As reported by cnet,

The fate of a third stimulus check may well rest with the leadership over the US Senate.

Sarah Tew/CNET

The second stimulus check is on its way, but the outcome of a runoff for two Senate seats in Georgia on Tuesday may have everything to do with whether a third stimulus check comes in at as high as $2,000 — or doesn’t come at all. In a twist on November’s election outcomes, two Senate seats are up for grabs between Republicans and Democrats. After the votes are tallied, the results of intense campaigning throughout the state will determine which political party will control the Senate — and possibly the direction of US policy at home and abroad.

The last battle over the second stimulus check before 2020 concluded was a Hail Mary to raise the ceiling from $600 to $2,000. It failed. But now, a new stimulus bill or a third direct payment will fall to the new House of Representatives, Senate and administration, the latter of which will transition with President-elect Joe Biden’s Jan. 20 inauguration.

Biden will come into office with his own plans for how to see the country through the ongoing coronavirus pandemic. He has called the second stimulus checks for $600 “a down payment — an important down payment — on what’s going to have to be done at the end of January and into February.”

How much congressional support Biden will have for his plans and one more direct payment is still to be determined. While both the House and the White House will be in Democratic hands, the effects of the vote is expected to shape whether Congress considers a larger stimulus package and perhaps a third payment this year.

The party controlling the Senate can make or break a larger stimulus check

As a Democrat, Biden’s path to getting economic aid approved — including a third check — could be much smoother if Democrats also hold both chambers of Congress this year. In the next Congress, 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 seats, the party will control the Senate by a hair. It would have with 50 seats — 48 Democrats and two independents who caucus with the party — with Vice President-elect Kamala Harris possessing the power to break ties.

If Republicans win even one seat, Republicans will keep control of the Senate and Biden will start his term with a divided government. In this outcome, the Senate would be led by once again by Senate Majority Leader Mitch McConnell, who opposed boosting the $600 payments to $2,000 in the final days of the current Congress, as well as a larger stimulus package overall.


Will the new Congress pprove another direct payment?

Sarah Tew/CNET

Stimulus checks are popular, but expensive 

In the days leading up to the Jan. 5 runoff, the two Republican candidates, Kelly Loeffler and David Purdue, both reversed course and backed the $2,000 stimulus checks Trump has vocally supported. It isn’t clear what would happen if one or both were elected, but one thing is known — stimulus checks add up.

The IRS said it spent around $270 billion to send the first round 160 million stimulus checks last year but it’s likely that total number, once catch-up payments are added in, is closer to $300 billion. 

Many economists have argued 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,” William Gale, a senior fellow in the Economic Studies Program at the Brookings Institution, said Dec. 16. “Congress needs to allocate more resources — trillions of dollars — for relief and stimulus to support people and businesses.”

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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 large aid packages as the US deficit has climbed. “We have a limited amount of resources,” Republican Sen. John Thune said Jan. 1, arguing against the Senate approving a $2,000 payment. “This is borrowed money.”

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

A group of Republican and Democratic senators who laid the groundwork for December’s bipartisan stimulus package points to a possible path of cooperation between Biden and the next Congress. It is just as likely, however, that Senate Republicans could try to rein in spending if the party retains 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 if Republicans rally behind more austere spending in 2021 and beyond, but smaller aid proposals focused on specific needs — such as an increase in the minimum wage or a third 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 last 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 into their roles over the coming weeks, here’s when you can expect to receive a second stimulus payment, now that it has been approved, and how much you could expect to see in your next  check.

Source link: cnet


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