Third stimulus check update: Democrats’ strategy becoming clear

1/31/21 Update:

It’s possible that next week could be the week that we see some action on President Biden’s $1.9 trillion relief plan that includes $1,400 stimulus checks.

“We have learned from past crises that the risk is not doing too much,” Biden said. “The risk is not doing enough.”

While Democrats want to move quickly, they are still getting met with resistance from lawmakers on the other side of the aisle.

“Too much of the money is not directly going to the people who need it the most,” Sen. Roger Marshall said.

Marshall’s issue, like many Republicans, is with the $1,400 stimulus checks, minimum wage increase, and the billions of funds allocated for local and state governments.

Biden has already indicated that he is open to negotiating eligibility requirements for the stimulus checks, including making them more targeted for lower income Americans.

There is new data that backs up this targeted approach by showing that families making more than $75,000 don’t actually need the funds and are putting the cash into savings.

Meanwhile, those making under $75,000 are likely to spend the money and stimulate the economy.

But in order for that targeted approach to come into fruition, there would have to be negotiations between Democrats and Republicans.

Thus far, key Democratic leaders like Nancy Pelosi don’t seem to be showing a desire to get into another protracted negotiation battle.

In fact, they have already begun to draft the budget reconciliation bill that would essentially bypass the needed votes from the GOP.

I’m sure the experience of going back-and-forth for months and months during the fall and summer took a toll on many Democrats (as it did on all of us).

Now that they have a way to pass these measures without bipartisan negotiations, I’m sure it is very tempting to go that route.

It seems like Democrats will attempt to work with Republicans but their patience is going to be very limited if I had to guess.

Right now, experts are predicting that February could be the earliest we would see a package approved and some even speculate that it could be mid-March.

A standalone provision containing stimulus checks could pass before the larger more comprehensive package is passed, but according to some statements from Democrats, it doesn’t seem like they are interested in a piecemeal solution.

“We’re not going to do this in a piecemeal way or break apart a big package that’s meant to address the crisis we’re facing,” White House press secretary Jen Psaki said.

There are also the Trump impeachment proceedings that are expected to start in the next few weeks. If the stimulus deal is not ironed out before those proceedings begin, there’s a chance that things could be pushed well into March.

Someone lawmakers insist that the impeachment proceedings will not be a distraction to focusing on coronavirus relief but if the Supreme Court justice confirmation hearings are any indication, I don’t think that’s true.

So ultimately it looks like next week will be a pretty important week and give us a strong indication of the route Democrats plan on taking. If I had to guess they will attempt negotiations but quickly go to budget reconciliation routes if they get met with too much resistance.



1/29/21 Update:

Yesterday, Democrats rejected a Republican proposal to break up the $1.9 trillion coronavirus rescue plan into smaller pieces.

This is a pretty huge move that I believe is very telling regarding the Democrats’ strategy.

There’s been a lot of talk about “pruning” the current $1.9 trillion proposal and going with more targeted aid for items such as stimulus checks.

While we have not seen concrete figures proposed, many experts have predicted that the actual size of this proposal would be closer to $1 trillion (which seems in line with prior discussions).

Indeed, Biden has been pretty vocal about his interest in negotiating and his openness to things like income limits for stimulus checks.

There also has been talk about breaking up the items in the stimulus package so that some of the most important components like the vaccine distribution can be passed immediately.

But by rejecting this pitch to divide up the stimulus bill up, Democrats are sending a strong message that they might aggressively pursue the passage of this large stimulus bill by any means necessary.

That would of course include the budget reconciliation method which would only require 51 votes in the Senate to pass.

So it is no surprise that, in a bit of a power move, Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi are reportedly already drafting the reconciliation bill.

Senate GOP members are reportedly warning Democrats that they are making a big mistake by loading up this bill and trying to pass it without their support.

If Democrats do choose to go the reconciliation route, it feels like it would be a step back from the unity approach that the Biden administration has been harping on.

I don’t think we know for sure that Democrats will take this route based on other reports that indicate President Biden is having good conversations with Republican members of the Senate like Sen. Susan Collins of Maine, who is leading the bipartisan effort.

“We both expressed our shared belief that it is possible for the Senate to work in a bipartisan way to get things done for the people of this country,” she said.

It’s worth noting that White House press secretary Jen Psaki said that although Biden wants a bipartisan package, the Biden administration is opposed to breaking up the bill to win over Republican support.

“We’re not going to do this in a piecemeal way or break apart a big package that’s meant to address the crisis we’re facing.”

So it’s looking like the Democrat approach is to try to negotiate a little bit but if negotiations do not play out just like they planned, they will resort to the reconciliation method to ensure the passage of their bill.

It’s a sure fire way to get things passed but going this route will likely come at a cost that we will see play out over time.




For those wondering when to expect the next round of stimulus relief to arrive, we are getting some more intel to answer that question.

Goldman Sachs analyst Alec Phillps projected that Congress will pass another round of stimulus relief between mid-February and mid-March.

So at a minimum we are likely looking at a one month negotiating process.

The IRS is now capable of getting payments out in about one week so in this scenario we could see the third round of stimulus checks start to go out anywhere from late February to late March.

Phillips also weighed in on whether or not 10 members of the GOP would get on board with this current proposal. The number 10 is very significant because that will put 60 senators in support of the stimulus bill so long as all Democrats are on board (which by the way is not a given).

“We do not expect 10 Republicans to support a $1.9 trillion relief package,” Phillips wrote.

That’s not a shocker considering how things have gone over the last few months with Republicans.

The big question will be how high will 10 Republicans be willing to go to agree to a stimulus package?

And will that number allow for large stimulus checks?

Experts are currently predicting that the legislation would end up costing about $1.1 trillion which would be enough to include $1,400 stimulus checks so I still like the odds of these checks going out.

The other issue to be on the lookout for is the effect of the impeachment

Reportedly, the Trump impeachment trial is set to start the week of February 8.

So ideally, negotiations for the next stimulus package would be resolved prior to that impeachment trial.

But if that does not occur then we could see the impeachment proceedings potentially interfere with finalizing a stimulus deal which would obviously be extremely unfortunate.



Now that Joe Biden has been sworn in as the US president, the attention will shift to his first actions in office.

There are a series of executive orders that he has already begun to work on but one of the biggest issues is the next stimulus package.

In particular, the third round of stimulus checks is going to be a major topic of discussion.

So where do things currently stand and when can you expect to receive that third stimulus check?

We know that the Biden proposal contains a third stimulus check in an amount of $1,400.

While there was some confusion about a $2,000 stimulus check, it seems that Democrats preferred to issue out a $1,400 check that together with the $600 check (already issued) comes out to $2,000.

If you were counting on seeing those additional funds, you may want to cut back your excitement for the moment.

It is still not a given that these $1,400 checks will be passed.

Many lawmakers are not on board with more stimulus checks and some like Sen. Pat Toomey, R-Pa., said Biden’s plan “would be a colossal waste and economically harmful.”

There are also a lot of lawmakers talking more about a targeted approach when it comes to distributing funds to Americans.

Remember, most likely at least 10 Republicans will need to support the relief package in order for it to pass.

You definitely cannot take it for granted that 10 Republicans will support a $1.9 trillion package or even additional $1,400 checks.

You also can’t take for granted that every Democrat will get on board with the stimulus proposal so it’s possible that even more Republicans will need to support such a measure.

We should also remember that the $1.9 trillion package as a starting point.

Biden’s press secretary Jen Psaki stated, “The package was designed with the $1.9 trillion as a starting point. This is a discussion, it’s a conversation, and [Joe Biden] is no stranger to the process of bill making … Rarely does it look exactly like the initial package that is proposed.”

It’s very possible that we might start to hear more about specific targeting measures that would limit who can receive a third stimulus check.

Of course, there was also talk about doing that with the second round and that never materialized.

Some people have predicted that a third round of stimulus checks could go out in February or perhaps early March but it’s possible that another protracted battle could ensue in Congress.

If that does happen, I’m hoping that lawmakers will break up the proposal so that certain measures like aid for a vaccine distribution can go out ASAP.

Based on reports I’ve seen, that might be a possibility.

A standalone bill for stimulus checks is not off the table either.

While we don’t know what will happen, we know that the stimulus bill is at the top of the priority list for Democrats so we can expect to start hearing details about the progress of that bill very soon.



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