.

The prospect of potentially imminent mass vaccinations is likely to further encourage Republicans to argue that major government aid is not needed and to seek a smaller spend, says Brian Gardner, chief Washington policy strategist at Stifel.

Speaking on Tuesday, McConnell bore out this analysis, indicating GOP senators’ ongoing opposition to a significant outlay on stimulus. “We need to think about, if we’re going to come up with a bipartisan package here, about what size is appropriate,” he said.

“It seems to me that snag that hung us up for months is still there. I don’t think the current situation demands a multi-trillion-dollar package. So I think it should be highly targeted, very similar to what I put on the floor both in October and September.”

A ‘targeted’ bill “isn't anything that we should even be looking at” replied Pelosi, who remains adamant that Congress must pass a comprehensive package.

Matters are complicated further by the fact that a government funding bill also needs to be agreed on by mid-December, although it is also thought possible that coronavirus relief measures such as a stimulus check could be included in this.
Passing a stimulus bill after Biden becomes president

Biden is a supporter of major economic relief and has put forward a plan that includes a second round of stimulus checks, but the prospects of a large package materialising after he takes office will also depend on the Senate.

Having maintained a majority in the House in last week’s congressional elections - albeit they have been left with a slimmer one than before - Democrats can take control of both chambers of Congress if they win two run-off Senate votes in Georgia in the New Year.

On 5 January, Democrats Jon Ossoff and Raphael Warnock face Republicans David Perdue and Kelly Loeffler, respectively, in election re-runs after none of the contenders managed to win over 50% of the vote in last Tuesday’s original ballots.

Were both Ossoff and Warnock to win their Senate races, Republicans’ hitherto 53-47 majority in the upper house would be wiped out, leaving the two sides tied at 50 seats each. As the vice-president - which is to be Democrat Kamala Harris - is given a tie-breaking Senate vote in such a circumstance, the Dems would hold the advantage.

If Democrats can gain control of both legislative branches, they could then push through a larger package after Biden’s inauguration. Indeed, according to Mark Zandi, the chief economist at Moody’s Analytics, a Dem-held Congress could not only see a multi-trillion-dollar stimulus package go through early next year; it would also potentially bring another one in summer 2021, too.

A double win for the Democrats in Georgia remains a big if, however. Should January’s run-off elections see them fail to take over the Senate, they will once more find themselves up against a Republican majority against spending big on stimulus.