With ballots still being counted and results in key states being challenged, the results of the presidential election remain unclear, but there’s one thing voters can count on: the status of a second stimulus package will change no matter who is president for the next four years.
Both Republicans and Democrats had proposed new stimulus measures, both of which included another round of stimulus checks and enhanced unemployment benefits for laid-off workers. But the parties failed to reach a compromise before the Nov. 3 election.
As the situation stands now, millions of Americans will be cut off from a wide range of financial assistance programs designed to help people stay in their homes, stay current on their student loans, keep their lights on and meet other financial obligations. Many of those programs are scheduled to end on or before Dec. 31.
Senate Majority Leader Mitch McConnell said Wednesday that “we need another rescue package.”
“The Senate goes back into session next Monday. Hopefully the partisan passions that prevented us from doing another rescue package will subside with the election. And I think we need to do it and I think we need to do it before the end of the year,” McConnell said.
McConnell won his reelection bid late Tuesday night. It is not yet clear whether he will preside as the Republican minority or majority leader of the Senate for the upcoming year with several Senate races undeclared as of Wednesday afternoon.
Shortly before Election Day, House Speaker Nancy Pelosi was in discussions with members of the Trump administration in a final push to nail out a stimulus package to address the pandemic-induced economic downturn before lawmakers left Washington.
Democrats stood firm on a $2.2 trillion package, trimming more than $1 trillion from the HEROES Act that they passed in May. In mid-October, President Donald Trump said he authorized Treasury Secretary Steven Mnuchin to go above the $1.8 trillion offer the White House had previously made.
If Republicans maintain control of the Senate and Democrats control the House of Representatives, here’s how a stimulus package could change under a Biden or Trump presidency.
What to expect if President Trump is reelected
When stimulus talks were put on hold, Trump said that if he wins a second term, America will “get the best stimulus package you’ve ever seen, because I think we’re going to take back the House.”
But Harry Holzer, a public policy professor at Georgetown University, isn’t confident that Trump would make a fervent post-election push for the $1,200 stimulus checks Americans received beginning in April as part of the CARES Act.
“One of his big interests in the package before was he liked sending people out those stimulus checks with his name on it,” he said, adding that “the incentive now is much weaker for him” to push for stimulus checks.
Trump is also more likely to side with McConnell for the remainder of his presidency, be it the next four years or until Inauguration Day.
McConnell has spoken out against spending more than $500 billion, the price tag of the stimulus package, known as the HEALS Act, that he unveiled in July that failed to pass in the Senate. He has also insisted that a stimulus package include liability protections for businesses, schools and health-care providers from coronavirus litigation.
In contrast, there is also the belief that “Senate Republicans would most likely be more open to further stimulus if President Trump remained in office than if Biden prevails,” wrote strategists at TD Securities, in a Wednesday morning note.
The size of the package, they said, is “likely to be much smaller than Democrats have been proposing,” and could range between $1 trillion to $1.5 trillion.
What to expect if Joe Biden is elected
Former Vice President Joe Biden would likely push for a stimulus package that mirrors the $3 trillion HEROES Act, Holzer, a senior fellow in economic studies at the center-left Brookings Institution, told MarketWatch.
The HEROES Act “represents the consensus of what Democrats want: another bump up on employment insurance, state and local aid and assistance to schools,” he said.
That would also mean a second round of stimulus checks.
The Biden campaign has called the $1,200 stimulus checks (plus an additional $500 per child) that millions of Americans received under the CARES Act a “good start.” But Biden would also “provide for additional checks to families should conditions require,” his campaign website stated in a post that was updated on Wednesday morning.
Biden would have an uphill battle with a Republican-controlled Senate.
“Every time a Democrat’s in the White House, all of a sudden the Republicans find religion on fiscal conservatism, which doesn’t usually exist there before,” said Holzer.
“Senate Republicans would most likely not support a major fiscal stimulus package,” strategist at TD Securities said. “House Democrats would likely have to accept a package that is much smaller than they have been holding out for.”
The strategist added, “We expect there would be a package of $500 billion to $1 trillion.”