Victories by the two Democrats in Georgia Senate elections expiring could mean a third boost for Americans this spring, according to analysts. That would provide crucial financial support to households this month Receive $ 600 payments directed by the most recent emergency bill – an effort that has been criticized by Democrats as well as some Republicans for doing too little to help families struggling through the coronavirus pandemic.
CBS News projects Democrats Jon Ossoff and Raphael Warnock defeated incumbent Republican Senators Kelly Loeffler and David Perdue. The surprising result will result in a 50-50 split between Senate Democrats and Republicans, giving Vice President Kamala Harris the casting vote. That will facilitate the approval of a new stimulus bill, which President-elect Joe Biden has previously said he supports, according to political and financial analysts.
Another so-called economic impact payment would follow the most recent emergency measure, a $ 900 billion bill that President Donald Trump has postponed and criticized the $ 600 payments as “ridiculously low.” Democrats and some Republicans supported lifting the checks to $ 2,000 per person, but the effort failed due to opposition from Senate Majority Leader Mitch McConnell.
A big question is whether lawmakers could push for $ 2,000 or $ 1,400 cash payments, the latter representing the difference between the $ 600 checks and the quashed attempt to raise them to $ 2,000 in the most recent bill. On January 10, Mr. Biden tweeted that $ 600 is “just not enough when you have to choose between paying rent or putting food on the table.”
“We need $ 2,000 incentive checks,” he added.
“We expect a growing expectation that Democrats will pursue additional stimulus measures, with a check for $ 2,000 (or at least the remaining $ 1,400) leading the way,” said Ed Mills, an analyst at investment bank Raymond James, in a report after the elections in Georgia.
Biden: Last support a “down payment”
Mr. Biden described the $ 900 billion stimulus bill passed last month as a “down payment” on a more comprehensive aid package. That could translate into a new package ranging from $ 1 trillion to $ 1.5 trillion, according to Heights Securities analyst Hunter Hammond.
A sweetened stimulus package would likely come in March, Hammond and Mills predict. That’s because the most recent relief measure extended unemployment programs until mid-March, putting pressure on Congress to provide additional financial support through that shutdown to continue unemployment benefits for millions of unemployed Americans.
The Democrats will likely push for another round of checks worth $ 2,000, Hammond predicted, noting that both Mr. Biden, as well as Warnock and Ossoff, had campaigned on the matter. While searching for the candidates for this week’s vote, Mr. Biden said their election would help “get $ 2,000 checks out the door immediately, to help people in real trouble.”
8 million more poor people
Even with previous stimulus aid, 8 million Americans have fallen into poverty during the coronavirus pandemic. Millions of others experience a range of hardships, from food insecurity to problems paying their bills, after the crisis turned the economy upside down.
The $ 600 checks issued by the Treasury Department last month cannot last Americans most needy for more than six weeks, according to financial services app Earnin. The company found that people living from paycheck to paycheck who got the first 1,200 checks last year spent their money within a week.
Some economists say far more funding than the recent $ 900 billion package is needed to help the economy until coronavirus vaccines are widely distributed, which may not be until this summer or fall.
According to the Economic Policy Institute, as much as $ 3 trillion could be needed to ensure a rapid economic recovery. The left-wing think tank noted that the most recent stimulus package did not provide funding for state and local governments, which have seen tax revenues fall as a result of the crisis.
While the stimulus controls help households get through the crisis, most economists see other emergency measures as more effective – especially programs targeting people who are currently in a financial hit, such as unemployment benefits. That’s because the cash payments are made to almost every middle- and low-income household, regardless of whether or not they’ve been hit financially by the crisis.
“Checks are generally less powerful at supporting expenditure than unemployment benefits,” said US chief economist Gregory Daco of Oxford Economics in a recent research report. He added that the $ 900 billion emergency bill “is unlikely to meet what it takes to avoid a harsh winter.”