April 6, 2020 / Sarah Hansen, Forbes Staff
Topline: The federal government is likely to pass at least one more fiscal relief package, according to economists at Goldman GS Sachs, which is likely to include additional aid to state governments, more funding for small businesses, expanded unemployment benefits, and possibly another round of direct payments to individuals.
- So far, Congress has passed three bipartisan relief bills to try to cushion the damage from the coronavirus; the largest of those bills is the CARES Act, worth a staggering $2 trillion.
- Goldman is expecting another bill because so far, the relief measures signed into law aren’t nearly enough to cover the income that has been lost as a result of the coronavirus crisis. The bank is forecasting private sector losses of $1.9 trillion in 2020 and $1.4 trillion in 2021.
- Analysts also noted that the new benefits in the CARES Act (like direct payments) won’t overlap perfectly with the economic losses caused by the coronavirus. “Consider that we expect 15% of the labor force to be unemployed in Q3, while nearly all households will receive the $1200 per adult payment,” the report notes. “This means that most of the $290bn in payments will go to individuals not facing a job loss.”
- Senator March Rubio of Florida, who is the chairman of the Senate Small Business and Entrepreneurship Committee, told CNBC on Monday that lawmakers expect that they will need to pass another relief bill in the coming weeks. “The appetite is there,” he said. “I think everyone I’ve talked to recognizes we’re going to have to go back and do more, and probably more than once.”
- House Speaker Nancy Pelosi has also called for more legislation, telling CNBC that the provisions in the CARES Act are “not enough.” Pelosi said she wants more direct payments to Americans (in addition to the $1,200 in the CARES Act), more funding for small businesses, and extended unemployment insurance.