Two previous pandemic relief packages became law under former President Donald Trump. The $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act was passed with bipartisan support in March 2020, and a $900 billion stimulus bill was approved with bipartisan support in December. While consumer confidence rose after both of these previous packages became law, it has improved much more rapidly after passage of Biden’s rescue plan.
According to Morning Consult’s latest data, consumer confidence improved by 2.7 percent five days after Biden’s plan was signed on March 11. Comparatively, consumer confidence improved by just 0.1 percent and 0.7 percent, respectively, following Trump’s signing of the CARES Act and the December relief bill.
Notably, the Biden plan included larger stimulus checks of $1,400 for most Americans, whereas the previous packages included payments of $1,200 and $600, respectively. The funds also began rolling out just a day after Biden signed the bill, compared with three weeks under the CARES Act and two days with the second relief package.
Morning Consult noticed that the change in consumer confidence following Biden’s signing of the American Rescue Plan was even higher among Americans living in households with an annual income below $100,000.
“The third stimulus package is on pace to disproportionately benefit middle- and low-income consumer confidence,” John Leer, an economist with the market research company, wrote in an analysis of the data. “Five days after the bill was signed into law, Morning Consult’s ICS increased by over 3 percent for Americans living in households with annual incomes less than $100,000 (i.e., low- and middle-income adults), while it increased by 1 percent for Americans living in households with annual incomes over $100,000 (i.e., high-income adults).”
In addition to direct stimulus payments for most Americans, the Biden package continues to provide $300 in weekly federal unemployment payments to jobless workers through August. It also significantly expanded child tax credits, providing up to $3,600 annually for each child under 6 and up to $3,000 per child between 6 and 17. Experts have projected that this will cut child poverty by about half.
Meanwhile, Republican lawmakers continue to criticize the relief package—despite polls showing significant bipartisan support for the legislation. GOP lawmakers have argued that the bulk of the money did not go directly toward addressing the coronavirus crisis. They believe the package should have been smaller overall and more targeted.
Republicans have also raised concerns about inflation, but Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen have said that they believe these fears are overblown and that inflation can easily be addressed if it becomes a problem.
Biden and Democrats have defended the rescue plan, pointing to its wide popularity with American voters. They’ve also pointed to the lessons learned from the Great Recession of 2009, when a much smaller bill was passed. Economists generally agree that a more robust stimulus package back then could have helped the economy recover more rapidly. Instead, job growth and overall economic recovery remained slow for years.
