President Joe Biden $ 1.9 trillion coronavirus relief plan proposes a third round of $ 1,400 stimulus checks for most Americans. While that could extend its hand to millions of households still suffering the economic consequences of the pandemic, it could take months for payments to arrive, analysts say.
The price of the relief package, called the American Rescue Plan, is likely to face the setback of Republican lawmakers, who last year resisted Democrats ’efforts to pass a $ 2 trillion bill. Hunter Hammond, an analyst at Heights Securities, expects the final package to be reduced by $ 1 trillion. But most analysts think lawmakers on both sides of the aisle will support direct payments of $ 1,400, which economists consider a lifeline for many troubled cash workers who have lost their jobs or seen their jobs fall. revenue during the pandemic.
According to Ed Mills, an analyst at investment bank Raymond James, support for another stimulus package may increase in intensity given several developments that point to widening economic distress as the pandemic worsens. A weaker outlook for the labor market, with a higher-than-expected level 1 million unemployment claims during the first week of January, as well as the record number of COVID-19 infections and deaths, could push lawmakers to support Biden’s plan for additional incentives, analysts said.
“The market is once again expecting more fiscal stimulus to be inevitable during the first days of the Biden administration, with the release of a $ 1.9 trillion‘ American Rescue Plan ’,” Mills said in a report on January 15th. we anticipate that additional tax support will likely remain, time and scope have changed greatly. “
The main issue is whether Republican lawmakers would support the package or whether the Biden administration would end up addressing its spending priorities by splitting spending proposals into two bills, analysts say.
Janet Yellen, President-elect Joe Biden as Treasury Secretary, said Jan. 19 that the incoming administration would focus on quickly earning its $ 1.9 trillion pandemic relief plan. Yellen argued that additional incentives are needed, including Mr. They drink from a minimum wage of $ 15, to avoid “economic scars due to this pandemic.”
The plan to provide more direct aid to middle- and lower-class households could help raise GDP by 0.7%, although other measures in the bill (such as a higher minimum wage and state aid ) could boost GDP growth by 1.5%, according to a January 18 report by Oxford Economics US economist Gregory Daco.
That’s what analysts predict about $ 1,400 checks and other spending proposals.
Are $ 1,400 checks a final deal?
Most likely, according to Wall Street and political analysts. There is growing support among Republican lawmakers for additional incentives targeting low- and middle-income households, with the latest effort to pass $ 2,000 stimulus control gaining some bipartisan support.
There is an 85% chance of passing a reduced package in the first three months of 2021, predicts Hammond of Height Securities. Due to continued support for additional direct aids to households, checks are likely to be included in this smaller package.
“We believe there is support for a smaller package that includes $ 1,400 checks, more health care funding, support for small businesses, and some state and local aid,” Mills said.
When would you receive a $ 1,400 check?
Alec Phillips, a U.S. political economist at Goldman Sachs, thinks the package could be approved in mid-February to mid-March. After the attendance bill passes Congress, it must be signed by the president. After that, the IRS would distribute funds by direct deposit, mail checks, and prepaid debit cards.
In the first stimulus payments in April 2020, which targeted $ 1,200 to eligible adults, as well as $ 500 per child, payments typically took between two weeks and several months to reach people. The second round of checks, which sent $ 600 to each eligible adult and child, required about a week for the funds to arrive by direct deposit.
But in some cases people experimented delays in receiving money due to problems with your account information. Based on previous stimulus payments, and assuming Congress approves a new relief bill in mid-February, checks could reach bank accounts in late February, though that would probably be best. . If a package is passed in late March, people may receive their checks in early April.
Warnings are that these time periods mean that at least 10 Republican senators support the package, allowing 60 votes in the Senate to overcome a possible hurdle and pass the bill, analysts noted. If the Biden administration is unable to gather enough GOP support, stimulus sponsors could go through a process known as budget reconciliation. This parliamentary maneuver only requires a majority of votes for the legislation to become law, although it may delay approval.
Would you qualify more people to get a check?
Millions more Americans could be eligible for a check if Mr. Biden’s plan is approved as he anticipates. One of its goals is to expand payments to adult dependents, who were excluded from the first two rounds of checks.
This exclusion meant that college students who claim to be dependent on their parents ’taxes, as well as disabled adults who claim to be dependent, could not get the checks. Because the two previous relief checks defined a child as a person under the age of 17, they also excluded high school students who were 17 or 18 years old. Mr Biden’s plan would also extend payments to older teenagers.
Do Americans Really Need Money?
Signs indicate that millions of households are facing increasing financial difficulties as the pandemic worsens, causing some companies to lay off staff and reduce hours.
In December, recruitment in the United States fell into the hands of first time in seven months, as the virus weighed heavily on restaurants, bars and other service-related businesses. Last week also saw the number of Americans applying for weekly unemployment claims, representing layoffs. jumped to nearly 1 million.
The financial need is greater among lower-income households. Still, nearly half of households with incomes above $ 150,000 said they needed stimulus checks for financial stability, according to a recent Credit Karma survey. Nearly 6 out of 10 households face financial hardship, TransUnion found in a November survey.
The additional stimulus funds “will be essential to the financial stability of many Americans, including those who seem to earn the most,” said Colleen McCreary, head of people at Credit Karma on CBS MoneyWatch in an email. “As the pandemic drags on, 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 not last them more than a month. Most said they would use the money to pay home bills and day-to-day basics.
Overall, Mr Biden’s stimulus plan would amount to about $ 3,500 per household, according to Oxford Economics. In other measures to support workers and help boost the economy, it also wants to increase unemployment benefits increased to $ 400 a week and has called for an increase in the federal minimum wage of $ 15 per hour.
The wage, now at $ 7.25 per hour, has not risen since 2009, although many U.S. states and cities have raised the local minimum wage.
“With reports from the Associated Press.”