Senate lawmakers are expected to begin debate Wednesday on President Biden’s $1.9 trillion dollar relief package, but the price tag has been a sticking point for many Senate Republicans and even some moderate Democrats.
Some lawmakers on both sides of the aisle want to tighten eligibility requirements for the bill’s $1,400 stimulus checks. Even the U.S Chamber of Commerce is warning the relief bill isn’t targeted enough given the state of the economy and should provide relief to those who truly need it.
Rep. Don Beyer, a Democrat from Virginia, said that’s easier said than done.
“I think everyone would like it to be more targeted, but that's difficult to do,” he told Yahoo Finance Live. “For example, we have the $1,400 economic impact payments, and you know you want the most to go to people who are way behind on the rent or have been unemployed for a long time and needed to put groceries on the table. But how do you efficiently in the short run sort out those from other people who had a bunch of savings before? It was just easier to say some of that is actual relief, a life vest, and some of it is just economic stimulus to fill the output gap in the economy.”
In remarks on the Senate floor Tuesday, Senate Majority Leader Chuck Schumer said the economy is “not strong enough to sustain things on its own. We need strong relief to get the economy going so it can continue on an upward path on its own.That's what this bill is designed to do.”
Still, Neil Bradley, chief policy officer at the U.S. Chamber of Commerce, is urging lawmakers to scale back the relief proposal in the face of growing proof that the economy is on the mend.
Personal income climbed 10% from December 2020 to January 2021 thanks in large part to government stimulus benefits, according to a new analysis from the U.S. Bureau of Economic Analysis. The personal savings rate soared to 20.5% in January as many Americans socked away all or part of their $600 stimulus check.
Even without a new round of stimulus, Goldman Sachs is now calling for the U.S. economy to grow in 2021 at the fastest pace since 1984.
In a letter to lawmakers, Bradley said overspending on relief now leaves less money for other priorities like infrastructure spending.
The overall cost of the COVID-19 relief package is expected to shrink when the Senate picks it up this week. Congress is looking to vote on the relief bill quickly so that it can be signed into law before March 14 — when stimulus from the previous relief package is set to expire.
Beyer said he would still vote for a slimmed down relief package, even if it doesn’t include a hike in the minimum wage to $15 an hour.
“The best Republican offer that President Biden got was $600 billion, which is less than a third of the $1.9 billion that he'd wanted,” said Beyer. “If the proposal comes back with something like two-thirds of it, I think many Democrats in the House would swallow hard and vote yes.”
Alexis Christoforous is an anchor at Yahoo Finance. Follow her on Twitter @AlexisTVNews.