A few Senate races in Georgia could determine the fate of a $ 3.4 trillion stimulus plan

  • The form and scope of a stimulus plan are at stake during Georgia’s January 5 layoffs.
  • “It’s everything,” said policy expert Heidi Schierholz in an interview.
  • A narrow Democratic majority in the Senate could use a legislative maneuver to pass a $ 3.4 trillion coronavirus plan without Republican votes.
  • Visit the Business Insider homepage for more stories.

President-elect Joe Biden is on track to take office on Jan. 20, but the balance of power in Washington is still unresolved with a few reruns from the Georgia Senate, just two weeks before Biden’s inauguration.

In one race, Democrat Jon Ossoff will challenge Republican Senator David Perdue, while Republican Senator Kelly Loeffler will challenge Democrat Raphael Warnock in the second round. The results will determine which party the Senate controls in an extraordinary period of public health and economic challenges – and how many federal dollars will be pumped into the economy early next year.

The scope of another economic aid package is on the ballot as Georgians voted on January 5. Democrats and most Republicans agree one is needed, but they’ve been in conflict for months over the size and level of federal support needed to sustain an economic recovery, many economists say it’s weakening. Unemployment claims rose last week for the first time since early October.

Neither side has conceded since Biden defeated President Donald Trump in the Nov. 3 election, and the gap between the two parties may only be widening during the lame-duck session. The president-elect this week praised the expanded Heroes Act passed by the House in May, even though Republicans have dismissed it as a progressive wish list for months.

Now Democrats are hoping to win both races in the state and get a worn-out majority, forcing Vice President-elect Kamala Harris to cast a casting vote. In that scenario, Democrats could use a legislative maneuver to implement pandemic relief and other tax and spending measures with a simple majority and no GOP votes.

“It’s all about incentives,” Heidi Schierholz, policy director of the left-wing Economic Policy Institute, told Business Insider. “It’s all, because if there is a democratically controlled senate, they will be able to get a significant package through reconciliation.”

She continued, “Without it, it’s up to the Senate Republicans about what any aid package might look like. They have given enough signals where they are at that point. ‘

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The GOP supports a much smaller contingency plan than the $ 3.4 trillion package that the Democrats and Biden are seeking. Republicans continue to push for a leaner $ 500 billion measure they implemented twice in September and October, despite a recent spate of virus cases across the country that are pushing states to correct restrictions and corporate closures.

Ossoff recently criticized Perdue for backing the plan, which would cut federal unemployment benefits from the previous $ 600 a week to $ 300 and not make direct payments.

Senator David Perdue fought $ 1,200 worker incentive checks and led the fight to lower unemployment insurance – while at the same time giving billions to his corporate donors, Ossoff said. in a tweet earlier this month. He is earlier expressed support for many of the provisions of democratic law, including the introduction of an expulsion moratorium and assistance to tied state and local governments.

Democrats were in favor of robust federal action during the pandemic, especially progressives.

“Can we please people get incentive checks and mortgage deductions and rent forgiveness and support for small businesses and free testing and risk related payments and health care for the uninsured (and underinsured) in the midst of a pandemic or is that too socialist?” Democratic Rep. Alexandria Ocasio-Cortez said on Twitter last week.

But regardless of the outcome in the hotly contested races, Democrats can be forced to backtrack their ambitions. Elizabeth Pancotti, senior policy adviser for Employ America, a nonprofit, told Business Insider that Democrats may need to capitalize on “middle of the road, conservative Democrats” by cutting the price tag of pandemic relief legislation next year.

“Should Georgia go in favor of the Democrats, I think there will still be concessions because there will be only 50 votes,” she said. “If they lose Georgia, I think they are really expensive items, like the $ 600 federal unemployment benefit. Where would a round or two of it be? [stimulus] controls, the phase-out may be lower. “

Biden has campaigned to raise taxes on wealthy individuals and businesses, an agenda Republicans will almost certainly block if they stick to the Senate.

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