By Isaac Cohen*
With the U.S. Congress engaged in new cabinet nominations and another impeachment, amid turbulence in the stock market, over the weekend there were positive news on the discussion of a new relief package to support economic activity. On Monday, in a meeting with President Joseph Biden, 10 Republican Senators presented a proposal to support part of the Rescue Plan drafted by President Biden’s transition team before the inauguration.
Wide distance remains between both proposals. The Republican Senators offered to support one third, or $600 billion, of the $1.9 trillion proposed by the White House. If both parties can meet somewhere in the middle, this keeps open the possibility of continuing practicing bipartisanship, to deal with the fact that the US economy, under the pandemic burden, slowed down again by the end of last year.
As recognized by Federal Reserve Chairman Jerome Powell last week, “the pace of the recovery has moderated in recent months, with the weakness concentrated in the sectors of the economy most adversely affected by the resurgence of the virus and by greater social distancing.” https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20210127.pdf
Additionally, vaccinations have started unevenly and the benefits from the last relief package are scheduled to expire in the first quarter. Therefore, fiscal policy will have to provide additional support to serve as bridge until collective immunity is achieved.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.