Want a third stimulus check? America’s next Congress may hold the key

A second stimulus check could still be included in the final stimulus package of the year, but it could be worth half of the $1,200 maximum  of the first check. President-elect Joe Biden is pushing for more stimulus relief in early 2021 — possibly in the form of a third stimulus check for those who meet the eligibility requirements.

“The stimulus package has occurred,” Biden said Wednesday, referring to the state of negotiations over a new $900 billion stimulus bill and a second stimulus check. “And it looks like there’s going to be direct cash payments. But it’s a down payment — an important down payment — on what’s going to have to be done at the end of January and into February.”

While both the House of Representatives and the White House will be led by Democrats, two runoff elections in Georgia on Jan. 5 will determine which party controls the Senate. It’ll also determine whether or not Congress considers a larger stimulus package and perhaps a third payment in the new year.

Whoever controls the Senate can make or break a larger stimulus check

Biden has called on Congress to pass more aid now, in the lame-duck session, before he assumes office on Jan. 20. But the president-elect said anything Washington sends now would “at best only be a down payment” on more substantial aid he intends to propose once he takes office.

As a Democrat, Biden’s path to getting economic aid approved — including a second check — could be much smoother if Democrats also hold both chambers of Congress in the new year. In the next Congress, which begins in the first days of January, Democrats will keep a slim majority in the House. 

Control of the Senate, however, will depend on run-off elections in Georgia on Jan. 5 for two Senate seats. If Democrats win both elections, the party will control the Senate with 50 seats — 48 Democrats and two independents who caucus with the party — and Vice President-elect Kamala Harris’ having the power to break ties.

If Republicans win one or both seats in January, the GOP will keep control of the Senate and Biden will start his term with a divided government, with a Republican party led by McConnell, who could oppose a second check for the expense.

Stimulus checks are popular and expensive 

The IRS has said it spent around $270 billion to send 160 million stimulus checks, but it’s likely that total number, once catch-up payments are added in, is closer to $300 billion. That’s enough money to keep a second stimulus check out of the current stimulus bill, according to a Washington Post report.

Many economists argue now is not the time to rein in federal spending, with the economy struggling to get back on its feet. Instead the federal government should look to send out more aid to prop up the economy. 

“Being timid in our policy solutions during this crisis would be a mistake,” wrote William Gale, senior fellow in the Economic Studies Program at the Brookings Institution. “Congress needs to allocate more resources — trillions of dollars — for relief and stimulus to support people and businesses.”

For tens of millions of taxpayers, the majority of the stimulus money paid for food, rent and utilities and debt, with a quarter going into savings, according to a Census Bureau survey from this summer. With Biden warning the country is heading into a “dark winter” — facing a spike in coronavirus cases across the US and an economy continuing to shed jobs — a second check would likely find similar uses.

Since this summer, however, some Republicans in Congress have balked at funding another large aid package as the US deficit has climbed, and Senate Majority Leader Mitch McConnell has repeatedly said that any bill will need to have a significantly smaller price tag than the $2.2 trillion proposal pushed by House Democrats through the fall to get Senate Republican support. 

If Republicans keep Senate control, here’s what could happen

While the group of Republican and Democratic senators who worked on December’s bipartisan stimulus package points to a possible path of cooperation between Biden and the next Congress, it is just as likely that Senate Republicans could try to rein in spending if they retain control of the upper chamber.

If Biden does face a divided Congress, he will most likely do what every president has done when one or both chambers is in the other party’s hands, and look for areas where the two sides can find common ground. Passage of a new sweeping stimulus package might be off the table, but smaller aid proposals focused on specific needs — such as an increase in the minimum wage or another stimulus check tightly focused on those most in need — could find bipartisan support.

Biden could also look at executive actions to accomplish some of his goals, much as President Donald Trump did this summer with a series of executive orders. But without spending authority (only Congress has that), Biden would be limited in what he could accomplish without Congressional help — he wouldn’t be able to access the funds to send a second check.

As we wait for the new Congress and the Biden administration to step up next year, here’s where negotiations stand on another stimulus check, which benefits could be renewed if Congress decides to pass another bill and how soon you could expect to receive a second payment once it’s approved in Washington.