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 businessman stacks building blocks.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX shares hit a new record high today.

Read more »

A man sees some good news on his phone and gives a little cheer.
Share Gainers

Why Auckland Airport, Australian Ethical, Breville, and Clarity shares are charging higher

These shares are having a better day than most on Thursday. But why?

Read more »

Shot of a young businesswoman looking stressed out while working in an office.
Share Fallers

Why 29Metals, CAR Group, DroneShield, and Santana Minerals shares are falling today

These shares are missing out on the good times on Thursday. But why?

Read more »

Cheerful businessman with a mining hat on the table sitting back with his arms behind his head while looking at his laptop's screen.
Broker Notes

Macquarie tips 50% upside for this ASX 200 miner, and it's not BHP!

Unheralded miner poised to surge?

Read more »

A woman sits at a table with notebook on lap and pen in hand as she gazes off to the side with the pen resting on the side of her face as though she is thinking and contemplating while a glass of orange juice and a pair of red sunglasses rests on the table beside her.
Share Market News

Will these ASX 100 shares surge or sink in July?

These are two ASX favourites to watch closely this month. 

Read more »

a man in a business suite throws his arms open wide above his head and raises his face with his mouth open in celebration in front of a background of an illuminated board tracking stock market movements.
Share Market News

3 ASX ETFs for smart investors

Let's see what makes these funds top picks for Aussie investors.

Read more »

A woman sits on sofa pondering a question.
Broker Notes

Guess which ASX All Ords media stock Macquarie expects to rise 17% over the next 12 months?

The broker is expecting big things from this media company.

Read more »

A happy male investor turns around on his chair to look at a friend while a laptop runs on his desk showing share price movements
Share Market News

5 things to watch on the ASX 200 on Thursday

It looks set to be a good session for Aussie investors on Thursday.

Read more »