Joe Biden Calls for $1.9T Relief, $1,400 Individual Checks
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- President-elect stresses the need for another relief package
- Major US indexes dip slightly
President-elect Joe Biden announced on Thursday that he will ask Congress for $1.9 trillion in immediate relief funding to help the US economy get back on track as the pandemic rages on. The $1.9 trillion stimulus package includes cash payments, funding for the vaccination program, and overall Covid-19 management, among other expenses. However, it will be difficult for the package to pass the Republican resistance due to the spending on Democratic priorities such as expenses on state and government. Moreover, the proposal calls for a total of $2,000 in direct payments to Americans, meaning an additional $1,400 to the already approved $600. This proposal has already faced opposition from the Republicans. Other Democratic priorities such as extended jobless benefits of $400 per week through September, as well as raising the minimum wage to $15 per hour present significant hurdles as some of the measures are likely to need 60 votes in the Senate. The upper chamber will have a 50-50 partisan split.
President-elect Biden’s proposal would include $400 billion for Covid-19 management, more than $1 trillion in direct relief payments, and $440 billion for communities and businesses. The total of $1.9T is more than double than the bipartisan bill approved in December, $900B, and nearly the same as the March 2020 Cares Act, $2.2T.
“We have to act and we have to act now,” Mr. Biden said with a sense of urgency when unveiling the relief plan Thursday night in Wilmington, Delaware. In addition to the current proposal of $1.9T, President-elect Biden intends to lay out a second, broader plan next month as part of his legislative agenda focused on long-term goals related to infrastructure and climate change.
Figures Highlight the Need for Fiscal Stimulus
Earlier on Thursday, the latest weekly jobless claims confirmed the need for fiscal stimulus as the figures showed 965,000 Americans have filed for state benefits, the most since August. Compared to the previous number of 784,000, this week’s data highlights the slowdown in hiring as many states are under pandemic restrictions and many businesses are closed. The total number of people receiving benefits declined to 18.4 million from 19.2 million in the previous report. However, the number remains well above pre-pandemic levels.
Last week’s alarming jobless claims for unemployment insurance came after December’s disappointing nonfarm payrolls. The US economy lost jobs for the first time in eight months during December. A decline of 140,000 jobs was registered while the unemployment rate remained unchanged at 6.7%.
Markets reacted little on Thursday to both the jobless number and Joe Biden’s speech. The major US indexes closed modestly in the red. The S&P500 slipped by 0.38%, or 14.30, and closed at 3,795.54 points. The Dow Jones Industrial Average closed lower by 0.22%, or 68.95 to 30,991.52, while the Nasdaq Composite was relatively unchanged, down by 0.12%, or 16.31 to a close of 13,112.64 points. Stock futures on Friday also point to a negative open in the premarket hours as the European trading session unfolds. Markets across Europe open into negative territory as benchmark European indexes decline by 0.50% at the open.
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