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As Republican and Democratic lawmakers and the Trump administration work on measures that could stimulate the U.S. economy and help workers, analysts say a big stimulus package could pass Congress next week.
Workers and entire industries are hurting and hoping for help from the U.S. government, as Americans cancel travel plans and avoid stores and restaurants because of the COVID-19 pandemic.
Senate Republicans could release a stimulus bill costing $1 trillion as soon as Thursday morning, said Henrietta Treyz, director of economic policy at Veda Partners, in a note.
“While the Senate might stay in over the weekend to continue their work and possibly vote on a bill, the more realistic expectation should be that this will pass next week,” she wrote, adding that it’s also possible that passage might not come until April 2. “Ultimately this package will likely total somewhere in the range of $1.5T once Democratic and Republican priorities are incorporated.”
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Analysts at Beacon Policy Advisors said they are confident that Congress will ultimately pass a robust stimulus package, but they’re “not as confident that it will happen as fast as financial markets are expecting.” U.S. stocks SPX, +1.01% DJIA, +0.99% were rebounding Thursday but have been hammered repeatedly this month by coronavirus-related worries.
The stimulus package that will be proposed by Senate Republicans looks likely to include Trump administration ideas such as a $50 billion lending facility for airlines, $150 billion for other hard-hit sectors and $300 billion for a new program that would provide loans to qualifying small businesses, the Beacon analysts said. There also could be direct payments to taxpayers in two rounds, with $250 billion starting April 6 and $250 billion beginning May 8.
“We nonetheless remain skeptical about this timeline due to the amount of time it will take to process Americans’ information, particularly if the Internal Revenue Service is means testing individuals, as expected,” Beacon’s team said, referring to the planned checks for individuals. “It took approximately two and a half months to start sending out checks when stimulus checks were included in legislation passed during the 2008 crisis.”
Read more: Mnuchin says White House wants $1,000 checks for adults to help during coronavirus fight
And see: Treasury Department proposal aims to deliver $500 billion to Americans starting in April
The best-case scenario is that a stimulus bill passes the Senate by the first half of next week and the House by the end of next week, according to Beacon’s analysts. Their base case is the bill passes the Senate between March 25 and March 31 and the House by April 3. Their worst-case scenario is stimulus legislation doesn’t pass until after April 3, “but even then, only delayed by a week or two,” Beacon’s team wrote.
Democratic lawmakers’ priorities are likely to include “expanded unemployment insurance benefits, mandatory paid leave, student loan reductions and other labor-focused items,” Treyz said.
While airlines, hotels and other industries are struggling, the government should prioritize public health and workers over corporate bailouts, said Senate Minority Leader Chuck Schumer, the New York Democrat, in a speech on the Senate floor on Wednesday. He also criticized Senate Majority Leader Mitch McConnell, the Kentucky Republican, for not doing more to involve Democratic lawmakers in the GOP’s work on a stimulus package.
Read more: Here are the industries that could get coronavirus aid from the U.S. government
“The process that Leader McConnell has outlined for Phase 3 legislation is too cumbersome, too partisan and will take far too long, given the urgency and need for cooperation,” Schumer said. “Phase 3 legislation should be the product of a five-corners negotiation — House and Senate leaders, majority and minority, plus the White House. That’s the way that’s worked the best, the quickest, the fairest in the past. If all parties are in the room from the get-go, the final product will be guaranteed swift passage.”
McConnell, for his part, said Wednesday that Republicans “hope shortly to have a consolidated position along with the administration, then we intend to sit down with our Democratic colleagues and see what we can agree to.”
“I would recommend senators stay around, close,” McConnell added. “Just how long it will take to get through these steps is unclear, but as everyone knows, we are moving rapidly because the situation demands it.”
President Donald Trump late Wednesday signed a coronavirus bill approved by the Democratic-led House and GOP-run Senate that targets paid leave and testing, and that follows an initial $8.3 billion emergency spending plan that came together in early March.
