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President-elect Joe Biden’s $ 1.9 trillion coronavirus relief plan offers a third set of $ 1,400 stimulus checks for most Americans. Still, if that could reach out to millions of households still suffering from the economic fallout from the pandemic, it could be months before payments arrive, analysts said.
The price tag for the relief package, called the US bailout, is expected to face crackdown from Republican lawmakers, who last year resisted Democrats’ efforts to pass a $ 2 trillion bill. Hunter Hammond, an analyst at Heights Securities, expects the ultimate package to be cut from $ 1 trillion to $ 1.5 trillion. But most analysts believe lawmakers on both sides of the aisle will support the direct payments of $ 1,400, which economists see as a lifeline for many cash-strapped workers who have lost their jobs or have seen their incomes plummet during the pandemic.
According to Ed Mills, an analyst at investment bank Raymond James, support for another stimulus package could gain momentum given several developments that indicate worsening economic distress as the pandemic worsens . Weaker prospects for the labor market, with a 1 million jobless claims in the first week of January, along with a record number of COVID-19 infections and deaths could push lawmakers to back Mr Biden’s additional stimulus package, analysts say.
“The market has reverted to an expectation that further fiscal stimulus is virtually 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 on Jan.15. we expect further budget support to remain likely, timing and scope are very changeable. “
The main issues are whether Republican lawmakers would back the package or whether the Biden administration would end up attacking its spending priorities by splitting the spending proposals into two bills, analysts said.
On Tuesday, Janet Yellen, President-elect Joe Biden’s choice as Treasury secretary, said the new administration would focus on quickly adopting its $ 1.9 trillion pandemic relief plan. Yellen argued that additional stimulus, including Mr. Biden’s proposal for a minimum wage of $ 15, are needed to avoid “economic scars from this pandemic.”
Here’s what analysts are predicting about the $ 1,400 checks and other spending proposals.
Are $ 1,400 Checks a Done?
Very likely, according to Wall Street and political analysts. Republican lawmakers are increasingly supporting a further stimulus aimed at low- and middle-income households, with the latest effort to pass $ 2,000 stimulus checks gaining some bipartisan support.
There is an 85% chance that a reduced package will pass in the first three months of 2021, predicts Hammond of Height Securities. Due to continued support for additional direct household assistance, checks will likely be included in this smaller package.
“We believe there is support for a smaller package that includes checks for $ 1,400, more health care funding, support for small businesses, and public and local help,” Mills said.
When will I receive a check for $ 1,400?
Alec Phillips, chief US political economist at Goldman Sachs, believes the package could be passed from mid-February to mid-March. Once the relief bill is passed in Congress, it must be signed by the president. After that, the IRS distributed funds through direct deposit, mailed checks, and prepaid debit cards.
In the first stimulus payments in April 2020, which directed $ 1,200 to eligible adults as well as $ 500 per child, it typically took anywhere from two weeks to several months for the payments to reach people. The second round of checks, which sent $ 600 to each eligible adult and child, took about a week for funds to arrive by direct deposit.
But in some cases people have delays in receiving money due to issues with their account information. Based on previous stimulus money payments, and assuming Congress passes a new relief bill by mid-February, the checks could arrive in bank accounts by the end of this month. February, although that is probably the best of times. If a package is adopted at the end of March, people could receive their checks in early April.
The caveat is that these deadlines assume that at least 10 Republican senators back the package, allowing 60 votes in the Senate to overcome a possible filibuster and pass the bill, analysts noted. If the Biden administration fails to mobilize enough support from the GOP, then donors could adopt a process known as budget reconciliation. This parliamentary maneuver only requires a majority vote for the legislation to become law, although it may delay its passage.
Do Americans Really Need the Money?
Signs say millions of households face increasing financial hardship as the pandemic worsens, leading some companies to lay off staff and cut hours.
In December, hiring in the United States fell first time in seven months, because the virus has taken a particularly hard hit on restaurants, bars and other service businesses. The number of Americans asking for weekly unemployment claims, a proxy for layoffs, also last week rose to almost a million.
Financial need is greatest among low-income households. Yet nearly half of households with incomes over $ 150,000 said they needed stimulus checks to ensure financial stability, according to a recent Credit Karma survey. Nearly 6 in 10 households are facing financial difficulties, TransUnion found in a November poll.
The additional stimulus funds “will be critical to the financial stability of many Americans, including those who appear to be the highest paying,” Colleen McCreary, head of human resources at Credit Karma said in an email to CBS MoneyWatch. “As the pandemic continues, Americans continue to feel the financial crisis.”
A new Bankrate.com survey found that more than half of Americans said the second stimulus check of $ 600 per person would last no longer than a month. Most said they would use the money to pay household bills and basic necessities.
Overall, Mr Biden’s stimulus package is said to be around $ 3,500 per household, according to Oxford Economics. In other measures to support workers and help prop up the economy, he also wants to increase unemployment benefits to $ 400 per week and has called for increasing the federal rate minimum wage at $ 15 an hour.
The wage floor, now $ 7.25 an hour, has not been lifted since 2009, although many states and cities in the United States have raised the local minimum wage.
– With reporting from The Associated Press.
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