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Even With Divided Government, Coronavirus Stimulus Check 2.0 Has a Chance

Additional coronavirus stimulus money has been a contentious issue in Washington, D.C., with lawmakers from both sides of the aisle negotiating unsuccessfully for months to pass a bill to provide a second stimulus check. Unfortunately, compromise has not gotten consensus support.

Now, with the 2020 election results becoming more clear, there's a very real possibility the government branches will remain divided, with President-elect Joe Biden, a Democrat, potentially governing while dealing with a Republican-majority Senate (unless the Democrats win two upcoming runoff elections in Georgia that will take place in January).

Those hoping for more coronavirus-related stimulus money may be concerned that the prospect of a divided government could doom their chances of a second COVID-19 check. In reality, however, there are lots of reasons to believe that won't happen -- and that another relief bill could be passed even before Inauguration Day or shortly thereafter.

Image source: Getty Images.

There's reason to hope for another stimulus bill

Even if this year's election doesn't lead to one party controlling the executive branch as well as both chambers of Congress, there's political will on both sides of the aisle to provide more coronavirus relief.

In fact, both Republicans and Democrats agree that Americans need another stimulus check, and past proposals from each side have provided for $1,200 direct payments to adults as well as additional money for dependents. Both Republican and Democratic proposals have also included additional aid for the unemployed, although there is disagreement regarding the specific amount of money that should be made available to those without jobs.

Another sign of hope comes from Senate Majority Leader Mitch McConnell, who will play a key role in determining if a stimulus bill gets a vote in the Senate. While McConnell had previously indicated legislation might have to wait until the start of the year, he's now calling for action in 2020 and has expressed his hope that the "partisan passions that prevented us from doing another rescue package will subside with the election." With his support for more stimulus money, the likelihood that a compromise COVID-19 bill will get a vote in the Senate has increased substantially.

Lawmakers will likely also face mounting pressure to take action as COVID-19 cases spike throughout the country. In fact, Walmart's CEO has already called urgently for another round of stimulus checks, as have other key business leaders. And economists have repeatedly warned the country's fragile economic recovery could be derailed without action. With the very real possibility of further lockdowns due to a dramatic rise in the number of coronavirus cases across the U.S., party leaders on both the right and left may be more eager to compromise to avert an economic crisis.

This action may not even have to wait until Biden is sworn in. Lawmakers may have had some incentive to delay until after the inauguration if they were looking at the prospect of a unified government that would've been able to pass a bill with only their policy preferences. However, with the looming possibility of at least another two years of divided government, it will likely remain impossible for either side to push a bill through without support from the opposing party. Since the next coronavirus bill will inevitably have to involve compromise, there's less reason to wait until after Inauguration Day for a deal to be made.

This doesn't mean that you can count on more money, though, as nothing is certain with this government right now. It's best to bulk up your emergency fund, make sure you've chosen the right asset allocation, and confirm you're happy with your stock portfolio in case the economy gets worse before it gets better and government leaders don't come through to help this time.

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Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


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