Despite efforts by Congressional Republicans to derail the broadly popular American Rescue Plan, House Democrats are on track to pass President Biden’s key provisions through budget reconciliation as early as this week — setting the stage for desperately-needed relief to be delivered to millions of Americans, and to aggressively ramp up efforts to contain the virus and mitigate its damage.
Relief could not arrive at a more critical juncture: though new infections have appeared to slow, experts are warning that highly contagious new variants could cause cases to once again surge. Meanwhile, unemployment remains at record highs — new claims dwarfing even the worst weeks of the Great Recession. Between escalating funding to combat the virus and providing a life-line to American workers, the Rescue Package is a necessary first step in navigating the United States out of this crisis.
Americans Continue to Face the Devastating Effects of the Pandemic:
- INFECTIONS: Though new infections have been declining since an aggressive holiday wave of the virus, experts are warning that highly contagious, possibly more deadly variants could contribute to a rapid rise in new infections. Meanwhile, the United States is still facing tens of thousands of new infections daily.
- HIGH DEATH TOLL: The United States has now reported a half a million deaths to COVID-19 — more than any other country in the world, and a once-unthinkable toll. Deaths have appeared to slow after the holiday surge of hospitalizations, but thousands of lives are still being lost each day.
- RECORD UNEMPLOYMENT CLAIMS: Donald Trump’s failure to contain the virus and protect American families has led to one of the worst — and most unequal — financial crises in modern American history. Weekly initial unemployment claims continue to outpace the worst weeks of the great recession, with more than 860,000 people filing for first-time jobless benefits last week alone. Meanwhile, the number of claims for Pandemic Unemployment Assistance has actually spiked. Without Biden’s rescue package, the supplemental unemployment benefits currently supporting millions of people will expire in March.
- BURGEONING RENTAL/HOUSING DEBT: Millions of Americans are struggling to make rent or mortgage payments after having lost their jobs amid the pandemic. Though federal moratoria on evictions have temporarily protected many from losing their homes, a recent estimate by Moody’s Analytics has found that renters owe an estimated $53 billion in back rent, utilities, and late fees — payments that will eventually become due.
- STRUGGLING STATE GOVERNMENTS: State and local governments, including their depleted, overworked health agencies, have struggled amid the pandemic — many slashing jobs and services to cope with budget deficits. State revenues are down $135 billion compared with pre-pandemic budgets, with more than half of states reporting lower total tax revenues than a year earlier. Meanwhile, more than 1.3 million state and local workers lost jobs between February and December. According to Politifact, “state government employment fell by 6% from its pre-pandemic level, local government employment fell by nearly 7%, and employment in local education fell by nearly 8%.”
Legislation to Enact the American Rescue Plan Includes Several Key Provisions to Fight the Pandemic:
- STATE AND LOCAL AID: The legislation allocates $350 billion in aid to states, territories, and local governments to mitigate the financial effects of the pandemic — including $20 billion reserved for Tribal governments, $195 billion for States and the District of Columbia, and $4.5 billion for territories, and $130 billion in grants and funding to be divided between counties and cities. It also appropriates $30 billion to transit agencies, including to keep transit workers safe, on the job, and paid. And to support the economic recovery of communities, the legislation appropriates $3 billion to the Economic Development Administration for grant-making and to bolster good-paying jobs.
- ECONOMIC RELIEF FOR STRUGGLING AMERICAN FAMILIES: The legislation boosts direct stimulus payments for struggling Americans to a total of $2,000 per person, and includes additional $1,400 payments per dependent. The bill also expands and extends unemployment insurance. Under the proposal, out-of-work Americans could access enhanced unemployment benefits through the end of September, including a weekly federal supplement of $400.
- RENTAL ASSISTANCE: The new legislation includes roughly $20 billion in emergency rental assistance to help tenants and landlords with back rent, $5 billion in emergency housing vouchers to help those who are homeless or at risk of becoming homeless, and $10 billion for “qualified expenses,” including utilities like electric, gas, and water.
- FUNDING FOR K-12 SCHOOLS AND HIGHER EDUCATION: The legislation includes roughly $130 billion for K-12 schools and roughly $40 billion for institutions of higher education. This money is critical for ensuring social distancing, closing budget gaps, avoiding lay-offs, hiring health staff, and investing in supplies like PPE to help schools weather the rest of the pandemic, and to get kids back to the classroom. After the Council of Chief State School Officers this summer estimated that schools would need as much as $245 billion to open safely and the December relief package offered just about a fifth of that, this aid is needed to get students back in the classroom.
- FUNDING FOR CHILD CARE PROVIDERS: The legislation invests $39 billion for child care providers through the Child Care and Development Block Grant Program. While many child care providers have closed during the pandemic, others have been forced to raise prices to offset the costs of adhering to safety guidelines, hiring additional staff and buying cleaning supplies. This financial burden has been shifted to families, with the cost of child care rising an average of 47% during the pandemic.
- THE EARNED INCOME TAX CREDIT AND THE CHILD TAX CREDIT: The legislation expands the Earned Income Tax Credit — which provides low-income earners with additional income — by lowering the eligibility age, eliminating the maximum eligibility age, and by increasing phaseout amounts. It would also increase the child tax credit to about $3,000 per child (or $3,600 for children under six) and make the credit fully refundable for families with no tax liability. Columbia University’s Center on Poverty and Social Policy estimates that these measures and others could cut child poverty in half.
- FUNDING FOR VACCINES AND THEIR DISTRIBUTION, TESTING, AND PANDEMIC RESPONSE: The reconciliation legislation allocates billions to continue ramping up a national vaccination campaign, including by setting up community vaccination clinics, deploying mobile units, and fortifying the vaccine supply chain. It also appropriates $50 billion to procure and administer tests, and to invest in lab capacity, and nearly $2 billion to expand the United States’ disease surveillance and genomic sequencing abilities as dangerous new variants of the virus spread. To ramp up the nation’s public health workforce, the legislation allocates nearly $8 billion for state, local, and territorial public health departments to recruit, train, and hire health workers
- AID FOR SMALL BUSINESSES: The budget reconciliation legislation plan would funnel about $50 billion into struggling small businesses by providing $15 billion for the Targeted Economic Injury Disaster Loan (EIDL) Advance program, $25 billion for a new program to support restaurants, $460 million for the disaster loan program, among other provisions.
- NUTRITION ASSISTANCE: The American Rescue Plan would help families as hunger has exploded across the country by extending a 15 percent increase in the Supplemental Nutrition Assistance Program through September, investing more than $800 million in the Women, Infants and Children program, and providing $1 billion in additional nutrition assistance funding for territories.
- LOWER HEALTH CARE COSTS & EXPANDED COVERAGE: The American Rescue Plan includes important provisions to lower health care costs and expand coverage, building on the strong foundation of the Affordable Care Act. This legislation will lower premiums for people purchasing coverage through the ACA marketplaces and expand access to financial assistance for more middle-class families. Additionally, the American Rescue Plan includes robust financial incentives for the 14 states that have not yet implemented Medicaid expansion. The bill also works to reduce racial inequities by addressing the maternal mortality crisis, by enabling states to expand Medicaid coverage to new mothers 12 months postpartum.