Although Congress over the weekend reached an agreement on a second coronavirus stimulus package, The Washington Post notes that the money it provides will run out a few months in 2021.
The legislation that both parties agreed on, which totals about $900 billion in funding, does not include direct state or local aid and it does not extend unemployment benefits past the middle of March.
“This is better than nothing, and there’s some good news that we’re finally getting a deal,” Kathy Bostjancic, the director of U.S. macro investor services at Oxford Economics, told the Post. “The bad news is it’s less stimulative than the prior packages, and the relief measures are short-lived.”
The newspaper notes that most of the dozen economists they interviewed said that the stimulus package will keep the economy afloat for the next few months, by which point coronavirus vaccines will likely be more widely available.
“We have a very tough four to six months coming up before the vaccine becomes widely effective and economic activity recovers,” said former Federal Reserve Chair Ben Bernanke. “This package is as much about relief and disaster aid as it is about ‘stimulus.’”
Diane Whitmore Schanzenbach, director of the Institute for Policy Research at Northwestern University, noted that “If we know anything about recessions, it’s that the recovery, especially for people with lower levels of education, is going to take longer. It’s going to take us a long time to get out of this, and the aid in this bill doesn’t last for long enough.”
Arkansas Gov. Asa Hutchinson, the Republican vice chair of the National Governors Association, noted that he backed the agreement but said he hoped states would receive additional assistance down the line.
“Clearly there needs to be additional assistance for states in a number of different areas,” he said. “No governor wants to have a bailout bill for their state, but they do want to have assistance for legitimate pandemic-related costs that have cost their state government enormous amounts of money.”
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