Joe Biden unveils massive US$1.9 trillion coronavirus stimulus package

US President-elect Joe Biden has just unveiled a massive US$1.9 trillion coronavirus stimulus package to boost the US economy.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

US president-elect Joe Biden has just outlined the details of a major new coronavirus stimulus package in a move likely to comfort investors.

The announcement comes just 5 days before the former vice president is set to take the oath of office and be officially sworn in as president.

Mr Biden made the announcement today. In this, he detailed how the package, reportedly dubbed the 'American Rescue Plan' and estimated to cost approximately US$1.9 trillion ($2.45 trillion), will be deployed.

According to reporting in the Australian Financial Review (AFR) today, the package will primarily consist of a new fresh round of stimulus cheques of US$1,400 each. These will supplement the US$600 round of cheques that were sent out just after Christmas.

Those came after President Donald Trump signed a bipartisan relief bill. These new cheques will go to most American families earning under an income threshold.

A new stimulus package for the US economy

The package will also include the following provisions:

  • An unemployment insurance boost of US$400 each
  • A $20 billion boost to the national vaccine program
  • A rise in the federal minimum wage to US$15 per hour, up from the current US$7.25 per hour level
  • Grants and loans for small businesses, estimated to cost US$440 billion
  • Emergency funding for state, local and territorial governments, estimated to cost US$350 billion
  • 14 paid weeks of sick and family leave for caregivers
  • Tax credits for families – reportedly consisting of "up to" US$4,000 for one child, or US$8,000 for 2 or more children

President-elect Biden's Democratic Party won an unexpected majority in the US Senate earlier this month. It did so by sweeping the 2 US Senate seats of the conservative Southern state of Georgia. It already held control of the House of Representatives under Speaker Nancy Pelosi.

As such, there is more likelihood of most, if not all, of the provisions of this package becoming law than if the Republican Party had maintained its previously-held majority. It was the Republican Senate that denied consideration of the US$2,000 cheques over Christmas to begin with. That was despite the objections of Democrats, as well as President Trump.

The Senate will be equally divided between the 2 parties once the new senators are sworn in. However, under the US constitution, the vice president breaks all senate ties, meaning that the Democrats will be in effective control until at least 2022. It will be interesting to see how the US markets react to this new round of stimulus spending overnight.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

A diverse group of people form a circle at a park and raise their arms together.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors pulled back from the market's record highs this Thursday.

Read more »

A few gold nullets sit on an old-fashioned gold scale, representing ASX gold shares.
Broker Notes

This ASX 200 gold stock could shine bright, says top broker

Poised to soar?

Read more »

Three miners looking at a tablet.
Resources Shares

3 ASX mining shares to sell today: experts

These iron ore, coal, and lithium miners have attracted sell ratings from brokers.

Read more »

Five different piggy banks, indicating a diverse share portfolio.
Bank Shares

Investing in ASX 200 banks: Which macroeconomic variables matter according to Macquarie

The majority of absolute bank performance can be explained by four key factors.

Read more »

Happy miner giving ok sign in front of a mine.
Broker Notes

Macquarie forecasts 40% upside for this ASX mining stock

Ready to rock.

Read more »

a young woman raises her hands in joyful celebration as she sits at her computer in a home environment.
Share Gainers

Why DroneShield, EOS, Larvotto, and Life360 shares are racing higher today

These shares are having a strong session. But why?

Read more »

A man holds his head in his hands after seeing bad news on his laptop screen.
Share Fallers

Why Beach Energy, Cettire, Flight Centre, and Pilbara Minerals shares are sinking today

These shares are having a tough time on Thursday. But why?

Read more »

Red arrow going downwards in front of oil pumpjacks.
Energy Shares

Why did this $2.7 billion ASX 200 energy share just crash 11%?

Investors are fleeing the ASX 200 energy stock today. But why?

Read more »