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22 Dec 2020
3 min read

US Lawmakers Strike a Deal on $900bn Stimulus Bill

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Written by OspreyFX News Team

US Lawmakers Strike a Deal on $900bn Stimulus Bill

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Key Takeaway

  • Stimulus package finally approved after prolonged deadlock
  • Data for the country illustrates a deteriorating economic scenario

US Senate leadership announced the approval of nearly $900bn in virus relief aid. The stimulus package includes funding for small businesses and direct payments to individuals affected by the coronavirus pandemic. The deal was reached late on Sunday after months of standstill during the relief package negotiations.

The US economy has recently begun to falter with declining economic data coming from the Labor Department. In light of this, US lawmakers were involved in intense round-the-clock negotiations for the last week. Finally, on Sunday, Republican Senate majority leader Mitch McConnell reported the approval of nearly $900bn. On the other end, Nancy Pelosi, the Democratic speaker of the House, and Chuck Schumer, the Senate Democratic leader, praised the revival of the stimulus programs that started in March, while also expressing confidence that more help will be offered to Americans once Joe Biden enters the White House. Democratic President-elect Joe Biden has also confirmed that he will be pushing for a more encompassing stimulus package as one of the top priorities for his administration. Mrs. Pelosi and Mr. Schumer agreed on Sunday that the package deal was an important first step towards the Democratic approach “to meet the remaining needs of the American people during this historic health and economic crisis”.

More Financial Help is on the Way

“We can finally report what our nation has needed to hear for a very long time. More help is on the way,” Mr. McConnell said late on Sunday when making the official announcement. The deal includes an extension of the Paycheck Protection Program (PPP) by $284.5bn. The PPP is intended to provide funding for small businesses in the form of loans to keep their workers on the payroll. The Covid-19 relief bill also expanded funding for pandemic-related federal unemployment programs and the add-on payments for the jobless by $300 per week for 11 weeks. Additionally, the package offers direct payments to individuals, $600 stimulus checks per adult, half of what was offered to Americans in the first coronavirus stimulus bill. The package will also direct $80bn of funding to help schools and universities, $25bn in federal support for renters, and $13bn for the Supplemental Nutrition Assistance Program.

The Covid-19 relief package is the second one approved by US lawmakers intended to bolster the US economy. The implementation of the first package commenced in March when the first wave of the coronavirus pandemic rattled the country. It is envisaged that the disbursement of funds will start by late December. The House and Senate had to approve a one-day extension of government funding to allow the bill to be written and passed.

On the vaccination front, the country will probably miss its target of 20m people vaccinated by the end of the year. Washington officials warned that the plan will most likely backfire as there are not enough doses across the states. This is due to the fact that additional time is required to examine the doses once they have been produced. The plan to distribute the vaccine to 40m people in January is also being questioned.