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The American Rescue Plan

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What’s in the American Rescue Plan recently passed by Congress and signed into law by the president?

Key Points
  • The new stimulus checks have already begun going out
  • Provisions to help struggling Americans have been included
  • Vaccinations should be available to all adults shortly

American Rescue Plan

What did the recently signed American Rescue Plan actually do? Overall, the bill includes funding for vaccine distribution, $1,400 direct stimulus checks, expanded weekly unemployment benefits, resources to safely open our schools, increased paid sick and family leave, money for housing and nutritional programs, a higher earned income tax credit and child tax credit, and assistance to struggling state and local governments.

The ARP Act of 2021 guarantees a new round of $1,400 direct payments to Americans. It also provides payments of $1,400 per child dependent and provides checks to adult dependents, including college students and disabled adults. If you’re saving money for retirement, this could be a windfall that you can save for the future. In addition to the stimulus checks, that many people will rely on for rent and bill payment, there are other items included.

Unemployment insurance: Provides an additional $300 in weekly unemployment benefits from the federal government through September 6, 2021. The bill also extends the Pandemic Unemployment Assistance (PUA) program for the self-employed and those who do not qualify for standard unemployment benefits, and builds on the Pandemic Emergency Unemployment Compensation (PEUC) program, which offers extra weeks of state benefits. The legislation also exempts the first $10,200 of supplemental benefits from income taxes for those earning less than $150,000 last year.

Family assistance: Expands the child tax credit for this year to $3,000 per child up to age 17 and $3,600 for children under age 6. The bill will allow families to claim up to half of their child care expenses on their tax returns and enhances the earned income tax credit (EITC).

Resources for families and children: Augments an additional $5 billion into an existing program to help low-income families with food assistance; it also expands the age of eligibility for the Child and Adult Care Food Program at emergency homeless shelters for young adults; and puts millions of dollars toward programs addressing child abuse and neglect and domestic violence. The plan continues the 15 percent increase in Supplemental Nutrition Assistance Program (SNAP) benefits through September 2021.

Homeowners and rental assistance: Includes $25 billion to provide assistance to renters, plus assistance targeted to specific populations to ensure vulnerable families are able to access the relief they need. ARP Act includes $10 billion to address the ongoing needs of homeowners struggling to afford their housing by providing direct assistance for mortgage payments, property taxes, property insurance, utilities, and other housing related costs.

Investing in America

The American Rescue Plan makes significant federal investments in vaccines, public health, food assistance, and aid for struggling small businesses and restaurants. Through the existing programs such as those of the Defense Production Act, it directs $10 billion in spending allowing the government to significantly increase production of PPE, medical supplies and masks, vaccines, tests, and other life-saving materials. Expands eligibility for the Paycheck Protection Program (PPP) for small businesses, and invests an additional $7.25 billion towards the PPP. 

Investments of $25 billion are being made toward a new program at the Small Business Administration that would support restaurants and directs an additional $15 billion toward a payroll support program established under the CARES Act to assist airline employees. For businesses impacted by the pandemic, about $15 billion is going toward the Economic Injury Disaster Loan program. The ARP Act invests $3.6 billion for the U.S. Department of Agriculture to ease food transactions and provide grants and loans to farmers.

In addition, the Act provides an additional $200,000,000 for Staffing for Adequate Fire Emergency Response (SAFER) grants in Fiscal Year (FY) 21 for hiring and retaining firefighters, and an additional $100,000,000 for Assistance to Firefighter Grants (AFG) in FY21 for personal protective equipment, mental health evaluations, and training.

Health and Vaccines in ARP Act

Affordable Care Act coverage. Enhances Advanced Premium Tax Credits to make premiums more affordable while eliminating the 400 percent poverty level cliff so that people with fluctuating incomes do not have to pay back part of the subsidy; also handles uninsured individuals with by offering a guaranteed subsidy for exchange plans, and provides 100 percent premium assistance for COBRA continuation coverage for eligible individuals and families through September 2021.

Vaccines, testing, and tracing: Provides the Centers for Disease Control and Prevention (CDC) with $7.5 billion to track, administer, and distribute COVID-19 vaccines. Another $46 billion would go toward diagnosing and tracing coronavirus infections, and $2 billion would go toward buying and distributing various testing supplies and personal protective equipment.

Public health: Invests $7.6 billion to bolster the public health workforce and invests $100 million for the Medical Reserve Corps. The bill also provides $7.6 billion for community health centers for COVID-related activities and invests $25 billion to assist vulnerable communities and shrink disparities in health care access.

Surely there will be many changes in the coming year as the country attempts to reopen and the economy adjusts to it. Nationwide vaccination availability and testing will likely speed the reopening this country needs. The American Rescue Plan and the assistance it can offer to small businesses may be the lifeline business needs right now. Getting current on bills or hiring back furloughed workers, could be exactly what the country needs businesses to do to restore faith in the economy for the majority of American workers.

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