In a note to clients last week, Goldman Sachs analyst Alec Phillps projected that Congress will pass another round of emergency aid sometime between mid-February and mid-March. Phillips said the timing ultimately hinges on several factors, such as Donald Trump’s Senate impeachment trial and whether Democrats use a process known as budget reconciliation to pass the relief measure using their slimmest-possible majority.
“We do not expect 10 Republicans to support a $1.9 trillion relief package,” Phillips wrote.
Once Congress approves the bill, Biden needs to sign the legislation to release the money. The IRS and Treasury Department would then distribute the cash payments through direct deposit, mailed checks and prepaid debit cards.
The federal government took about two weeks to start distributing the first round of $1,200 payments in April, and about one week to send the second round of checks, worth $600, in January. Assuming Congress passes the relief bill in mid-February to mid-March, Americans could expect to receive the money anywhere from late February to late March.
While top Democrats endorsed Biden’s stimulus proposal, a number of deficit-weary Republicans have said the aid package is too expensive, foreshadowing a looming battle between lawmakers over federal spending. On Tuesday, during Janet Yellen’s confirmation hearing to be Treasury secretary, Sen. Pat Toomey, R-Pa., warned Biden’s plan “would be a colossal waste and economically harmful.”
Phillips said the expects the legislation to end up costing about $1.1 trillion, including $200 billion for state and local governments, compared with the $370 billion proposed by Biden. Goldman also expects the legislation to include a third $1,400 stimulus check, as well as additional funding for supplemental unemployment benefits.
Heights Securities analyst Hunter Hammond forecast an 85% chance that a scaled-down package — widely expected to include a third cash payment — is passed in the first three months of 2021.
“We believe there is support for a smaller package that includes the $1,400 checks, more health care funding, support for small businesses, and some state and local aid,” Mills said.
Although most bills need to achieve a 60-vote threshold in order to advance in the Senate, Democrats could use a process known as budget reconciliation to pass the measure using their slimmest-possible majority.
Biden has indicated that he wants the legislation to receive the bipartisan support necessary to pass in the upper chamber, but his press secretary, Jen Psaki, told reporters on Wednesday that “we are not going to take any tools off the table.”
Democrats will control the Senate by the thinnest of margins after twin victories by Jon Ossoff and Raphael Warnock in the Georgia runoff elections last week clinched the party a 50-50 split in the upper chamber, with Vice President-elect Kamala Harris able to cast a tie-breaking vote. Democrats hold a slim 222-to-211 advantage in the House.
There are limits on what legislation qualifies for reconciliation and how frequently the process can be used.