(Update 3/6/21) This bill — known as the American Rescue Plan Act of 2021 — would provide $1.9 trillion in funding for initiatives to provide economic relief and healthcare resources to mitigate the coronavirus (COVID-19) pandemic. It has been amended by the Senate to remove provisions that violate parliamentary rules for budget reconciliation bills, such as the increase in the federal minimum wage to increase to $15 per hour and funding for specific transportation infrastructure projects. A breakdown of the bill’s major provisions can be found below.
Stimulus Payments: This section would provide recovery rebates that total $1,400 for each adult and child in a household, including non-child dependents. Payments would be reduced for higher income taxpayers and begin phasing out at $75,000 in adjusted gross income (AGI) for individual taxpayers & $150,000 AGI for married filers. The rebate amount would be reduced by $5 for each $100 a taxpayer’s income exceeds the phase-out threshold; and it would phase out entirely for single taxpayers with incomes over $80,000 & married filers with AGI exceeding $160,000. The Internal Revenue Service (IRS) would base these AGI amounts on the taxpayer’s returns filed in 2019 and 2020. Payments would only be available to recipients who have a Social Security Number and are U.S. citizens.
Unemployment Insurance: The weekly federal enhancement of unemployment benefits under the Federal Pandemic Unemployment Compensation (FPUC) would be extended through September 6, 2021, and the weekly benefit would remain at $300. The first $10,200 of unemployment benefits would be tax-exempt for households with incomes under $150,000. Additionally, the Pandemic Unemployment Assistance (PUA) program would be extended until the same date, as would the temporary of short-time compensation payments to workers who had their hours reduced.
Tax Relief: This section would make the child tax credit (CTC) fully refundable for 2021 and increase the amount to $3,000 per child ($3,600 per child under age 6). It would also make 17 year old individuals eligible to be claimed under the CTC for 2021. Eligibility for the Earned Income Tax Credit (EITC) for taxpayers with no qualifying children would be increased for 2021, with the minimum age to claim it reduced from 25 to 19 (except for certain full-time students), in addition to changing its parameters to increase the maximum credit amount from $543 to $1,502.
Relief for Small & Shuttered Businesses: This section would provide $25 billion for a new program at the Small Business Administration (SBA) that would offer assistance to restaurants and other food and drinking establishments. Of the total, $5 billion would be set aside for businesses with less than $500,000 in 2019 annual revenue. Grants would be available for up to $10 million per entity, with a limit of $5 million per location, and entities would be limited to 20 locations. The first 20 days of the application window would be reserved for restaurants owned and operated or controlled by women, veterans, or socially and economically disadvantaged individuals.
An additional $7.25 billion for the Paycheck Protection Program (PPP) would be provided, raising its funding level from $806.4 billion to $813.7 billion.
Healthcare & Vaccinations: This section would provide $48.3 billion to the Dept. of Health and Human Services (HHS) for testing, contact tracing, and COVID-19 mitigation activities. It would also provide $7.5 billion to support the preparation, promotion, distribution, administration, and tracking of COVID-19 vaccines; $1 billion for activities to promote confidence in vaccines; plus $5.2 billion to support the vaccine supply chain.
It would also provide $7.6 billion for community health centers, $7.66 billion for expanding the public health workforce through grants to state and local governmental entities, $10 billion for obtaining medical supplies using the Defense Production Act, plus $3.5 billion in block grants evenly divided between mental health and substance abuse.
Education: This section would provide over $168 billion in funding for schools to address the COVID-19 pandemic, including $122.7 billion to the Elementary and Secondary School Emergency Relief Fund (ESSERF) for state educational agencies and local educational agencies; and $39.6 billion to the Higher Education Emergency Relief Fund (HEERF) for public and private non-profit institutions of higher education. State education agencies would be required to reserve at least 5% of ESSERF funding to address learning loss, while local education agencies would be required to reserve 20% of their funding for that purpose.
States & Local Governments: This section would provide a total of $350 billion for states and localities to help with fiscal recovery from the COVID-19 pandemic. Funding could only be used in response to the COVID-19 pandemic, to cover related costs incurred, and to replace revenue lost due to the pandemic based on pre-pandemic financial projections. It would include:
$219.8 billion for the Coronavirus State Fiscal Recovery Fund, of which $195.3 billion would go to the 50 states and the District of Columbia, $20 billion to tribal governments, and $4.5 billion to territories and commonwealths. Funding would remain available until it’s expended.
$130.2 billion for the Coronavirus Local Fiscal Recovery Fund, of which $45.57 billion would go to metropolitan cities, $65.1 billion to counties, and $19.53 billion to local governments with less than 50,000 inhabitants.
Pension Reforms: This section would make reforms to shore up insolvent pension programs, including those established by unions, with a cost of roughly $86 billion.
Multiemployer Pension Reform: This section would authorize the Pension Benefit Guaranty Corporation to take on some of the benefits of a failing multiemployer pension plan through a partition program so that the plan can stay solvent. Funding assistance would be in effect through 2026 after gradually phasing out during the interim period.
Single Employer Pension Plans: For plan years beginning in 2020, shortfalls could be amortized over 15 years instead of seven years. Interest rate smoothing corridors for stabilizing single employer pensions would be extended so that their phase-out wouldn’t have to begin in 2021.
Miscellaneous: This bill would also provide funding for the following:
$30 billion for federal transit grants, plus $8 billion for airports and $1.5 billion for Amtrak.
The National Endowment for the Arts and National Endowment for the Humanities would each receive $135 million, with 40% reserved for grants to state agencies and 60% for direct grants to support organizations’ programming.
The Institute of Museum and Library Services would receive $200 million, with each state receiving at least $2 million.
Federal workers who have to stay home with their children due to remote learning would receive $1,400 per week for 15 weeks.