President-elect Joe Biden said Friday that he is working on a new multi-trillion-dollar coronavirus relief package that would include increasing the $600 direct payments provided in legislation passed last month to $2,000.
“Six hundred dollars is simply not enough when you have to choose between paying rent or putting food on the table and keeping the lights on,” Biden said.
The package, which Biden said will be announced next Thursday ahead of his inauguration on January 20, will also call for billions of dollars for vaccinations, tens of billions to help schools reopen safely and more money for state and local governments as well as enhanced unemployment benefits.
“The price tag will be high,” Biden said. Asked about a rumored price tag of some $2 trillion, Biden said: “The answer is yes, it will be in the trillions of dollars.” Biden said that failure to provide additional aid would result in “a broader economic cost.”
Biden said he would also focus on getting aid to minority-owned small business and called for an increase in the federal minimum wage to $15.
Axios reported Thursday that Biden is considering a two-step approach to coronavirus relief. That would involve first asking for $1,400 payments along with money for vaccine distribution and aid to state and local governments and then pursuing a $3 trillion tax and infrastructure package.
Economists expect a smaller package: Democrats are set to control both chambers of Congress, but a slim majority in the House and a 50-50 split in the Senate mean that it may be difficult to get thee votes required to pass another package along the lines Biden is proposing. At the very least, the margins in the House and Senate could be an early test of Biden’s ability — and that of congressional Democratic leaders — to wrangle members of their own party and win support from Republicans, who pressed to keep the last relief package from topping $1 trillion.
Bloomberg News reports that, after Democrats won control of the Senate this week with victories in two Georgia Senate runoffs, Wall Street economists predicted that any new stimulus package would come in at $1 trillion or less: “JPMorgan Chase & Co. predicted a new stimulus package worth $900 billion; Goldman Sachs Group Inc. said it expected about $750 billion in new aid; and Bank of America Corp. analysts projected a bill in the ‘ballpark’ of $1 trillion.”
$2,000 checks not a lock, either: Sen. Chuck Schumer (D-NY) said Wednesday that providing $2,000 coronavirus relief checks would be a top priority for the newly seated 117th Congress. "One of the first things that I want to do when our new senators are seated, is deliver the $2,000 checks to the American families," Schumer, set to become the Senate Majority Leader, told reporters.
Sen. Joe Manchin (D-WV) may have different ideas. In a sign of how challenging it may be to reach agreement on another relief package, Manchin told The Washington Post on Friday that getting people vaccinated, not $2,000 checks, should be the top priority for the new Congress and that any additional spending should be targeted to people who need it most.
“I don’t know where in the hell $2,000 came from. I swear to God I don’t. That’s another $400 billion dollars,” Manchin said.
Initial reports that Manchin said he would "absolutely not" support $2,000 payments sent stocks sharply lower on Friday, but the senator later clarified that he may support more checks if they were targeted.
Manchin last month led a bipartisan group of moderate senators who crafted a $900 billion compromise coronavirus relief package that helped break a months-long congressional deadlock on additional aid. He and other centrists will have newfound power in an evenly divided Senate, though some Republicans have also voiced support for $2,000 payments and their backing could help the larger payments to pass.
The bottom line: The latest unemployment numbers (see below) highlight the need for additional economic support. We should have more details about Biden’s proposal next week — and the contours of the public debate over another round of aid should become clearer soon after.