Via Goldman:
President-elect Biden is proposing $1.9 trillion in new fiscal relief measures, in addition to the roughly $950bn Congress approved in December 2020.He has proposed substantial spending in all of the areas we expected, including an additional $1,400/person in stimulus payments, further extension of expanded unemployment benefits (through September 2021 and including a $400/week top-up payment), state fiscal aid ($370bn in direct aid plus a number of indirect measures), and public health funding ($190bn). He has also proposed $170bn in new funds for schools to respond to COVID-19, expansion of the child tax credit and earned income tax credit (we expect these would cost around $150bn), and extension of health insurance premium subsidies (the cost is unclear but could be similar to the roughly$100bn cost of the May 2020 House Democratic proposal).
2. The proposal faces hurdles in Congress. Biden transition officials and congressional Democrats have indicated they hope to pass this proposal via regular order, not the budget reconciliation process. This means that it would need 60 votes in the Senate, and therefore the support of at least 10 Republicans. We do not expect ten Republicans to support a $1.9 trillion relief package. While Democratic leaders might use the budget reconciliation process to circumvent potential republican opposition, there are two arguments against doing this. First, recent political events put a greater premium on finding areas of bipartisan support, if possible. Second, the reconciliation process has never been used before to pass discretionary spending, and it appears that around half of the proposal—state fiscal aid, education grants, public health spending, to name a few areas—falls into this category. While it is possible that congressional Democrats might find a way to do this, it looks more likely that the need to find bipartisan support might constrain the size of the package.
