US $1.9 Trillion 'Stimulus Wings'... Biden Confirms Large-Scale Economic Stimulus

Proactive Agenda Setting Before Inauguration
Concerns Over Interest Rate Hikes and Congressional Approval Remain Challenges

[Asia Economy New York=Correspondent Baek Jong-min] Joe Biden, the President-elect of the United States, who is set to be inaugurated on the 20th, has finalized a $1.9 trillion (approximately 2,082 trillion KRW) economic stimulus package. This is a strong declaration of intent to revive the U.S. economy, which has been devastated by the COVID-19 pandemic, by mobilizing massive fiscal resources.

President-elect Joe Biden announced a $1.9 trillion economic stimulus package on the 14th (local time) at The Queen Theater located in Wilmington, Delaware.
[Image source=AP Yonhap News]

On the same day, Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), also emphasized that there are no plans to raise interest rates early or reduce asset purchases in order to support economic recovery. Based on this policy stance, it is expected that a huge amount of liquidity will continue to flow in the market even after the Biden administration takes office.

On the 14th (local time), President-elect Biden unveiled a budget plan named the "American Rescue Plan." The budget includes $400 billion to complete 100 million vaccine doses within the first 100 days of his administration and to expand testing.

Cash payments of $1,400 per person will also be distributed to all citizens. Combined with the previously passed $900 billion stimulus package, which included $600 payments, this amounts to $2,000 per person. Additionally, an extra $400 per week in unemployment benefits will be provided, and the federal government will ensure a minimum wage of $15 per hour. $350 billion will be allocated to support state and local governments facing budget shortfalls due to the COVID-19 crisis.

However, there are significant differences in opinion between the Democratic and Republican parties regarding the size of the stimulus package, and the political situation in the U.S., intertwined with the impeachment of President Donald Trump, suggests that the passage of this stimulus plan in Congress will face difficulties. Within the Republican Party, there are concerns about the ballooning fiscal deficit caused by expansionary fiscal policy.

On the same day, President-elect Biden requested cooperation from the Republicans, stating, "We need more bipartisan action and we need to move faster."