Congress is on the cusp of passing a new round of aid aimed at alleviating impacts of the coronavirus pandemic, but calls are already ringing out for more relief. Can Americans expect that to happen soon?
No, say analysts. Not in the short term.
“Despite some claims that the latest round of COVID relief is a ‘down payment’ on another, possibly larger package, this is probably it for a while,” said Brian Gardner, chief Washington policy strategist at Stifel, in a note on Monday.
President-elect Joe Biden last week called the emerging stimulus package “an important down payment on what’s going to have to be done beginning the end of January into February,” and pressure is mounting for more aid to those who have lost jobs and others.
Biden’s ambition for more stimulus could hit a wall depending on the outcome of the two runoff elections in Georgia next month that will decide Senate control.
“It’s simple — if the Republicans win just one of the two
seats, they will retain control of the Senate, which would point to a small
bill,” wrote Greg Valliere, chief U.S. policy strategist of AGF Investments, in
a note on Monday.
“If the Democrats win both seats — and thus the Senate — a much larger stimulus bill would be likely,” he said.
To be sure, noted Gardner, even if Democrats win both races and take back the Senate, they’d still fall well short of the 60 votes needed to pass legislation in the chamber on their own. That means Biden’s party would need Republican support to pass another COVID package. “That appears to be a long shot at this point,” Gardner said.
“Strong political ideologies will represent a significant
obstacle to any additional near-term fiscal stimulus” said Gregory Daco, chief
U.S. economist for Oxford Economics, in a Monday note.
The roughly $900 billion deal moving through Congress is expected to deliver to many Americans a $600 direct check; $300 a week in enhanced federal unemployment benefits; and aid for small businesses and vaccine distribution. Votes are expected later Monday.
The new jobless benefits are due to extend for just 11 weeks, and that mid-March deadline could force negotiators back to the table, Valliere suggested.
“It’s unlikely that the economy will be up and running by then, so more aid will be required,” he wrote.
Left out of the package are aid for state and local
governments — which was sought by Democrats — and liability protection for
businesses — a Republican priority. Both those issues are also likely to be
part of negotiations early next year.
U.S. stocks were mixed on Monday as the Dow Jones Industrial Average
turned positive after shaking off an early bout of heavy selling. The S&P 500
traded lower, as investors were digesting reports of a novel strain of the coronavirus SARS-CoV-2 and progress on the relief package in Congress.