Wins of the two Democrats in Georgia Senate runoff elections it could mean a third stimulus check for Americans this spring, according to analysts. This would provide crucial financial support for families this week receiving $ 600 payments driven by the most recent relief bill – an effort that has been criticized by Democrats and some Republicans for doing too little to help families struggling with the coronavirus pandemic.
CBS News projects that Democrats Jon Ossoff and Raphael Warnock defeated Republican Senators Kelly Loeffler and David Perdue. The surprise result will result in a 50-50 split between Senate Democrats and Republicans, giving Vice President-elect Kamala Harris the tiebreaker. This will make it easier to pass another stimulus bill, which President-elect Joe Biden previously said he supports, according to political and financial analysts.
Another so-called Economic Impact Payment would follow in the wake of the most recent relief measure, a $ 900 billion bill that President Donald Trump postponed and criticized as “ridiculously low”. Democrats and some Republicans supported raising checks to $ 2,000 per person, but the effort failed due to opposition of Senate majority leader Mitch McConnell.
A big question is whether lawmakers can demand cash payments of $ 2,000 or $ 1,400, with the latter representing the difference between $ 600 checks and the undone effort to increase them to $ 2,000 in the most recent account.
“We expect a growing expectation that Democrats will seek additional stimulus, with a check for $ 2,000 (or at least the remaining $ 1,400) as the main item,” said Ed Mills, an analyst at investment bank Raymond James, in a report after the election in Georgia.
Biden: Last aid an “initial payment”
Biden described the $ 900 billion stimulus project approved last month as an “entry” into a more comprehensive aid package. That could translate into a new $ 1 trillion to $ 1.5 trillion package, according to Heights Securities analyst Hunter Hammond.
An improved 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, which puts pressure on Congress to act with additional financial support through this cut to continue unemployment benefits for millions of unemployed Americans.
Democrats must push for a new round of checks worth $ 2,000, Hammond predicted, noting that both Biden, Warnock and Ossoff, campaigned on the issue. While hesitating for candidates ahead of this week’s vote, Biden said his election would help draw checks for $ 2,000 “immediately, to help people who are in serious trouble.”
8 million poor people
Even with the help of previous stimulus, 8 million Americans fell into poverty during the coronavirus pandemic. Millions of other people are going through a series of difficulties, from food insecurity to problems paying their bills, after the crisis shook the economy.
The $ 600 checks issued by the Treasury Department last month could last for the neediest Americans no more than six weeks, according to the financial services app Earnin. The company found that people who lived from salary to salary and who received the 1,200 initial checks last year spent their money in a week.
Some economists say that much more funding is needed in addition to the recent $ 900 billion package to help the economy until coronavirus vaccines are widely distributed, which may not be until summer or fall.
Up to $ 3 trillion may be needed to guarantee a rapid economic recovery, according to the Institute for Economic Policy. The left-wing think tank noted that the most recent stimulus package omitted funding for state and local governments, which saw a drop in tax revenue due to the crisis.
While stimulus checks are helping families overcome the crisis, most economists see other relief measures as more effective – especially programs that target people who are currently suffering a financial blow, such as unemployment insurance. This is because cash payments are distributed to almost all middle and low-income families, regardless of whether they have been financially affected by the crisis.
“Checks are generally less potent in supporting spending than unemployment benefits,” wrote Oxford Economics chief economist Gregory Daco in a recent research report. He added that the $ 900 billion bailout account “is likely to fall short of what is needed to prevent a harsh winter.”