This article was last updated on March 7
President Joe Biden’s $1.9 trillion stimulus proposal called the American Rescue Plan (ARP) has now been passed in Congress. Two cornerstones of the Biden stimulus ARP package fulfill campaign promises around additional economic impact payments (a.k.a stimulus checks) and extended unemployment benefits until Labor day. Democrats are aiming to get the final Biden stimulus bill passed and signed into law before March 14th, 2021, the date when the current stimulus funding (under the CAA COVID relief bill) for enhanced unemployment benefits expire.
Third Round of Stimulus Checks
Direct economic impact payments of $1,400 to single adult making less than $75,000 and couples earning less than $150,000. The $1400 payment will bringing the total relief in 2021 to $2,000 when including the $600 payments made in January. This third round of stimulus checks will also include another round of $1400 dependent payments and expand eligibility to a broader range of dependents.
Unemployment Benefit Insurance Extensions and Extra Payments
There are provisions for extending COVID related enhanced unemployment benefit programs like Pandemic Unemployment Assistance (PUA) to the end of August 2021. The final bill kept the supplementary weekly unemployment benefit (FPUC) at $300 and pays it for an extra 25 weeks. You can see this article for a graphical representation of the latest extension and coverage period of all the enhanced unemployment programs to date.
The ARP also provides additional unemployment income tax breaks for those households earning less than $150,000 whereby the first $10,200 worth of benefit payments would be tax-free in 2020.
A Biden administration would also maximize work-sharing, a form of “employment insurance” to keep more workers on the job by subsidizing employers to keep employee’s on their payroll.
Student Loan Forgiveness
Forgive a minimum of $10,000 per person of federal student loans of offset impacts of COVID related economic losses to impacted students and their families
Increasing Minimum Wage
Increasing the federal minimum wage to $15 per hour, this would be a 20 to 40% jump in many states. Some like California and Washington are already at this level. However this provision was scrapped in the Senate and will NOT be in the final bill.
Housing Aid, Foreclosure and Eviction
Extending the eviction and foreclosure moratoriums until the end of September 2021. There is also roughly $20 billion of aid to help low-income households cover back rent, rent assistance and utility bills. Around $10 billion has been authorized to help struggling homeowners pay their mortgages, utilities and property taxes. $5 billion has also been provided to help states and localities assist those at risk of experiencing homelessness and another $5 billion for emergency housing vouchers for those who are homeless.
Health Care Relief
Provisions have been added to provide relief for many Americans to save on private health Insurance if they are out of a job, and on COBRA benefit from their employer or getting insurance via Obamacare (Affordable Care Act) through a health exchange. The government would pay the entire COBRA premium from April 1 through Sept. 30. Those who bought health insurance via a government exchange would also get relief through lower premiums that would cost no more than 8.5% of their income (MAGI). See more in this article.
Food Stamps/SNAP Program Extension
The final stimulus plan includes extending the currently approved 15% increase in monthly Supplemental Nutrition Assistance Program (SNAP) benefits to the end of September 2021. The plan also covers a $3 billion investment in Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).
Expansion to the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC)
The proposal also includes expanding the current CTC to $3,000 annually per child (or $250 monthly) between the ages of 6 and 17, while increasing it to $3,600 for children under the age of 6 (infants), equivalent to $300 monthly. The IRS will make these payments on a monthly basis versus eligible recipients having to claim the credit via their tax return on an annual basis. A similar increase is also proposed to the Earned Income Tax Credit (EITC).
There are hundreds of billions of dollars of funding for COVID testing/vaccination, small business, local and state governments in the bill which I will cover in another article soon.