President Joe Biden had hoped a vast Coronavirus relief package would pass in Congress before the end of March. With it now clear that Republican lawmakers simply aren’t on board, it could take much longer before more federal funding becomes available for social programs and direct aid to families.
Republicans have heavily criticized the $1.9 trillion proposal. Here are the details that investors need to know.
Republicans United in Opposition to COVID-19 Relief Bill
GOP lawmakers in both the House and Senate are united in their opposition to the Biden-led COVID-19 relief bill. Democrats have majorities in the House and Senate, but these are razor-thin, and some Republican support will be needed to push any future laws through to Biden’s desk.
The House had been hoping to vote and push the $1.9 trillion spending bill through to the Senate this Friday. However, with no support from the opposite side, Democrats may likely wait or renegotiate some of the details of the package.
House Minority Leader Kevin McCarthy was vocal about his opposition to spending so much on Coronavirus relief. Speaking this week, he said that he hasn’t “seen a Republican that’s found something in there that they agree with.” McCarthy called the bill “Too costly, too corrupt, and too liberal.”
Chuck Schumer, the Senate Majority leader, said that the bill provides support for work, schools, and health and that the funding would spread to individuals as well as local and state governments. Schumer said that “If congressional Republicans want to oppose all that, my response is: Good luck.”
Minimum Wage Provision is a Sticking Point
The proposed bill contains language to ensure that the federal minimum wage is increased to a minimum of $15 per hour over the next five years. Republicans are strongly opposed to increasing the mandated minimum wage.
Elizabeth MacDonough, the Parliamentarian of the United States Senate, is currently deciding on whether the provision to increase the federal minimum wage can be included in the bill. The Federal minimum wage peaked at $7.25 in 2009 and hasn’t changed since.
The bill also includes provisions for $1,400 direct checks to Americans, funding for vaccines and COVID-19 testing, and emergency jobless benefits and tax payment cuts.
New Stimulus Could Invigorate the Markets
The markets have been rallying largely despite the ongoing Coronavirus Pandemic. However, more stimulus could be a boon for stocks. Investors should watch the developments closely. A federal injection of cash into the economy could be particularly beneficial for the stocks of consumer-facing corporations.
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