Biden's Stimulus Plans Will Be a Hard Sell for Congress

by Christy Bieber | Updated July 25, 2021 - First published on Nov. 17, 2020

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Newspaper headlines about a stimulus plan and a $100 bill.

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Will President-elect Biden's coronavirus stimulus priorities derail the passage of another relief bill?

President-elect Joe Biden has urged current President Donald Trump and Congress not to wait until inauguration day to pass another coronavirus relief bill. He believes Americans need assistance now rather than in several months time. However, deep divisions remain that may very well prevent a relief bill from passing any time soon.

If no stimulus is passed prior to Jan. 21, 2021 when Joe Biden is sworn in, coronavirus aid will almost assuredly be one of the new president's top priorities. There's just one big problem -- some of his key stimulus goals are likely to be met with heavy resistance from Republicans in Congress.

Will Republicans agree to the president-elect's stimulus plans?

President-elect Biden has prepared a list of priorities as part of his transition documents. On that list, Biden indicates he will "secure further immediate relief to working families, small businesses, and communities."

He goes on to list the specific kinds of aid he hopes to offer. This includes, among other things:

  • Financial relief for states, local governments, and tribal governments to prevent laying off essential workers, educators, and firefighters
  • Providing expanded COVID-19 unemployment insurance

These goals sound good, but there's a big problem. Aid to state and local governments and expanded unemployment insurance are two of the key points of disagreement that have prevented the passage of more coronavirus aid legislation thus far.

Lawmakers on both the right and left are united on a few issues. Both sides agree on the need for another relief bill, for example. And they've largely come to consensus on the need for a second stimulus check as well as how much the payment should be for.

But Biden hasn't focused on these points of agreement. Instead, he highlights the importance of state and local government funding. And the issue of how much, if any, relief to provide in this area has been especially contentious.

Proposals put forth by the Democrat-controlled house included close to $1 trillion in aid for state and local governments. In contrast, proposals from the Republican-controlled Senate generally have not allocated any new money to this cause. Instead, the idea is to simply loosen the rules on how local governments can spend existing CARES Act money.

Prior to the election, the Trump administration's negotiators did offer to provide state and local aid as part of a stimulus bill. However, many on the right weren't on board with the president's plans, with numerous Republican senators concerned about the price tag. Some conservative leaders have also specifically voiced objections to state and local aid, arguing that the money would amount to a "bailout of blue states."

Once Trump is no longer spearheading negotiations, Republicans are even less likely to set aside their fiscal concerns if it will give a political win to the incoming Biden administration.

That said, Senate Majority Leader Mitch McConnell might be willing to compromise. Just days after the election, McConnell said a stimulus package was necessary and even allowed for the possibility it could "do more for state and local governments." Back in April, he had suggested he'd rather states go bankrupt than send them billions in federal funds. "There's not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations," he said.

Unemployment has also been a source of conflict, although not to the same extent. Democrats want to provide an added $600 in weekly benefits to the jobless. Republican proposals have offered smaller expanded benefits, tempered by concern that the unemployment benefits some workers received under the CARES Act were higher than their pre-pandemic wages.

Stimulus stalemate could continue into 2021

With two of Biden's top priorities likely to be an anathema to Republicans, passing more coronavirus stimulus won't become any easier after inauguration day. The Republicans are the favorites to control the Senate pending the results of two runoff elections in Georgia in January. If those elections go as most expect them to, the Republicans will keep the Senate Majority. And if President Biden isn't willing to budge, the stalemate on stimulus could continue well into 2021. Unfortunately, Americans hoping to get more COVID-19 money in their bank accounts may need to wait a while.

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