On Thursday, Goldman Sachs analysts revealed a prediction that there will likely be no second stimulus check in 2020.
“At this point we think it is clear that Congress will not pass additional fiscal stimulus this month. We now think any further stimulus will wait until early 2021,” analysts wrote in a note to clients.
They added that the “death of Supreme Court Justice Ruth Bader Ginsburg— and the ensuing battle over her successor” has made it even more unlikely for a stimulus package to pass before the election. Without another stimulus check, Goldman predicted, the economy will suffer, and result in a “meaningful hit” to disposable income in the fourth quarter, reported CNN.
But will an economic relief package that includes another round of stimulus checks come at all?
Macro research analyst at Evercore ISI Sarah Bianchi, for one, stated, “Fiscal stimulus is really all but dead,” Forbes reported.
Here’s what you need to know:
Congress Is at a Standstill
For months now, both sides of the aisle have failed to reach an agreement on the details of an economic relief package, despite the fact that Republicans and Democrats have both voiced their support for a second stimulus check.
Last week, Senate Republicans pushed for a scaled-back stimulus package that did not include a second round of checks, and Democrats responded by urging the necessity of economic relief for those struggling in the wake of the coronavirus pandemic.
The bill failed to garner enough support to advance, but many lawmakers are still pressing for a compromise to be made. Representative Al Green is quoted by CNBC as saying, “The economic impact payments must be made because the rent must be paid.”
Last week, CNN reported, 870,000 filed for first-time unemployment benefits, which is four times higher than before the pandemic.
Former economic adviser to President Obama, Austan Goolsbee, told the outlet, “It’s crazy that we could be adding more than 800,000 new people to the unemployment rolls and we’re not talking about finding relief or rescue for these people.”
House Majority Leader Steny Hoyer said on Thursday that despite the current stalemate, Congress is still attempting to iron out details of a larger stimulus package. “Right now, we continue to be focused on negotiating,” he said.
House Democrats’ New Package
On Thursday, Forbes reported that House Democrats are planning to reveal a smaller relief package next week.
The outlet stated that the package is expected to come in at $2.4 trillion, “acting as an updated version of the $3.4 trillion HEROES Act passed by the House earlier this year.”
The proposal is expected to include a second round of stimulus checks, but there is no saying whether or not it will appeal to Senate Republicans.
Hoyer added on Wednesday, “Mnuchin wants a deal. Pelosi wants a deal. They’ve been talking about it continuously.”
Even without GOP support, it’s possible the House could vote on the new bill next week.
Speaking at a press conference on Thursday, House Speaker Nancy Pelosi said, “We came down $1 trillion in our $3.4 trillion bill and offered to meet Republicans halfway. We still haven’t heard back from Republicans about that.”
She added, “I’m talking with my caucus, my leadership, and we’ll see what we’re going to do. But we’re ready for a negotiation. That’s what we’re ready for.”
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