(Bloomberg) -- Goldman Sachs Group Inc (NYSE:GS). raised its forecast for the amount of near-term stimulus Congress will approve after President-elect Joe Biden unveiled his plan Thursday, though kept it well short of the proposed $1.9 trillion package.
The bank’s new projection of $1.1 trillion, up from a previous forecast of $750 billion, reflects more spending on education and public health, along with unemployment insurance and other programs, analyst Alec Phillips wrote in a note late Thursday.
The aid is likely to be approved between mid-February and mid-March, but the timing depends on factors such as Donald Trump’s impeachment trial and the extent to which Democrats decide to use the so-called budget reconciliation process, Phillips said. With the Senate split 50-50 along party lines and Vice President-elect Kamala Harris holding the tie-breaking vote, that would require a simple majority instead of 60 votes -- but would take longer to negotiate.
“We do not expect 10 Republicans to support a $1.9 trillion relief package,” Phillips wrote.
Goldman’s $1.1 trillion forecast includes $200 billion in funding for state and local governments, compared with the $370 billion proposed by Biden. Some Republicans had backed $160 billion in a bipartisan proposal last month.
The bank is also assuming $300 billion to fund $1,400 stimulus payments and a child tax credit -- versus $450 billion in Biden’s plan. It expects Congress will back $100 billion in coronavirus containment funding, against the $160 billion that the incoming president is seeking.
Goldman also sees $50 billion in “other” spending as part of the approved aid, a fraction of the $285 billion proposed by the president-elect.