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- The shape and size of a stimulus package is at stake in the second round in Georgia on January 5.
- “That’s it,” political expert Heidi Schierholz said in an interview.
- A slim Democratic majority in the Senate could use a legislative maneuver to pass a $ 3.4 trillion coronavirus aid plan without Republican votes.
- Visit the Business Insider homepage for more stories.
President-elect Joe Biden is set to take office on January 20, but the balance of power in Washington is still unresolved with two Senate ballots in Georgia just two weeks before Biden’s inauguration .
In one race, Democrat Jon Ossoff challenges Republican Senator David Perdue, while Republican Senator Kelly Loeffler faces Democrat Raphael Warnock in the second round. The results will determine which party controls the Senate in an extraordinary time of public health and economic problems – and how much federal dollars will be pumped into the economy early next year.
The scope of another economic aid package is on the ballot as Georgians voted on January 5. Democrats and most Republicans agree it takes one, but they clashed for months over its size and the level of federal support needed to sustain an economic recovery many economists are weakening. Unemployment claims rose last week for the first time since early October.
Neither side has moved since Biden defeated President Donald Trump in the Nov. 3 election and the rift between the two parties may only widen in the lame session. The president-elect this week praised the sweeping heroes law the House passed in May, even as Republicans rejected it for months as a progressive wishlist.
Now Democrats are pinning their hopes on winning both races in the state and securing a meager majority, leaving Vice President-elect Kamala Harris to vote for the tiebreaker. In this scenario, Democrats could use a legislative maneuver to pass pandemic relief and other tax and spending measures with a simple majority and no GOP vote.
“It’s all about the revival,” Heidi Schierholz, policy director at the Left Institute for Economic Policy, told Business Insider. “That’s all because if there is a Senate controlled by the Democrats, they can get a big package through reconciliation.”
She continued, “Without it, it will be up to Republicans in the Senate to know what a relief package looks like, if any. They have given a lot of signals where they are.”
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The GOP is backing a rescue plan much smaller than the $ 3.4 trillion package Democrats and Biden are seeking. Republicans continue to push for a thinner $ 500 billion measure they rolled out twice in September and October, despite a recent surge in cases of the virus across the country that are pushing states to reinstate restrictions and to shut down businesses.
Ossoff recently criticized Perdue for supporting the plan, which would reduce federal unemployment benefits from the previous $ 600 per week to $ 300 and omit direct payments.
“Senator David Perdue fought against $ 1,200 stimulus checks for workers and led the fight to cut unemployment insurance – while giving billions to his corporate donors,” Ossoff said in a tweet earlier this month. It is before expressed support for many provisions of Democratic law, including on the implementation of a moratorium on evictions and aid to troubled state and local governments.
Democrats have favored robust federal action throughout the pandemic, especially progressives.
“Can we please get stimulus checks, mortgage relief and rent relief and small business support and free testing, risk premium and health care for the uninsured (and under -insured) in the midst of a pandemic or is it too socialist too? Democratic Representative Alexandria Ocasio-Cortez said on Twitter last week.
Yet whatever the outcome of the hotly contested races, Democrats may be forced to reduce their ambitions. Elizabeth Pancotti, senior policy adviser for Employ America, a nonprofit, told Business Insider Democrats may need to respond to “conservative mid-road Democrats” by slashing the price of back-up legislation by pandemic case next year.
“If Georgia were to go in favor of the Democrats, I think there will still be concessions because there will only be 50 votes,” she said. “If they lose Georgia, I think the really big ticket items like the $ 600 federal unemployment benefit are off the table. Where there would have been one or two sets of [stimulus] controls, phase-out may be less. “
Biden has campaigned to raise higher taxes on wealthy individuals and businesses, a program Republicans are virtually certain to block if they cling to the Senate.
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