Coronavirus Stimulus Check
Third stimulus check: what proposals are in negotiation?
President Biden's American Rescue Plan will be the starting point for talks over another round of stimulus checks, but it may not pass in its current form.
Approximately 900,000 Americans filed for unemployment insurance last week amid worsening economic desperation for many as the coronavirus pandemic wears on, shelves in food banks are emptying as hunger rises across the country. President Joe Biden has made it a priority to pass his American Rescue Plan (ARP) through Congress; a $1.9 trillion proposal laying out budgets for a third stimulus check of up to $1,400, extended unemployment benefits, vaccinations and much more to bring support to families and business still struggling due to the pandemic.
But admittedly what Biden wants and what Congress is prepares to sign-off are two very different things.
According to CNET there are two potential scenarios that could play out as negotiations begin among lawmakers at the Capitol:
The first is that Biden’s American Rescue Plan in its current form, or a similar version or hybrid of such a plan gets passed through Congress.
The second is that a smaller “skinny” bill that “targets” coronavirus relief, with provisions for only the third stimulus checks and money for covid-19 vaccine distribution.
Speaking on Monday, President Biden said he was willing to open talks on the income thresholds applied to a third stimulus check, telling reporters: “There's legitimate reason for people to say, 'Do you have the lines drawn the exact right way? Should it go to anybody making over X number of dollars or Y?’ I’m open to negotiate those things."
Biden also expressed a readiness to make concessions over the size and scope of his relief bill, but suggested Democrats could seek to pass a package closer to the $1.9tn figure, without Republican support, if talks drag on. "Time is of the essence and I must tell you I’m reluctant to cherry pick and take out one or two items here, and then have go through it again," he said.
It’s believed that lawmakers will be considering the two key options this week, ahead of the start of Donald Trump’s impeachment trial, scheduled to start on 9 February.
The IRS says that it is capable of sending out third stimulus checks to individuals within days of being given the OK.
What’s the hold up on a third stimulus check?
"I don't expect we'll know whether we have an agreement and to what extent the entire package will be able to pass or not pass until we get right down to the very end of this process, which will probably be in a couple weeks," the President said at the White House on Monday.
Goldman Sachs analyst Alec Phillips says efforts to get bipartisan backing for the bill in Congress will require a period of negotiation, as Republicans continue to push back over the proposed $1.9tn overall price tag.
Speaking on the 'Exchanges at Goldman Sachs' podcast on Wednesday, Phillips said a bipartisan package may end up being negotiated down to just over half its original spend. "Bipartisan support obviously has a political appeal and one would imagine that President Biden will, if he can, figure out how he can get Republican support for it, but I think the odds of getting $1.9tn in a covid relief package are probably pretty low," he explained.
"Our expectation is maybe $1.1tn, something like that."
Can Democrats use their majority and go it alone?
Janet Yellen, Biden’s brand new Treasury secretary has urged US lawmakers to "act big" on the next coronavirus relief package and, given that the Democrats now have control of both the House of Representatives and the Senate, they could also look to go it alone on larger relief legislation.
But there's a big but. Democrats' wafer-thin advantage in the Senate - the chamber is a 50-50 split, with Democratic Vice-President Kamala Harris given a tie-breaking vote - does not give them the filibuster-proof 60 votes they normally need to ensure legislation advances beyond the debate stage in the upper house, but in this case they can get round that by using a process called 'budget reconciliation', which only requires a simple majority of 51 for a bill to get through.
However, analyst Alec Phillips posits that following such a strategy could end up actually being a more drawn-out process than negotiating a smaller bill supported by enough senators from both sides of the floor. "There’s a lot of procedural stuff that goes into [budget reconciliation] that could make it take longer […]," he said.
"If they go the bipartisan route and it looks like maybe they can get 60 votes in the Senate for that, then that’s maybe a little bit quicker," he added, noting that there is no guarantee of unanimous support for a larger package from all 50 Democratic senators.
Senate Majority Leader Chuck Schumer said Monday he aims to get a covid-19 bill passed by mid-March.
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