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January 11, 2021

What to expect in Washington (January 11)

President-elect Joe Biden said he will lay out a COVID relief/stimulus bill on Thursday, January 14, telling reporters late last week, “We’re going to be proposing an entire package” addressing issues like unemployment insurance, “the price tag will be high,” and “every major economist thinks we should be investing in deficit spending in order to generate economic growth.” Exact plans aren’t clear, but the reference to “deficit spending” could allude to the Biden campaign’s previous signals that short-term stimulus would not need to be paid for with tax changes.

The President-elect further said, “We’re going to, in the third stage of this – the whole story is we’re going to have to invest, as I suggested throughout the campaign, in infrastructure and healthcare and a whole range of things that are going to generate good-paying jobs that will allow us to grow the economy.” Again unclear, but the “third stage” could be counting the COVID relief in the year-end 2020 legislation as stage 1, the package to be debuted Thursday as stage 2, and larger legislative packages later this year as stage 3.

Reporting on Biden’s Friday remarks, the New York Times said, “Mr. Biden’s economic team is deep into the process of developing proposals for a second stimulus bill and a larger economic package, including spending on infrastructure and tax increases on the rich.”

Direct payments – Senator Chuck Schumer (D-NY), who will become the Majority Leader, and President-elect Biden want to act fast on another stimulus bill to boost the latest round of COVID direct payments to a total of $2,000. Senator Joe Manchin (D-WV), a key centrist given the narrow margin in the chamber, is wary of that approach unless payments are narrow and targeted, and he favors employment-related assistance and job creation through infrastructure investment.

Senator Manchin said on CNN yesterday: “I’m on board by helping people that need help, people that really can’t make it, people that don’t have a job. They can’t put food on their table. I’m in total support of helping them. Sending checks to people that basically already have a check and aren’t going to be able to spend that or are not going to spend it, usually are putting it in their savings account right now, that’s not who we are. We have done an awful lot of that. It's time now to target where the money goes.”

He further said, “Why can’t we just do something that basically puts people back to work? Infrastructure. If you want to spend $2 trillion or $3 trillion, invest it in infrastructure? FDR did it in ‘32…There’s a lot we can do to put people back to work.”

A Biden tweet from last night said: “$600 is simply not enough when you have to choose between paying rent or putting food on the table. We need $2,000 stimulus checks.”

The January 11 Wall Street Journal said Biden views the $600 stimulus checks provided in the year-end bill as a down payment to further relief, and cited incoming Senate Budget Committee Chairman Bernie Sanders (I-VT) as saying, “We have got to move as aggressively as we can …. We don’t have months and months to argue about this thing.”

The story focused on the role of centrists given the Senate’s dynamics: all 50 Democrats (+ the VP) must agree to legislation approved under budget reconciliation, and all those members plus 10 Republicans will be required for Senate passage under regular order. “I hope that the president-elect and the Democrat leadership are willing to discuss legislative solutions to the challenges we have,” said Senator Mitt Romney (R-UT).

In a 60 Minutes interview that aired last night, the chamber’s other independent member who caucuses with Democrats (in addition to Sanders), Senator Angus King (I-ME), when asked if unified government will help or hinder healing from partisan unrest, said: “If the Democrats had 60 and could literally pass whatever they wanted, that would be an entirely different situation. It’s still gonna require bipartisan work. And I’ll tell ya who the real winners are, are people like Susan Collins and Lisa Murkowski – I hope myself, Joe Manchin… Because we're in the middle and can have an influence in both directions.”

House – The House will be in session this week after all. Speaker Nancy Pelosi (D-CA) said in a letter to members that a consent request will be made related to a resolution that “calls on the Vice President to convene and mobilize the Cabinet to activate the 25th Amendment to declare the President incapable of executing the duties of his office;” if objected to, the legislation is planned to be brought up on the floor later with a call for the Vice President to respond within 24 hours; next, they will proceed with bringing impeachment legislation to the Floor.


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For additional information concerning this Alert, please contact:
Washington Council Ernst & Young
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