President-elect Joe Biden on Friday called for trillions of dollars in immediate further fiscal support, including increased direct payments, after a surge in coronavirus cases caused U.S. payrolls to drop for the first time since April.
“The price tag will be high,” Biden said of his planned package in Wilmington, Delaware. He promised to lay out his proposals next Thursday, before taking office on Jan. 20. “It will be in the trillions of dollars.”
Biden invoked images of the unemployed waiting in long food lines and added a dire warning: “If we don’t act now, things are going to get much worse and harder to get out of a hole later.”
Biden made the call for new assistance — including boosting stimulus checks to $2,000 — after an unexpectedly poor December jobs report that reflected a plunge in restaurant employment. The 140,000 slump in payrolls highlighted how surging coronavirus infections are taking a greater toll on parts of the economy.
While the Democrats are set to control both houses of Congress after Biden takes charge, private economists see any new stimulus package falling short of multiple trillions of dollars. The 50-50 partisan split in the Senate will make a more ambitious proposal challenging to pass, testing the new president’s sway over lawmakers from his party and his ability to influence Republicans.
Democratic Senator Joe Manchin, a West Virginia moderate, said Friday that if there’s another round of direct payments to individuals, it “should be targeted to those who need it.” An earlier report said he flat-out opposed boosting stimulus checks from the $600 approved in a December Covid-19 relief package, sending stocks falling on Friday.
Equities started recovering after Bloomberg News reported that Manchin planned to review Biden’s proposals, and extended gains following Biden’s comments. The S&P 500 Index closed up 0.6%, at a record high. The fluctuations showcased investor sensitivity to news about the next fiscal initiative.
Incoming Senate Majority Leader Chuck Schumer said earlier this week that boosting the stimulus payments to $2,000 would be his first goal once Democrats secure control of the Senate.
The Labor Department’s report Friday showed the U.S. unemployment rate at 6.7% in December, halting a string of seven straight monthly declines. The figures underscored that the economy weakened at the end of 2020 as the pandemic raged and the impact of the roughly $2 trillion March fiscal stimulus package faded.
President Donald Trump signed a $900 billion relief bill last month, which included supplemental unemployment benefits extended to mid-March — a timeframe that could serve as a deadline for lawmakers to move on the next package. That bill didn’t include aid for state and local authorities, which was blocked by outgoing Senate Majority Leader Mitch McConnell and fellow Republicans.
Biden on Friday reiterated that last month’s aid bill was just a “down payment” on what’s still needed. In November he favored something “like the Heroes Act” that House Democrats had previously proposed. That bill was originally about $3.4 trillion, in May. By October, Democrats had trimmed their demand to $2.4 trillion.
“People are lined up for miles in their automobiles waiting to get a meal to put on the table for their family,” Biden said at the news conference on Friday. The president-elect also called for a federal minimum wage of $15 an hour, a long-time Democratic priority that’s likely to run into a challenging political calculus.
Biden touted a Moody’s Analytics study from last year that had compared his versus Trump’s economic proposals, and showed his plan would generate millions more jobs than his opponent.
In the wake of Democrats’ victories in Tuesday’s two Georgia runoff elections to the Senate — which ensure the party’s control of the chamber — JPMorgan Chase & Co. predicted a new stimulus package worth $900 billion; Goldman Sachs Group Inc. said it expected about $750 billion in new aid; and Bank of America Corp. analysts projected a bill in the “ballpark” of $1 trillion.
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