Democratic Control of Congress Sets Stage for $2,000 Stimulus Checks

Democratic Control of Congress Sets Stage for $2,000 Stimulus Checks

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Democrats are set to take control of the U.S. Senate, House and presidency, paving the way for Joe Biden to bring his legislative agenda to life and reshape the American economy.

Following runoff elections in Georgia this week, the Democrats and Republicans will each have 50 votes in the Senate. The even split would give Democratic Vice President Kamala Harris the tiebreaking vote on some bills, but centrists like West Virginia’s Joe Manchin could break ranks and derail some progressive policies. What’s more, some laws need 60 votes to pass.

Biden was recognized by Congress as the next president early Thursday following a day of violence at the U.S. Capitol when pro-Donald Trump mobs breached police lines and entered the building. Here are some of the key issues related to personal finances that Biden and the Democrats are likely to take up once they formally assume power.

Putting money directly in people’s wallets as a response to the financial fallout from the coronavirus crisis will be Biden’s top priority as he begins his first term. While campaigning in Georgia before the runoff elections, he vowed that $2,000 stimulus checks would be sent out “immediately” if Democrats won the state.

Democrat Raphael Warnock, who defeated Republican Kelly Loeffler in Georgia for a Senate seat this week, said that getting the checks approved would be his first priority upon arriving in Washington. “We ought to pass the $2,000 stimulus relief and give ordinary struggling people who are just literally trying to keep their head above water what they need, so that we can begin to get the economy going again,” he said on CNN Wednesday.

The fastest way for Democrats to pass $2,000 stimulus checks would be to bring the bill to the Senate floor for a vote, something that Republican Majority Leader Mitch McConnell blocked in December. While the bill would need support from 60 Senators in order to bypass a filibuster, some Republicans have already publicly signaled they would be on board.

Still, lawmakers might pare back the scope of the payments to ease concerns that high-earners not affected by the pandemic would get sizeable payouts. Unemployment benefits that are set to expire in mid-March would likely get extended, while states would receive additional funding for Covid-19 vaccine rollout and testing.

Goldman Sachs Group Inc. raised its growth forecasts for the U.S. this year, predicting that the economy would expand 6.4% this year, versus the 5.9% it previously projected. The increase was driven by expectations that Biden will be able to deliver a fiscal stimulus package of $750 billion this quarter, $300 billion of which will be in the form of checks to households. The slow pace of Covid-19 vaccinations may still slow the spending boost, the bank cautioned.

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