Starting with COVID-19 relief, both former Vice President Biden and President Trump have embraced the need for another COVID-19 economic stimulus package.

A Biden administration would likely pursue “high-multiplier” policies that funnel money to people and businesses that need it and are likely to spend it, thereby helping funds circulate through the economy quickly to fuel growth. The Biden team has identified a number of items for possible inclusion in a COVID-19 stimulus package, including:

  • Aid to businesses to help keep employees on the payroll
  • Another stimulus check
  • Increased Federal unemployment benefits
  • Federal aid for state and local governments
  • Student loan forgiveness
  • Increased Social Security benefits
  • Ensure no one has to pay for COVID-19 medical expenses and vaccines

Given the resurgence of the virus and the continued economic hardship, we believe there is a very high likelihood—almost a certainty—that one or more COVID-19 stimulus measures will be enacted during the lame duck session or very early in 2021, regardless of who wins the Presidency and who controls the Senate. The difference will be in the size and scope of the bill. Democratic control of the House and Senate, which seems unlikely at this point, would be needed to enact the far-reaching and expensive initiatives envisioned by Vice President Biden. If the Senate stays Republican, Biden will likely have to scale back his expectations.

Now to turn to infrastructure investment, which is also an area where there is a decent chance for getting something done. Vice President Biden and President Trump have both indicated strong support for major infrastructure investment to bolster the economy. While President Trump has not put forth a specific plan, Vice President Biden has. Biden’s “Build Back Better” plan calls for huge increases in infrastructure investment to address climate change, protect the environment, promote sustainable infrastructure, and foster research and development of new, green technologies.

Moreover, Congress has already signaled its intent to act on infrastructure in the 117th Congress. The major surface transportation programs need to be reauthorized by September 30, 2021 and Speaker Pelosi has indicated her intent for the House to repass the major infrastructure bill that passed the House this past year, saying that it fits well with Vice President Biden’s “Build Back Better” plan. Given the general bipartisan support for infrastructure in Congress and among the public, we would handicap the prospects for a massive infrastructure bill at 50-50. The biggest impediment may turn out to be finding a way to pay for it. If Democrats control the House and Senate, they might be willing to raise taxes sufficiently to pay for it, but, a Republican Senate is a lot less likely to do so.

In closing, please note the following two additional points.

  • First, according to the non-partisan Committee for a Responsible Federal Budget, the country’s large and growing national debt threatens to slow economic growth, constrain the choices available to future policymakers, and is ultimately unsustainable. Neither Vice President Biden nor President Trump has put forth a plan to address the growth in debt, and neither political party has been willing in recent years to tackle the problem. If this changes, it could obviously have an impact on major new spending initiatives.
  • Second, Vice President Biden has proposed to advance many of his policy positions as conditions on federal assistance, some of which may be controversial and may affect whether a company will be able to avail itself of the federal aid. For this reason, it will be important for businesses and other stakeholders to carefully monitor the legislative process so that they can weigh in on issues of concern.