Wall Street Watches Biden's Next Stimulus Plan: 'Infrastructure Investment Proposal'

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[Asia Economy Reporter Yujin Cho] Just three days after U.S. President Joe Biden signed the $1.9 trillion stimulus bill, Wall Street's attention is already turning to the next stimulus package, CNN reported on the 15th (local time).

President Biden, who signed the additional stimulus bill on the 12th, is exploring ways to fund the next stimulus plan, including investments in green infrastructure. The market expects that the upcoming bill could be about 30% larger than the previous two budgets.

Earlier, U.S. Treasury Secretary Janet Yellen indicated that there would be no delay in passing the next bill. In an interview with NBC last week, she said, "Infrastructure, education, and climate change will be on the next list."

Given that the $1.9 trillion stimulus package was adopted without major issues, Wall Street anticipates that President Biden's next infrastructure stimulus plan will also be proposed on a very large scale.

However, CNN reported that since the details have not yet been finalized, there are various speculations regarding the size and method of the spending plan.

Goldman Sachs expects the Biden administration to propose infrastructure spending of at least $2 trillion, and if issues such as childcare and healthcare are included, the total could reach up to $4 trillion. Opinions are divided not only on the size of the stimulus but also on discussions about funding sources.

Goldman Sachs noted that, unlike the $1.9 trillion additional support plan, it will be difficult to fund solely through issuing government bonds, and tax reform will be necessary to raise funds.

Goldman Sachs strategists forecast, "Some of the funding will be covered by increases in corporate and capital gains taxes." However, the bank believes that Congress is unlikely to agree to tax increases exceeding $1 trillion.

Citigroup expects the next package to include $75 million and $1 trillion for extending child-related tax benefits. To achieve this, Citigroup anticipates a plan to raise the corporate tax rate from 21% to 28%. However, they added, "There is still a 30% chance that the bill will not pass by the end of the year."

This content was produced with the assistance of AI translation services.