Stimulus Bill to Land in Senate, US Futures Markets Rise
03 Mar 2021 · 3rd Party Analysis
- Senate to begin debating over the bill as soon as today
- President Biden relies on full support from Senate Democrats
President Joe Biden continues to push for the passing of his stimulus proposal, the number one economic priority on his agenda. Mr. Biden’s bid to provide the US economy with an additional $1.9tn, on top of the financial stimulus that has already been injected, is set to land in the Senate this week. Lawmakers are still haggling over the proposal as it contains measures that are not deemed acceptable by the Republicans.
The fiscal bill, called the American Rescue Plan, is expected to receive no support from Republican lawmakers as Mr. Biden and his team could not appeal to them even with the help of the Treasury Secretary Janet Yellen, who was eagerly urging Republicans to unite with the Democrats in efforts to support the US economy and the jobs market.
The White House is now focused on securing the votes of all 50 Democratic Senators since even a single defection could lead to failure to pass the stimulus bill. Some Democratic lawmakers have expressed concerns over the high price tag of the bill, which could create obstacles during the vote. In this regard, President Biden has been meeting with Senate Democrats on Monday and Tuesday to ask for their support.
The House passed the President’s $1.9tn package early on Saturday morning with no Republicans voting in favor. Now that the package has moved to the Senate, Majority Leader Chuck Schumer could bring it to the floor as early as Wednesday. The formal debate could take a few days before a final vote. The package includes direct checks of $1,400 per individual, small business aid, funding for schools, spending on vaccine distributions, and aid for state and local governments, among other measures
An Upside Movement for the US Equity Markets
Last week, lawmakers abandoned the proposed gradual increase of the federal minimum wage from $7.25 to $15 an hour over five years. The provision, according to the Senate parliamentarian, could not be passed through the budget reconciliation procedure. The rest of the measures, however, could only pass using the same maneuver, as the Senate is split 50-50 between Democrats and Republicans, with Kamala Harris, the US Vice President, being able to cast a tie-breaking vote.
Joe Biden’s campaign to inject the US economy with big-ticket fiscal spending has been meeting challenges in almost every step. Initially, he sought bipartisan support when he was aiming to unite the people after a tumultuous Presidential election. He gave up the effort for bipartisan support when Republicans made it clear that they will only accept a smaller deal. Now the stakes for Mr. Biden are huge and the success or failure of his agenda could define his budding Presidency. If the stimulus package is given the green light, President Biden and his team will push for its enactment by mid-March, the deadline set by the White House.
As lawmakers prepare to debate over the proposed stimulus, market participants remain optimistic. US equity futures rise in premarket hours, led by the Nasdaq Composite, indicating a higher open by about 0.60%. Futures contracts tied to the S&P500 and the Dow Jones Industrial Average are also positive, up about 0.40% each.