Economists saw much to like in how President-elect Joe Biden’s $1.9 trillion stimulus plan will attack the pandemic and support the recovery, even if key elements may be inefficient or fail to provide long-lasting relief.
Billions in spending to distribute vaccines and improve testing was seen as a positive, along with expanded jobless benefits. At the same time, widespread direct payments won’t necessarily go just to people who need them the most, and it’s not clear if more ambitious parts of the plan could clear a closely divided Senate.
The plan includes proposals to send $1,400 checks to millions of American households, raise the federal minimum wage to $15 an hour from $7.25 and expand unemployment benefits. The package would also devote about $400 billion to speed Covid-19 vaccinations and school re-openings, and about $440 billion mainly to aid “the hardest-hit small businesses.”
This will be followed by a broader program introduced in February focused on longer-term goals such as infrastructure and climate change.
The initial proposal is “essentially a disaster-relief package,” said Michael Gapen, chief U.S. economist at Barclays Capital. The proposals are “not meant to be changing spending and taxes. Their effect is likely to be more limited in terms of multipliers, and effects on economic activity.”
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