Victories by the two Democrats in Georgiacould mean a third test of incentives for Americans this spring, analysts say. This would provide crucial financial support for households such as this month directed by the latest relief bill, an effort that has been criticized by both Democrats and some Republicans for doing too little to help families battling the coronavirus pandemic.
CBS News projects that Democrats John Osoff and Rafael Warnock have defeated incumbent Republican senators Kelly Löfler and David Purdue. The surprise result will lead to a 50-50 split between Senate Democrats and Republicans, giving the vote to Vice President-elect Kamala Harris. This will facilitate the adoption of another stimulus-easing bill that President-elect Joe Biden has already said he supports, according to political and financial analysts.
Another so-called economic impact payment will follow in the footsteps of the latest relief measure, a $ 900 billion banknote that President Donald Trump has delayed and criticized the $ 600 bill as “absurdly low.”
The big question is whether lawmakers can demand $ 2,000 or $ 1,400 in cash payments, the latter being the difference between $ 600 checks and failed efforts to increase them to $ 2,000 in the final bill. On January 10, Mr. Biden tweeted that $ 600 was “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 the Democrats to grow as they continue to stimulate, with a $ 2,000 check (or at least the remaining $ 1,400) being the lead,” said Ed Mills, an investment bank analyst with Raymond James, in a post-election report in Georgia.
Biden: The latest “down payment” aid
Mr Biden described the $ 900 billion stimulus bill passed last month as an “initial payment” for a larger aid package. That could turn into a new package ranging from $ 1 trillion to $ 1.5 trillion, according to Heights Securities analyst Hunter Hammond.
The sweetened stimulus package could come in March, Hammond and Mills predict. This is because the latest relief measure extended unemployment programs until mid-March, putting pressure on Congress to act on additional financial support from the termination to continue unemployment benefits for millions of unemployed Americans.
Democrats are likely to push for a new round of $ 2,000 inspections, Hammond predicted, noting that both Mr. Biden and Warnock and Osoff were campaigning. Speaking to candidates before the vote this week, Mr Biden said their choice would help get $ 2,000 checks out of the door “immediately to help people in real trouble”.
Another 8 million poor people
Even with previous stimulus aid, 8 million Americansduring the coronavirus pandemic. Millions of others face a number of difficulties, from food insecurity to problems paying their bills as the crisis strengthens the economy.
The $ 600 checks issued by the Treasury Department last month can last the most needy Americans for no more than six weeks, according to the financial services app Earnin. The company found that people who lived from paycheck to paycheck and who received the initial 1,200 checks last year spent their money within a week.
Some economists say much more funding is needed than the recent $ 900 billion package to help the economy until coronavirus vaccines become widespread, which may not happen until this summer or fall.
According to the Institute for Economic Policy, up to $ 3 trillion may be needed to ensure a rapid economic recovery. The left-leaning think tank noted that the most recent stimulus package misses funding for state and local governments, which have seen declining tax revenues due to the crisis.
Although incentive checks are helping households overcome the crisis, most economists see other relief measures as more effective – especially programs targeting people who are currently financially affected, such as unemployment benefits. This is because cash payments are distributed to almost every middle- and low-income household, regardless of whether they are financially affected by the crisis.
“Inspections are usually less powerful in supporting costs than unemployment benefits,” said Gregory Daco, chief economist at Oxford Economics in the United States, in a recent research report. He added that the $ 900 billion relief bill “is unlikely to reach what is needed to prevent a severe winter.”