With the election now over and President-elect Joe Biden slated to take control of the White House, many are wondering if that means a deal could occur before 2021 or even Inauguration Day on January 20.
Main Democratic negotiator and House Speaker Nancy Pelosi and main Republican negotiator and Senate Majority Leader Mitch McConnell have both supported delivering a stimulus package.
After winning his Senate seat in Kentucky, CNBC reported that McConnell told reporters, “As I’ve said repeatedly in the last few months, we need another rescue package. Hopefully, the partisan passions that prevented us from doing another rescue package will subside with the election. And I think we need to do it and I think we need to do it before the end of the year.” Similarly, Pelosi said during her November 13 press conference, “Again, our focus in the Congress now, in this lame duck, continues to be on COVID relief. This is a red alert, all hands on deck. As Leader Schumer and I discussed yesterday, this is an emergency of the highest magnitude.”
For many economists, the negotiators’ urgent words match the urgency of the moment; depending on how long relief is delayed, they have said recovery for families and businesses could take years or decades.
However, both have disagreed on the amount and the contents of another stimulus package.
Pelosi is standing by her more than $2 trillion HEROES Act and has said that anything smaller “isn’t anything that we should even be looking at,” The Washington Post reported. McConnell, according to The Washington Post, has his eye on a much lower number. “My view is the level at which the economy is improving further underscores that we need to do something at about the amount that we put on the floor in September and October,” he said, referring to his $500 billion “skinny” bill. “I gather (Pelosi and Schumer) are looking at something dramatically larger. That’s not a place I think we’re wiling to go,” he later added.
As the negotiators work through the various plans being considered, here are some timelines on when you can expect to receive a check based on when Congress acts.
Congress Must Act Fast to Deliver A Bill Before the New Year
— KTAL NBC 6 News (@NBC6News) November 12, 2020
According to projections from CNET, Democrats and Republicans must be able to agree on a bill that the president is willing to sign before the third week of December.
If the House were to vote on December 11, the Senate would pass a final bill on December 12 and President Trump would sign it into law on December 13. Checks would be distributed via direct deposit during the week of December 28, and paper checks would most likely be distributed on January 11, more than a week before Inauguration Day.
If the House were to vote on February 1, the Senate would pass a final bill on February 2 and President-elect Biden would sign it into law on February 3. Checks would be distributed via direct deposit during the week of February 8 with paper checks going out during the week of February 16, potentially before or after Valentine’s Day (which falls on February 14 in 2021).
According to the Senate’s legislative calendar, it will not be in session between November 23 and 27 for the Thanksgiving holiday and it will also not be in session between December 21 an 31 for the Christmas holiday, leaving a maximum of 31 days for a deal to move through the Senate before 2021.
CNET estimated that under a scenario in which Democrats and Republicans are unable to agree on a package until March or April, checks would not be distributed until late winter (March 8) or early spring (April 12).
Economists Say Delays in Aid Could Cripple the Economy Long-Term
Worries about housing crisis mount as 2021 approaches with no stimulus. Massive evictions, lingering unemployment crisis, continued slowdown of the global economy, while the pandemic worsens through the next 4 to 6 months. Millions more infected and dead. https://t.co/9P5OzKX7CM
— News That Matter (@jay1stnewyorker) November 10, 2020
According to economists quoted in Salon magazine, the delay for relief in and of itself has meant that the cost and aid delivered in the next coronavirus relief package must be larger. As Joseph Stiglitz, a Nobel-prize winning economist and Columbia University professor said, “The delay in providing the stimulus almost surely will increase the amount of money necessary to restore the economy.” According to Stiglitz:
Balance sheets of households and firms get eroded and firms go bankrupt. Digging yourself out of a deep hole is much more expensive than preventing a decline into a deep hole — another instance in which the aphorism an ounce of prevention is worth a pound of cure is applicable.
Gregory Daco, the chief U.S. economist at Oxford Economics, told CBS News, “Without faster job growth — unlikely at this stage of the recovery — or increased fiscal aid, households, businesses and state and local governments will be increasingly susceptible to a deterioration of the health situation.”
Author and economist Michael Graetz estimated that it would take roughly $2 trillion to keep the economy from tanking. He also posited that focusing on the costs of the bill, instead of focusing on the potential costs of providing no or inadequate support, is not prudent. “You’re talking about serious problems that need to be addressed,” he said. “It’s like going shopping for your children when school starts. You don’t ask how much am I going to spend, you ask what do they need.”
We’re looking at six more months at least of state and local governments not getting the revenues that they need to function. I don’t understand why Congress, which has the ability to provide the money, has decided that it would like to see this as an occasion for layoffs of public workers. There’s this myth that state and local governments can balance their budgets if they just cut out fraud, waste and abuse. But instead, they’re going to cut out teachers, policemen and firemen.
However, Graetz also said he believes compromise is the only way to move forward. “I think (Democrats) should agree to do less in order to get the money out the door. Every week that passes that is $400 less that people who are unemployed have,” he said, adding that, “The American democratic system is built on compromise.”