With Congress out of session for the Thanksgiving holiday, a new analysis from Goldman Sachs suggests that while it is still likely that lawmakers will pass another coronavirus relief bill, its size and scope should reduce the timeframe further. long legislators.
This is in part because of positive data on coronavirus vaccine candidates developed by Pfizer and Moderna, which Goldman research shows will limit the amount of fiscal stimulus lawmakers deem necessary to support the economy until ” widespread distribution of vaccines is possible.
Goldman Sachs analyst Alec Phillips noted in a research note this weekend that after months of delays and inaction, the investment bank now expects Congress to pass a bill. stimulus bill costing about $ 700 billion.
That’s a little more than the $ 500 billion bill that Republicans have indicated they are prepared to support, but significantly less than the $ 2.2 trillion package that House Democrats have passed. in October.
It is possible, Phillips noted, that lawmakers will add short-term extensions of critical relief programs – including expanded federal unemployment benefits – to an omnibus spending bill they are due to pass by December 11. to keep the federal government going, but this is not guaranteed.
“The longer Congress waits to pass new tax measures, the smaller the bill will be,” Phillips wrote.
Unless lawmakers reach agreement on a new bill or extension by the end of the year, a handful of critical relief programs will expire and, as a result, millions of Americans will run out of money. their money will see their enhanced federal unemployment benefits expire and their federal government. End of the forbearance of student loan payments. Pandemic tax credits for businesses will also go off the books, as will a federal moratorium on evictions. Treasury Secretary Steven Mnuchin also announced on Thursday that he would not extend a number of Federal Reserve emergency installations, including a loan program for small and medium-sized businesses not eligible for the popular protection program. paychecks. Mnuchin’s move immediately prompted the Fed’s refusal, although Goldman’s Phillips said the expiration of these facilities “does not significantly change the outlook for stimulus.”
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