Understanding the Four Goals of Biden’s “American Rescue Plan”

12 February 2021 Coronavirus Resource Center:Back to Business Blog
Authors: Jared B. Rifis Kate M. Merrill

President Joe Biden announced his plan for a new COVID-19 relief package on January 20, 2021 - the day he took office. He, along with Democrat leadership, attempted to gain bipartisan support for the legislation, but ultimately failed to gain Republican support to proceed with the measure. Instead, Democrats will use the budget reconciliation process to pass the relief package with a simple majority vote.

In total, it is a $1.9 trillion plan with the stated goals of: (1) funding a comprehensive COVID response plan, (2) delivering relief to working families, (3) supporting communities that are struggling, and (4) protecting against future cyberattacks. Read on for the top details to know about the plan:

  • The comprehensive COVID response includes creating a national vaccination program, scaling up testing, and working to re-open schools.
  • The relief for working families is the most wide-ranging of the goals. It consists of:
    • Direct payments of $1,400 per person to households under a certain income threshold across America.
    • Increasing the minimum wage from $7.25 per hour to $15 per hour by 2025.
    • Expanding unemployment insurance benefits by providing an additional $400 per-week supplement to those in need through August 2021. This measure will also expand benefits for "gig" workers and extend the amount of time that unemployed individuals can qualify for payments.
    • Working to solve hunger problems by extending the 15 percent SNAP benefit increase and investing $3 billion in WIC.
    • Expanding tax credits for low- and middle-income families to $3,000 from $2,000 for any child 17 and younger.
    • Boosting and expanding Medicaid coverage by allowing state programs to penalize drug companies for drug pricing hikes. It also includes new incentives to encourage states to expand Medicaid under the Affordable Care Act. This would be the first expansion of ACA subsidies in over 10 years.
  • To support communities, the plan aims to:
    • Provide support for small businesses.
    • Provide $130 billion for K-12 schools to access the resources they need in order to safely reopen by hiring more staff and putting in place new testing protocols. It may also include $25 billion for childcare centers and $35 billion for colleges and universities.
    • Send $350 billion to state, local, and territorial governments, along with $20 billion for public transit systems. This is an area of partisanship, as Democrats have been pushing for more funding for several months and Republicans see it as a bailout.
  • The cybersecurity efforts included are largely in response to the recent SolarWinds breach of federal systems. The plan funds modernization of federal IT and networks. The Administration also indicated that the modernization will assist with the COVID-19 vaccine process.

The timing for this bill is still up in the air. President Biden set a deadline of March 14 for passage, as that is when the current funding for extended unemployment insurance expires. That will require Congress to work quickly, and they are attempting to meet the deadline; however, Congress is simultaneously working to confirm Biden’s nominees to his administration and holding an impeachment trial for former President Trump.

Congress’s process began last week when the House and Senate passed and adopted a budget resolution. Over the next few days, House committees will work on marking up and drafting legislation, which will then get sent to the Budget Committee, the Rules Committee, and, eventually, to the floor for a vote. After its expected passage in the House of Representatives, the bill will be sent to the Senate, where it is also expected to pass on a party-line vote. Finally, it will be sent to President Biden for his signature.

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