Congress Passes Biden’s American Rescue Plan

On March 10, the U.S. House of Representatives passed, 220-211, the “American Rescue Plan Act of 2021” (H.R. 1319) as modified by the Senate. The sweeping $1.9 trillion COVID-19 relief package implemented President Joe Biden’s priority pandemic relief proposal that he released on January 14, 2021. The final vote was along party lines, with no Republican lawmakers supporting the bill and Rep. Mike Bost (IL) not voting. One Democrat, Rep. Jared Golden (ME), opposed the bill.  President Biden signed the bill on March 11, aiming to prevent 11.4 million Americans from losing their boosted unemployment benefits set to expire on March 14.

The Senate modified and passed the House bill on March 6, by a party-line 50-49 vote, with Senator Sullivan (R-AK) not voting. The bill had to be slightly modified because some provisions were outside of Senate reconciliation rules, collectively known as the “Byrd Rule. Some additional modifications were made because some Democrats used their leverage in an evenly split chamber to address some of their concerns with specific provisions. Most notably the bill removed the $15 an hour minimum wage provisions included in the House-passed bill because, as anticipated, it was ruled to be outside of the Byrd rule. There were also changes to the phase-out range for those qualified to receive the $1400 direct payments, and keeps the weekly boosted unemployment benefit at the current $300 per week rather than $400 a week passed by the House.

The final provisions provide significant aid and funding to individuals, businesses, and the many sectors in the vinyl industry:

Direct State and Local Aid for Water Infrastructure

• The bill provides a total of $362 billion of direct aid to state, localities, the U.S. Territories, and Tribal governments, to help them respond to the coronavirus pandemic, but also continue providing government services that have been threatened because of declining revenues caused by the pandemic. Of these funds, $350 billion are provided for new Coronavirus Relief Funds that can be specifically used to make necessary investments in water, sewer, and broadband infrastructure.  Funds provided would remain available through Dec. 31, 2024, and if the funds aren’t used for their intended purposes the state or local government could be required to repay the monies to the federal government.
• The funding will be provided and distributed through the “State Recovery Fund” and the “Coronavirus Local Fiscal Recovery Fund” as follows:
• • $195.3 billion is to be divided between the states – $25.5 billion would be divided equally between the 50 states and D.C., with the remainder ($169.8 billion) to be distributed based on a state’s share of unemployed individuals in the nation over the last three months of 2020. The Treasury secretary must directly award funds within 60 days of enactment, although the secretary could withhold 50% of a state’s funds for up to a year. An additional $755 million is provided to D.C. in retroactive CARES Act funding for D.C. (Interestingly, according to the Urban Institute, 22 states had flat or slight increases in their budgets in 2020 and California had something between a $15 and $19 billion surplus.)
  • $130.2 billion is designated to a “Coronavirus Local Fiscal Recovery Fund” that provides direct aid to metropolitan areas, municipalities, and counties within each state. Portions of the funding will be provided based on the formula used for Community Development Block Grants, while others will be disbursed based on populations of cities or counties.
  • $20 billion to federally recognized tribal governments, including $20 million for the delivery of potable water.
  • $4.5 billion is allocated for the U.S. Territories.

• The Senate also included provisions to establish a $10 billion for a “Coronavirus Capital Projects Fund” to help states fund “critical capital projects” fund to finance infrastructure improvements in states that directly enable work, education, and health monitoring (including remote options) in response to the pandemic. In particular, the fund is expected to be used for rural broadband infrastructure.

Aid to Small Business and Nonprofits

• Increases Paycheck Protection Program (PPP) Funding: Like the House bill, the Senate-passed bill includes $7.25 billion in additional funding for PPP and expands eligibility of 501(c) nonprofits of all sizes and types, except for 501(c) 4 lobbying organizations
• Creates a Restaurant Revitalization Fund: The Senate-passed bill increased the funding allocation for a new program at the SBA to offer assistance to restaurants and bars hard hit by the pandemic from $25 billion to $28.66 billion.
• $15 Billion for COVID-19 Emergency Grants Through the Economic Injury Disaster Loan (EIDL) Program to help those who applied for relief in 2020 but did not receive the full $10,000 grant
• Establishes the Community Navigator Pilot Program to increase the awareness of and participation in COVID-19 relief programs for business owners currently lacking access, with priority for businesses owned by socially and economically disadvantaged individuals, women, and veterans
• Provides $10 billion to support up to $100 billion in small business financing through state, territorial, and tribal government programs.
• Extends through December 31, 2021, the Employee Retention Credit, created by the CARES Act, which expired on December 31, 2020 with modifications to help start-up businesses and expand the credit to include employees who are working but whose businesses have suffered a significant revenue loss
• Extends, from March 31, 2021 to September 30, 2021, the payroll tax credit for employers created by the Families First Coronavirus Response Act for use to help employers defray the costs of the paid sick leave and paid family and medical leave required for employees impacted by the COVID-19 pandemic under that Act

Aid to Individuals

• Provides an additional $1400 direct payment for individuals who received the full $600 payment in December 2020. The bill phases out the payment for single filers making $80,000, head of household filers making $120,000, and joint filers making $160,000.
• Extends the Federal Pandemic Unemployment Compensation (FPUC) benefit through September 6, while keeping the benefit at the current $300 per week.  It also extends both the Pandemic Unemployment Assistance (PUA) program and the Pandemic Emergency Unemployment Compensation (PEUC) program through September 6.
• Provides a 100% subsidy for individuals who lose their job and choose to use COBRA to continue their existing employer-sponsored health coverage.
• Increases the amount of child and dependent care expenses eligible for the Child and Dependent Care Tax Credit for 2021 to $8,000 for one qualifying individual and $16,000 for two or more qualifying individuals.
• Raises the maximum Earned Income Tax Credit for childless adults from roughly $530 to close to $1,500, raises the income limit for the credit from about $16,000 to about $21,000, and eliminates the age cap for older workers, for 2021.