Biden outlines $1.9 trillion pandemic relief plan
The President-elect Joe Biden has announced a $1.9 trillion plan named the "American Rescue Plan" to aid consumers, businesses, protect jobs, and control the escalating pandemic. This plan, released on President-elect Biden's "Build Back Better" website, includes another $1,400 per person, along with housing, nutrition, unemployment, and other assistance.
The proposals of the "American Rescue Plan" will be discussed and deliberated by the United States Congress, specifically in both the Senate and the House of Representatives. Key legislative leaders, including the Senate Majority Leader, Speaker of the House, and relevant committee members, play significant roles in the process.
The $160 billion of the plan will be used for a national vaccination program, a crucial step towards bringing the COVID-19 pandemic under control, as stated by Jim Baird, chief investment officer at Plante Moran Financial Advisors. Baird highlights that the durability of the economic recovery remains in question until the pandemic is brought under control.
Biden has pledged to administer "100 million shots" by the end of his first 100 days, a commitment aimed at accelerating the vaccination process. However, the ongoing pandemic and the breakdown in vaccine distribution logistics have caused the virus to continue to rage.
Ike Boruchow, Senior Analyst at Wells Fargo, believes that the added relief signed in the final days of the year is generating a more powerful top-line benefit compared to the earlier period, and could further benefit retailers if passed by Congress. His comments indicate that the added relief is fueling consumer spending.
In a recent statement, Federal Reserve Chairman Jerome Powell called the pandemic relief packages from March and April "by far the largest and most innovative fiscal response to an economic crisis since the Great Depression." The plan also proposes a minimum wage of $15 per hour.
The National Retail Federation has hailed the plan, stating that there is unanimity in the recognition that all must work together to overcome the challenges brought about by COVID-19. Baird states that the answer to the duration of the economic recovery lies in the COVID case and vaccination data. So much of the potential benefit for retailers rides on reining in the virus.
The plan, widely credited with staving off further economic fallout from the pandemic last spring, including the CARES Act, is a testament to the government's commitment to supporting the economy during these challenging times. However, no further information is provided about the timeline for the implementation of the plan. The question, as Baird puts it, is how long it will take to emerge from the other end of the tunnel, depending on the COVID case and vaccination data.
