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Biden unveils $1.9T COVID-19 relief package

Yahoo Finance's Rick Newman joined Yahoo Finance Live to break down Biden's $1.9T COVID-19 relief package and what this would mean for Americans in the coming months.

Video Transcript

SEANA SMITH: --of note here. Rick, looking forward here, what you heard from President-Elect Joe Biden last night talking about that $1.9 trillion proposal, what parts of that proposal do you think are going-- or, I guess, what parts of that proposal will he be able to get bipartisan support? Because it's hard to believe that he'll be able to get everything he wants through.

RICK NEWMAN: He's not going to get everything he wants. Democrats obviously had to have taken control of the Senate by the narrowest possible majority, which is one vote. You can only pass one big bill per year with a simple majority in the Senate. And the rest of the bills require 60 votes.

So Biden is probably going to try to go for at least 10 Republican votes on this. And I think that means, forget about 1.9 trillion, maybe he'll get $1 trillion. So take all those items that he wants money for. First of all, I think he will get a lot of money for a national vaccination program and for more testing because many people favor that.

But the other things, he's just not-- he will get some money, he's just not going to get as much as he wants. That's aid to states and cities. Republicans are not going to sign off on, I think he wants $350 billion for that. That's huge. He wants a lot of money for schools and universities. He'll get some, just not as much.

And I don't think Republicans are going to agree with his plan to raise the minimum wage to $15. A lot of Republicans oppose that. Maybe that'll be in some other legislation down the road.

ADAM SHAPIRO: Rick--

RICK NEWMAN: So Biden will get some of what he's asking for, and it will help the economy in the short term. But where are we going to be a year from now?

ADAM SHAPIRO: Rick--

RICK NEWMAN: Are we going to feel like things are back to normal? I don't know.

ADAM SHAPIRO: Rick, are you getting ready for the Amen chorus? That was the phrase many years ago, I don't want to get in trouble. We can't afford this. How are we going to pay this? From a certain political side that just over the last four years didn't care how we paid for anything.

RICK NEWMAN: Sure. Republicans are now budget hawks once again. And I think the main thing you're referring to is the tax cuts of 2017, the Republican Amen chorus then was, oh, this is not going to cost-- this is not going to cost the government revenue because we're going to turbocharge the economy, we're going to have even more tax revenue than before. That flatly did not happen. And we did see deficits going up because of those tax cuts before the pandemic arrived.

But you know what? And one thing I think is different, I mean, there are a lot of serious economists who thought that by the time we added this much debt, and we're close to $30 trillion now in the national debt, that we would have those problems that they worried about, rising interest rates, crowding out of private investment. And really, so far that hasn't happened.

So we have learned over the last 10 years you can borrow more. That doesn't mean you can borrow everything you want. You know, maybe the Biden presidency is going to be the time we find out, what is the limit to how much the government can borrow?

ADAM SHAPIRO: Well, Trump may be going away, but Rick Newman is not. You'll be here front and center, especially during the inauguration. Rick, thank you very much.

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