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What a Mostly Democratic Congress Means for Your Bank Account

Nicole Spector
·4 min read
dblight / Getty Images
dblight / Getty Images

The president (any president) can only accomplish so much without the support of Congress. Though President Joe Biden squarely won the election in November, his victory was somewhat limited in that a lot of the work he wanted to do would eventually need to go through Congress and be initiated by it. Were he to face a majority Republican Congress, it would have been highly likely that many of his missions would have been shut down.

Read: Jaw-Dropping Stats About the State of Retirement in America

Fortunately for the Biden administration, the Democrats edged out Republicans in Congress, and now they have the majority, however slim. As such, Biden and Vice President Kamala Harris should be able to see more of their proposals passed — the keyword here being “should.” What might this mean for you and your bank account? GOBankingRates consulted a number of experts to find out.

Last updated: Feb. 23, 2021

US Treasury concept check to illustrate coronavirus stimulus payment on keyboard used for working from home.
US Treasury concept check to illustrate coronavirus stimulus payment on keyboard used for working from home.

$1,400 Stimulus Checks

In his first month in office, Biden has worked hard to get the COVID-19 pandemic under control and to get relief to the millions of Americans financially impacted by it. Now, with a majority Democratic Congress, he has a clearer path to make his and Harris’ proposed $1.9 trillion stimulus bill a reality. Among other key benefits, this bill would see $1,400 direct checks to Americans making $75,000 or less a year.

Why didn’t he just go ahead and pass it? Because, again, the president can only do so much without Congress’ approval.

“Congress has to take action first,” said Dr. Jim Ronan, an adjunct professor of political science at Villanova University. “Now, the Biden Administration is working with Congress to ensure key provisions are included, such as stimulus payments, but in terms of allocating spending, Congress will have the final say.”

See: How Rich Are Donald Trump and All the Other Living US Presidents?

A couple is doing accounting at home.
A couple is doing accounting at home.

Modestly Increased Tax Credits

While a Democratic Congress is good news for Biden’s proposed tax program, which includes increased child tax credits, among other proposed credit boosts, we might not see the end result being as ambitious as the Biden administration is aiming for.

“The evenly divided Senate coupled with the struggling economy will still limit what Congress will send to the president for signature,” said Dean Zerbe, national managing director at alliantgroup and former senior counsel to the U.S. Senate Finance Committee. “I expect Democrats will be able to pass more modest tax increases on corporations and high-income individuals as well as providing tax relief that is focused on families with children.”

Find Out: Here Is the Difference in Tax Burden Between the Rich and Poor in Every State

A woman scans through a W-9 forms as she does her taxes.
A woman scans through a W-9 forms as she does her taxes.

Higher Federal Taxes for Those Making Over $400,000 Annually

The famed bump in federal taxes for people making over $400,000 per year should come to light with a Democratic-leaning Congress.

“This increases the highest individual income rate making it hit back to 39.6%,” said Donna Tang, budgeting and finance expert at CreditDonkey. “This ensures that every citizen is contributing equally for the welfare of the country. On the other hand, the underprivileged were also taken into consideration and tax benefits were introduced for middle- and low-income families. This is an incredible way to maintain the right purchasing power for every individual out there.”

More: Biden Wants to Shut Down Credit Bureaus – What Would That Mean for You?

Construction of a mass transit train line in progress with heavy infrastructure.
Construction of a mass transit train line in progress with heavy infrastructure.

More Jobs in Infrastructure

With a Democratic Congress, Biden’s proposed $1.3 trillion infrastructural plan — aimed at restoring roads, bridges, highways and making the adoption of electric vehicles more widespread — will likely pass in some incarnation.

The infrastructural spending “will likely have a multiplier effect in any communities targeted for it and create a lot of temporary jobs as well as some permanent ones,” said Chris Motola, a financial analyst at MerchantMaverick.com. “If you’re adjacent to this, you’ll probably reap some reward.”

Read: 100 Ways To Make Money Without a 9-to-5

A home near Uptown Charlotte Awaiting renovations.
A home near Uptown Charlotte Awaiting renovations.

Enrichment of Poorer Areas

Another portion of the infrastructural spending targets high-poverty areas.

“Presumably, this would help eliminate ‘transit deserts’ and other structural problems that tend to isolate poor communities,” Motola said. “If completed, they’ll likely have a positive effect on the bank accounts of people in those communities, as well as those who invest in them.”

See: 17 Tips To Live Comfortably Off Just a Social Security Check

Young female working inside cafeteria bakery while making coffee wearing gloves and face mask for coronavirus spread prevention - Protective measures at work during Covid-19 outbreak - Focus on hand.
Young female working inside cafeteria bakery while making coffee wearing gloves and face mask for coronavirus spread prevention - Protective measures at work during Covid-19 outbreak - Focus on hand.

Higher Minimum Wage

“The proposed minimum wage increase to $15/hr would obviously boost earnings for anyone making minimum wage,” Motola said. “It may also prop up wages above that. Less clear is how it will affect employment numbers overall; there’s much debate over whether it destroys jobs through added cost or if it increases them by creating greater demand. The truth is probably somewhere in the middle.”

Keep reading to see what the minimum wage was when you were born.

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This article originally appeared on GOBankingRates.com: What a Mostly Democratic Congress Means for Your Bank Account