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Biden Renews Efforts to Strike a Deal with Congress

With US markets set to open higher on Tuesday, President Biden continues to push for the approval of the stimulus plan.

SageFX - Feb, 16, 21

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Principal Points

  • President Biden continues to push for the approval of the stimulus plan
  • US markets set to open higher on Tuesday

Joe Biden’s Attempts to Rescue the US

President Joe Biden is leaving Washington to make his case for a $1.9tn rescue package to Milwaukee, Wisconsin. This is his first trip outside the capital since becoming president. Mr. Biden and his top officials continue to struggle to gain support from Republicans on Capitol Hill for the additional coronavirus spending package. The economic plan that President Biden is proposing includes $1,400 checks for individuals, extra funding for unemployment benefits, and an increase in the aid for state and local governments.

Many Republican lawmakers have opposed the big-ticket spending but polls show that a large part of the legislation has high levels of support among US voters. In particular, when it comes to the provisions related to direct payments to households and individuals. According to one survey conducted by bipartisan pollsters, 64% of Americans believe that the cost of the bill is adequate or even too little, while 36% say it is too much.

In another attempt to put pressure on Congress, Biden stepped up to close the negotiations over the proposed fiscal stimulus. Mr. Biden’s visit to Milwaukee comes just two days after the conclusion of the impeachment trial against Donald Trump on Saturday. The former President was acquitted by the Senate, which had to provide a majority of two-thirds for Mr. Trump to be convicted. The vote ended 57-43 and Donald Trump was cleared.

The Presidential Agenda: Beyond the Stimulus Package

Now that the trial is over, President Biden will be able to shift the lawmakers’ full attention on his relief package, intended to buoy the US economy and provide grants to millions of Americans who’ve been hit by the pandemic. Even though President Biden has not set a firm deadline for the passing of his stimulus bill, he has stated multiple times that he wants the relief bill to be passed as soon as possible due to the “urgency” of the situation.

Some of the sticking points that Mr. Biden will have to smooth out with the Republicans include the raising of the minimum wage to $15 and the additional $1,400 stimulus checks to individuals. Combined with an increase in state and local governments, these measures are viewed as traditionally Democratic and therefore, opposed by the Republicans.

After the approval of the relief package, the Biden administration has vowed to move on with other priorities on the agenda, namely a boost to infrastructure and clean energy. The funding for these initiatives, as outlined in his economic plan, should partially come from higher tax rates on those who are more affluent.

The market has been expecting the passage of the stimulus bill for a while now, as investors continue to provide enough support to keep benchmark indexes near record highs. Yesterday the US took a break in honor of Presidents’ Day, while European markets advanced, led by the FTSE100, up as much as 2.50%. The French CAC40 closed higher by 1.45% and the German DAX rose by 0.42%. On Tuesday, European equities open the session fairly flat, while US futures indicate a modestly higher open.