Victories by the two Democrats in Tuesday's Senate runoff elections in Georgia could mean a third stimulus check for Americans this spring, according to analysts. That would provide crucial financial support for households that this week are receiving $600 payments directed by the most recent relief bill — an effort that has been criticized by both Democrats and some Republicans as doing too little to help struggling families.
CBS News projects that Democrats Jon Ossoff and Raphael Warnock have defeated incumbent Republican senators Kelly Loeffler and David Perdue. The surprise outcome will result in a 50-50 split between Senate Democrats and Republicans, giving Vice President-elect Kamala Harris the tiebreaking vote. That will ease passage of another stimulus relief bill, which President-elect Joe Biden has previously said he supports, according to political and financial analysts.
Another so-called Economic Impact Payment would come on the heels of the most recent relief measure, a $900 billion bill that President Donald Trump delayed and criticized as "ridiculously low." Democrats and some Republicans had supported lifting the checks to $2,000 per person, but the effort failed due to opposition from Senate Majority leader Mitch McConnell.
A big question is whether lawmakers might push for $2,000 or $1,400 cash payments, with the latter representing the difference between the $600 checks and the quashed effort to boost them to $2,000 in the most recent bill.
"We expect growing anticipation that Democrats will pursue additional stimulus, with a $2,000 check (or at least the remaining $1,400) as a leading item," Ed Mills, an analyst with investment bank Raymond James, said in a report following the Georgia election.
Mr. Biden has described the $900 billion stimulus bill passed last month as a "down payment" on a more comprehensive relief package. That could translate into a new package ranging from $1 trillion to $1.5 trillion, according to Heights Securities analyst Hunter Hammond.
A sweetened stimulus package would likely come in March, Hammond and Mills predict. That's because the most recent relief measure extended unemployment programs until mid-March, which puts pressure on Congress to act on additional financial support by that cutoff to continue jobless benefits for millions of unemployed Americans.
Democrats are likely to push for a new round of checks worth $2,000, Hammond predicted, noting that both Mr. Biden, as well as Warnock and Ossoff, had campaigned on the issue. While stumping for the candidates ahead of this week's vote, Mr. Biden said their election would help get $2,000 checks "out the door immediately, to help people who are in real trouble."
Even with previous stimulus aid, 8 million Americans have slipped into poverty during the coronavirus pandemic. Millions of others are experiencing a range of hardships, from food insecurity to trouble paying their bills, after the crisis upended the economy.
The $600 checks issued by the Treasury Department last month may last the neediest Americans no more than six weeks, according to financial-services app Earnin. The firm found that people who had been living paycheck to paycheck and who got the initial 1,200 checks last year spent their money within one week.
Some economists say much more funding is needed beyond the recent $900 billion package to help the economy until coronavirus vaccines are widely distributed, which may not be until this summer or fall.
As much as $3 trillion could be needed to ensure a swift economic recovery, according to the Economic Policy Institute. The left-leaning think tank noted that the most recent stimulus package omitted funding for state and local governments, which have seen a plunge in tax revenue due to the crisis.
Although the stimulus checks are helping households weather the crisis, most economists view other relief measures as more effective — especially programs that target people who are currently suffering a financial hit, such as unemployment benefits. That's because the cash payments are distributed to almost every middle- and low-income household, regardless of whether they have been impacted financially by the crisis.
"Checks are generally less potent in supporting spending than unemployment benefits," wrote Oxford Economics chief U.S. economist Gregory Daco in a recent research report. He added that the $900 billion relief bill "will likely fall short of what is needed to prevent a rough winter."