Will a political divide keep interfering with stimulus negotiations? There’s new hope for a compromise.
Sarah Tew/CNET
With 57 days until the Jan. 20 inauguration of President-elect Joe Biden, a daily average of over 175,000 new COVID-19 cases during the last week and the final economic protections drying up in a little over a month, the pressure to restart negotiations on the next stimulus bill continues to mount. There’s just one main problem: Congress is on recess for the Thanksgiving holiday, with a scant number of work days in Washington in December and an imperative to pass a bill by Dec. 11 to keep funding the government.
The lawmakers’ packed agenda leaves precious little time for working out a large or even a small stimulus bill before the new year. Yet that’s precisely what top leaders and economists are calling for with increased urgency.
On Tuesday, a group of 127 economists, including former President Barack Obama’s top economic advisor, published an open letter (PDF) pressing Congress to pass a stimulus bill that is “big, immediate and direct, and lasting,” turning up the pressure on Republican and Democratic lawmakers to approve essential stimulus aid, including a second stimulus check, by the end of 2020.
“We urge policymakers to use all the tools at their disposal to revitalize the economy, including direct cash payments, which are one of the quickest, most equitable, and most effective ways to get families and the economy back on track,” the letter said.
Biden’s selection of Janet Yellen as US Treasury Secretary lines up an ally who’s no stranger to stimulus. Yellen, who served as chair of the Federal Reserve under both Obama and President Donald Trump (until 2018), was involved in sending out stimulus checks during the 2008 US recession (PDF) and would be instrumental in delivering a second stimulus check if it’s approved after Biden takes office.
But few think it’s wise to wait that long.
“The pandemic is raging, and it’s starting to do damage again,” Mark Zandi, an economist at Moody’s Analytics, told The New York Times this week, predicting that the economy will contract in the first half of 2021 without more stimulus.
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Next stimulus checks: What to expect
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As a result, a growing chorus of voices is calling for Biden, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer to support a smaller stimulus package than the $2.2 trillion Heroes Act that Democrats have backed since May. This bill would include a second direct payment for qualified adults and more money for dependents, plus enhanced unemployment benefits and funding for more programs besides.
The idea behind the strategy shift would be to get some aid through before inauguration and a larger bill after Biden takes office. Pelosi and Schumer have held fast to their stance that narrow measures are unacceptable to people hardest hit by the effects of COVID-19. Meanwhile, Republicans favor a smaller relief package as a stop-gap until the first mass coronavirus vaccines are administered in mid-2021. The Republican plan does not appear to include a second direct payment.
On Monday, a transition insider denied the claim that Biden’s transition team reportedly urged Democratic leaders in Congress to strike a deal now, according to a tweet from Washington Post reporter Jeff Stein.
To complicate reaching an agreement on more aid, both the House and Senate are in recess until after Thanksgiving, and when they return, legislators will have a handful of days to hammer out the 2021 federal budget, prior to the Dec. 11 spending deadline, if the government is to avoid a shutdown.
Here’s what we know about where negotiations stand right now and what could happen before the end of the year.
Time is running out to get a stimulus bill passed before the end of 2020.
Sarah Tew/CNET
How soon could a new stimulus package pass now?
Here are some possible scenarios that could play out over the coming weeks.
When could a stimulus bill or package pass?
| House votes | Senate votes | President signs |
|---|---|---|
| Dec. 11 | Dec. 12 | Dec. 13 |
| Feb. 1, 2021 (after inauguration) | Feb. 2 | Feb. 3 |
| Feb. 16 (Feb. 15 is President’s Day) | Feb. 16 | Feb. 16 |
| Mar. 15 | Mar. 16 | Mar. 17 |
A stimulus bill is completed before Jan. 20: An agreement is made, and the current House and Senate vote before the new Congress is seated in January. If Trump signs the rescue bill into law, stimulus checks and other aid would likely begin to go out within weeks, with certain groups receiving financial help before the end of 2020.
Negotiators agree on a stimulus deal but it fails in either the Senate or House: In this situation, Democrats and Republicans could advance their own proposals that might pass in their majority chambers but fail (or fail to be considered) by the other. In this case, Congress might try again after Biden is sworn in as president.
Some funding could be included in a bill that also funds the government past Dec. 11: It’s possible that one piece of funding — for example a stimulus check, unemployment aid or an extension of the eviction stay — could make it into a bill to keep the government funded past Dec. 11 and avoid a shutdown. As sitting president, Trump would need to sign the bill into law for it to take effect.
Read more: Want your second stimulus check faster? Do this now
Talks once again fall apart until after Jan. 20: If partisan differences keep a bill from passing, it’s likely they’ll restart in some capacity after the inauguration in January.
To help visualize when a bill could pass, we’ve come up with four possible dates for an agreement. If a bill does pass that includes a direct payment, here’s how quickly we think the IRS could send a second stimulus check.
Stimulus negotiations are under incredible stress.
Sarah Tew/CNET
Why the Democrats’ $2.2 trillion stimulus package still matters
On Oct. 1, the House of Representatives passed a revised Heroes Act that included a second stimulus check and additional benefits such as enhanced unemployment benefits for tens of millions of Americans. The House bill, endorsed primarily by Democrats, was not expected to advance through the Republican-controlled Senate, and indeed has not.
It provides the framework Pelosi is working from, however, has the support of Biden and could figure into future negotiations, depending on election results that could potentially shift the balance one way or another.
The vote was thought to provide cover for House Democrats as they campaign without a new relief bill, much as the Senate did earlier in September for Republican members with its $650 billion skinny bill. Following the vote, McConnell and Senate Republicans have shifted their support to a smaller $500 million proposal.
Biden on Nov. 16 called on Congress to pass the revised Heroes Act now.
What do Republicans and Democrats agree on for a new bill?
Proposals from both sides have included another stimulus payment of up to $1,200 for individuals who meet the requirements (although the Senate’s $500 billion bill does not include a second check, aid for airlines, enhanced unemployment insurance and extending the Paycheck Protection Program for businesses. The two sides also agree on more financial assistance for coronavirus testing and tracing and vaccine deployment.
Although the Senate’s targeted bills, which did not advance, did not include stimulus checks, Republicans (including those in the Senate) have supported them.
Here are more details on the biggest points of contention between the White House Republicans and the Democrats.
For more information about stimulus checks, here’s how soon you might get your second stimulus check now, what you should do to speed up the delivery of a potential second check, and what to know about the HEALS, CARES and Heroes stimulus bill proposals that could help inform a final package.