Advocates celebrated the enactment last week of the American Rescue Plan Act, a $1.9 trillion COVID-19 relief package. President Biden signed the legislation in to law on Thursday, March 11 after the bill (H.R. 1319) ping-ponged back and forth in the House and Senate, passing both chambers without Republican support. The law will provide help to millions of Americans and will reduce the number of people in poverty by over 13 million – including 5.7 million children – through strong provisions, such as larger stimulus checks, more aid for the unemployed, help for the hungry and those facing eviction, more child care funding, expanded health coverage, increased funding for vaccinations, additional support for state and local governments and schools, and more. The New York Times called the package “virtually without precedent in recent American politics.” The White House set up a new website to tout the law and help people navigate benefits.

H.R. 1319 originally passed the House on Feb. 27 (219-212); changes were made in the Senate before it passed (50-49) that chamber on March 6, and the House accepted the Senate’s version with final passage (220-211) on March 10.

Edits made in the Senate mean the final version of the law differs in several key ways from the version that first passed the House. The main differences include:

• Minimum wage: Provisions to raise the federal minimum wage to $15 an hour were stripped due to strict Senate budget process rules. Advocates were disappointed with this and are already working to push Congress to pass the Raise the Wage Act to accomplish this goal.
• Stimulus payments: The income phase-out range was narrowed, meaning that single filers with incomes greater than $75,000 will receive less than the full $1,400, with no payments to those with incomes of $80,000 or more. For heads of households, the payment starts phasing down above $112,500, with no payments to those with incomes of $120,000 or more. For joint filers, the amount starts phasing down above $150,000, and couples with incomes of $160,000 or more would not receive a check.
• Unemployment benefits: the law extends the federal add-on to state benefits through Sept. 6, a week later than the Aug. 29 date in the House bill. The weekly bump-up will remain at the current $300 per week, rather than $400 in the House bill. The final law also exempts up to $10,200 in unemployment benefits received in 2020 from federal income taxes for households making less than $150,000.

Here are just a few of the key components of the COVID-19 relief law:

Beefed-up stimulus payments

The law provides “Recovery Rebates” of $1,400 per person to eligible recipients. As noted above, the income phase-out was changed to exclude filers with higher incomes. The new payments cover all dependents – children and adults – who have a Social Security number, even if none of the taxpayers claiming the dependent file with one. Advocates are disappointed, however, that the law continues to exclude 9.3 million immigrants who file taxes with Individual Taxpayer Identification Numbers (ITIN) who were included in the HEROES Act the House passed last year.

Enhanced unemployment aid

As noted above, the federal add-on to state benefits, known as the Federal Pandemic Unemployment Compensation (FPUC), was extended until Labor Day, Sept. 6. Also extended through Sept. 6 were the Pandemic Emergency Unemployment Compensation program that applies to jobless Americans who have exhausted their state benefits, and the Pandemic Unemployment Assistance program that provides benefits to the self-employed, independent contractors, gig workers, and certain others affected by the pandemic. All three programs were slated to expire March 14. Advocates had pushed for all unemployment benefits to be extended through the beginning of October to avoid allowing benefits to expire while Congress is out of town during its annual August recess, leaving millions of unemployed without the help they need. For more information, see this piece from the National Employment Law Project.

Help for the hungry

The law extends the temporary 15 percent increase in SNAP benefits enacted in December through September and gives $1 billion for the Nutrition Assistance Program to Puerto Rico, American Samoa, and Northern Mariana Islands. It includes $880 million in funding to increase benefits for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) for four months, and provides Pandemic Electronic Benefit Transfer (P-EBT) benefits to school age and young children for the summer and extends the program through the end of the COVID-19 health crisis. More funding is provided for emergency food distribution. It also ensures more young adults can access food at emergency homeless shelters.

Among other provisions to be administered by the Department of Agriculture, there is about $5 billion to provide loan forgiveness and other assistance to Black farmers and ranchers, to address years of inequitable treatment. The bill also includes support for rural health clinics. For more information on nutrition assistance included in the law, see this piece from the Food Research & Action Center (FRAC) and this piece from Feeding America.

Housing, home energy and utility assistance

The law includes nearly $50 billion in essential housing and homelessness assistance, including $27.4 billion for rental assistance and $5 billion to assist people who are homeless. It also includes $10 billion for state, local, and tribal mortgage assistance programs. An additional $4.5 billion for the Low Income Home Energy Assistance Program (LIHEAP) will help households pay for heating and cooling, plus another $500 million to help with water bills, through a new Low Income Household Drinking Water and Wastewater Emergency Assistance Program, all funded through September 30. Back mortgage, rent, home energy and water bills are all part of rising household debt urgently needing solutions to prevent utility shutoffs, evictions, or foreclosures. The rules for reconciliation precluded an extension of the moratorium on evictions and foreclosures. Advocates are calling upon the Biden Administration and Congress to extend these moratoria. For more information, see this piece from the National Low Income Housing Coalition.

Pandemic Emergency Assistance Fund 

The law includes $1 billion in a new Pandemic Emergency Assistance Fund, which will be used for short-term non-recurrent cash or other benefits to help the poorest families with children, some of whom may not be eligible for other forms of help. Funds will be distributed to states, tribes, and territories. Distribution will be based half on the population of children in the state and half on prior Temporary Assistance for Needy Families (TANF) expenditures on cash aid and short-term assistance.

Health care access

The law eliminates or lowers premiums for people who get their health insurance through the Affordable Care Act marketplaces and provides subsidies to fully cover the cost of COBRA insurance premiums through September for workers who had health insurance through their jobs before they were laid off. It also increases by 5 percentage points how much the federal government pays toward a state’s Medicaid expenditures (known as the “federal medical assistance percentage” or FMAP) for states that newly implement the ACA’s Medicaid expansion. The increase means that for states newly choosing to expand their Medicaid program, the federal government will pay 95 percent of the costs for two years, dropping to 90 percent afterwards. States will also receive a 10 percentage point FMAP bump (up from 7.35 in the original House bill) for 1 year for Medicaid home and community-based services (HCBS) to the tune of $12.7 billion, allowing states to increase aid for people with disabilities and older adults who need long-term services and supports to remain in the community instead of going into institutional settings. This funding can be used to support the direct-care workforce, providing additional services to more people, supporting family caregivers, and more. Inclusion of this funding was a victory for advocates for seniors and people with disabilities. Robust funding was also included in the package to improve testing for COVID-19, hire needed public health workers, expand community health centers and health services on tribal lands, support mitigation measures at long-term care facilities and prisons, and speed up the distribution and administration of vaccines across the country. For more information, see this piece from Families USA.

Aid for state and local governments, transit, and schools

The package includes $350 billion in grants to help states, localities, tribal governments, and U.S. territories. It also includes about $170 billion for K-12 students and higher education to ensure that schools and child care facilities can reopen safely, including $7.1 billion in an emergency fund to purchase devices to make distance learning more accessible for elementary and high school students struggling to take part in online learning. There is also substantial funding for child care and early childhood education, including $15 billion to assist parents with child care costs through the Child Care and Development Block Grant, a $24 billion child care stabilization fund to keep child care providers solvent during the pandemic, and $1 billion in new funds for Head Start. For estimates of the child care relief funding each state, DC, and Puerto Rico will receive, see this piece from the Center for Law and Social Policy (CLASP).

Temporary tax credit increases

The law will increase the maximum Child Tax Credit (CTC) for one year from $2,000 to $3,600 for children under age 6 and to $3,000 for those from ages 6 through 17 (the CTC previously reached children through age 16). The credit will also be made fully refundable, meaning families whose income is too low to owe federal income tax would receive the full amount. The CTC begins to phase out for single heads of households at an income of $112,500, and at $150,000 for married couples. At an income level of $170,000, a married couple would no longer be eligible for the additional $1,000 credit for their child over age 6, but the remaining $2,000 in the CTC would phase down more slowly, ending altogether $400,000. The expansion of the Child Tax Credit will cut child poverty by more than 40 percent. According to the Center on Budget and Policy Priorities, currently about half of all Black and Latino children get only a partial Child Tax Credit or no credit at all because their families’ incomes are too low to qualify for the full credit. In all, 27 million children in families with low or no income will now get the credit.

The package will also nearly triple the maximum Earned Income Tax Credit for a year to close to $1,500 for childless adults, helping more than 17 million workers. Puerto Rico will get a federal match of up the three times the current cost if it chooses to increase the EITC for workers without children. The law also includes a full extension of Child Tax Credit benefits to Puerto Rico and a federal supplement to help expand Puerto Rico’s Earned Income Tax Credit.

The legislation also expands the use of the Child and Dependent Care Tax Credit, which would allow families to receive a tax credit for up to 50 percent of the child or dependent care expenses, to a maximum of $4,000 per dependents or $8,000 for two or more dependents, phasing out as incomes rise. For one year, this credit will be fully refundable (that is, fully available to households even if they owe less in income taxes than the credit is worth).

Paid leave

Tax credits for employers who provide paid sick leave and paid family leave are extended from their current March 31 expiration date to September 30, 2021. The credits are increased from $10,000 to $12,000 and extended to include state, local and other governmental entities. The tax credits are made refundable for the employers, and it is clarified that employers can claim the credit if the employee is staying out of work because of contracting COVID, or is caring for someone with the disease. Advocates were disappointed that provisions requiring certain employers to provide paid sick leave and family leave benefits, which expired at the end of December, were not reinstated in the law. For more information, see this piece from the National Partnership for Women and Families.

CHN’s Executive Director Debbie Weinstein praised the American Rescue Plan saying, “The President and Congress faced a choice: do little and watch a slow recovery that leaves the most vulnerable behind, or take bold steps to prevent hunger, evictions, sickness, and prolonged job loss. They took bold and necessary steps.”

For more information on the various parts of the package, see reports and statements from CHN members and partners on CHN’s COVID-19 resource page. In addition, Senate Democrats published a number of resources, including an overview, a summary of the relief for older adults and people with disabilities, and state-by-state estimates of state and local fiscal relief, expanded tax credits, direct payments, education and rental assistance, child care assistance, and more.

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