Several big things happening in Washington could have major ramifications on average Americans’ wallets. Both the budget reconciliation and the vote on the trillion-dollar bipartisan infrastructure package are slated to happen this week — with the largest effects trickling down to the average consumer.
The Senate has a test vote set for later this afternoon as a means to gauge which legislators will vote to keep the government funded and avert the first default in U.S. history. The government has a final deadline of Thursday, September 30 to make their final decision.
In terms of infrastructure, moderates in Congress are refusing to put votes needed to push their $3.5 trillion budget through unless a $1 trillion bipartisan infrastructure plan is passed in conjunction. Speaker of the House Nancy Pelosi said on Sunday that the chamber will vote on the passage of this smaller bill this coming Thursday, September 30, as well.
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Political implications aside, both votes could have a big impact on your personal finances.
The potential for default is the more pressing of the two, as the U.S. has never defaulted in its history. Should the government not vote to increase the debt ceiling, almost all lines of lending have the potential to become more expensive. The U.S. is one of, if not the, most credit-worthy nation in the world and free-flowing lines of credit are very much a part of financial national identity. Much of the stability tied to U.S. Treasury bonds, used as a benchmark of stability in international markets, is tied to the stability of the underlying government that has historically always kept the government funded. A default could mean higher interest rates — and higher loan rates overall — for mortgages, credit cards and auto loans.
Many Republicans have claimed that they will not help the Democrats pass an increased debt limit. Tomorrow morning will give more insight as to how final votes will proceed.
The infrastructure vote has been the focus of government spending for many reasons, but for the average American, it could mean a couple of different things. Some might see increases in capital gains taxes and taxes overall, but the White House has also claimed the bill will add over two million jobs per year. The telecom, shopping and metals industries are all slated to be some of the biggest winners from the bill, with government investments directly affecting their industries without them having to directly invest.
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The bill also includes an expansion of education, healthcare and child tax credit benefits which, if passed, could be one of the biggest social spending bills in history. The inclusion of social benefits has been a point of contention for many legislators, and one of the main factors holding up a clear passage of the bill.
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Last updated: September 27, 2021