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Congress Passes Historic $1.9 Trillion Covid-19 Relief Package

03/12/2021

The Democratic majorities in the House and Senate single-handedly passed President Biden’s massive Covid-19 relief package, dubbed the “American Rescue Plan,” earlier this week. While much of the legislation is identical to the plan laid out by President Biden in January, Congress did make several notable changes by narrowing the eligibility for direct stimulus payments, trimming the federal boost to unemployment benefits, and removing an increase in the federal minimum wage to $15 per hour. The President signed the bill on March 11, 2021, which was also the one-year anniversary of the global pandemic.

The legislation includes the following provisions:

Stimulus Checks: The bill provides direct payments of up to $1,400 per person for individuals earning less than $80,000 per year, heads of households earning less than $120,000 per year, and couples earning less than $160,000 per year. Families will also receive an additional $1,400 per child, although families earning more than the salary thresholds will not receive any payments, regardless of how many children they have.

Unemployment Assistance: The bill provides a $300 boost to weekly unemployment payments and extends two key unemployment benefits programs through September 6, 2021. These programs, which provide benefits to gig workers, independent contractors, and freelancers, were set to expire on March 14, 2021. The bill will also make the first $10,200 of benefits tax-free for households with annual incomes less than $150,000.

Optional Paid Sick and Family Leave: Unlike President Biden’s initial proposal, the bill does not reinstate mandatory paid sick and family leave under the Families First Coronavirus Response Act (FFCRA) that was initially passed in March 2020 and expired on December 31, 2020. However, it does continue to provide tax credits to reimburse employers who voluntarily choose to offer the paid benefits through October 1, 2021.

Money for Small Businesses: The legislation provides $15 billion for the Emergency Injury Disaster Loan (EIDL) program, which provides long-term, low-interest loans from the Small Business Administration. Small businesses with fewer than 10 employees will be given priority for some of this money. The bill also provides $25 billion for a new grant program specifically targeted at bars and restaurants, and an additional $7 billion for the second round of the Paycheck Protection Program. Another $75 million will be used for outreach and promotion to help target eligible businesses.

Vaccines and Testing: The bill also provides $14 billion for researching, developing, distributing, administering, and strengthening confidence in vaccines. It will provide $47.8 billion for testing, contact tracing, and mitigation, especially in medically underserved areas, and it will allocate $7.7 billion to hire 100,000 public health workers to support the coronavirus response. Lastly, it provides $50 billion to the Federal Emergency Management Agency, with some funds going toward expanded vaccination efforts.

Other provisions include:

  • $350 billion for states, local governments, territories, and tribes to help with pandemic costs
  • Extension of the 15% increase in food stamp benefits through September 2021
  • $20 billion to help low-income households cover back rent, rent assistance, and utility bills
  • $20 billion to help struggling homeowners and programs to assist the homeless
  • Expansion of the child tax credit to $3,600 for each child under age six and $3,000 for each child under age 18, which will be available for single parents earning up to $75,000 and joint filers earning up to $150,000 per year
  • Enhancement of the earned income tax credit for workers without children by nearly tripling the maximum credit and extending eligibility to more people
  • $125 billion to public K-12 schools to help return students to the classroom safely
  • $40 billion to colleges for financial aid grants to students and to defray lost revenue
  • $39 billion to child care providers to help with operating expenses and help families pay for care
  • Subsidies for Affordable Care Act health insurance policies and COBRA premiums
  • $8.5 billion to assist struggling rural hospitals and health care providers

Please contact Melanie Pate if you have questions or would like to discuss the bill as it applies to your organization and your unique circumstances.

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