New Coronavirus Stimulus Package? Not Anytime Soon…

By Walker Wilkerson Managing Principal of National Assurance Email T. 863.680.5639

Key insights

• The outcome of the January 5, 2021, Georgia election runoff will largely determine if the country could have political gridlock or sweeping change.
• Congress would like to avoid another government shutdown and may be ready to strike a deal.

The U.S. Senate and House of Representatives are back in session and every coronavirus relief idea is on the table. Will any of them stick? While it may seem improbable given the current political divide, there is common ground. Funding economic stimulus and vaccine development and distribution are part of each party’s proposed plan. Now they just need to agree on which programs to fund and the amount.

Many anticipate that the proposal that passes will include another round of $1,200 stimulus checks for those who qualify. Even with all the barriers — including a lame-duck Congress, pending Georgia elections, and the need to pass a government spending bill before December 11 to keep the government running — there is an opportunity. Congress would like to avoid another government shutdown and may be ready to strike a deal in advance of the December 11 deadline. The last spending bill signed by the president keeps the government open through then. Any stimulus package passed during this period is expected to be narrowly focused.

When will we know more?

While headlines regarding the presidential election aftermath are still capturing the nation’s attention, the real battle is being fought in Georgia — with two Senate seats headed for a runoff. Right now, the Senate is scheduled to include 50 Republicans, 46 Democrats, and 2 independents (Sens. Bernie Sanders and Angus King are independents who caucus with the Democrats). The winners of the Georgia runoff election will fill the final two seats.

Republicans have historically held both of the undecided Georgia Senate seats. If Democrats can win both seats, they will take control of the Senate (because the Constitution empowers the vice president to vote on any matter in which the members of the Senate are equally divided). Thus, the outcome of the January 5, 2021, runoff could determine whether the country will have political gridlock or sweeping change.

The uncertainty regarding which party will control the Senate for the next two-year cycle adds to the uncertainty regarding the fate of the current stimulus proposals. If no deal is made in advance of the December 11 government shutdown deadline, don’t count on seeing any agreement prior to the end of the current Congress in January 2021.