After months of Nancy Pelosi holding up coronavirus relief until after the presidential election for political purposes, Joe Biden is set to unveil a proposed $2 trillion stimulus.
For reference, President Trump’s CARES Act was the largest stimulus bill in U.S. history, and totaled $2.2 trillion. Barack Obama’s stimulus package in inflation-adjusted dollars came out to roughly $1 trillion.
According to Bloomberg:
Biden on Thursday will unveil a Covid-19 relief package rivaled in size only by last year’s $2 trillion Cares Act, in his first legislative test in the face of a split U.S. Senate and a deteriorating economy.
Biden last week put the “entire package” at “trillions of dollars,” and many Democrats believe it will be as much as $2 trillion, while others expect the coronavirus-only portion will fall closer to $900 billion. That means that other spending could take the package to the higher end of the various estimates. Treasury yields rose in Asia on Thursday amid speculation that will be the case.
Biden’s plans will “reflect the urgency of the economic situation that our country finds itself in and the need for action — urgent action,” Brian Deese, who will serve as Biden’s National Economic Council director, said in an interview. Biden aims to replicate the bipartisanship behind the December aid agreement, Deese said. “We need to focus on unity, even in a moment that is challenging and difficult as this one.”
Previewing Thursday’s announcement, Biden last week said that “trillions of dollars” in spending would take advantage of historically low interest rates to invest in both short-term economic support and long-term development. A broader bill in the spring would be focused on longer-term goals such as infrastructure and climate change, people familiar with the matter said.
The plan is expected to contain the following
- An increase in direct payments to $2,000 from $600
- Extended unemployment benefits
- Money for state and local governments
- Funding for vaccine distribution
- Tax credits for families with children
This will come after signs that the economic recovery is slowing.
We learned earlier in the month that U.S. employers cut 140,000 jobs in December, marking the first net decline in payrolls since the pandemic began. That followed five months that hiring slowed. And just hours ago last weeks new weekly unemployment claims data came in – showing 965,000 filing for unemployment versus 789,000 expected. That marks the highest weekly jobless claims since August, ending what was previously a downward trend in initial claims.
Small business owners appear to believe that President Trump is better equipped to manage the economic recovery than Biden – as evidenced in a collapse in small business sentiment following the election.