Here are the proposal’s major offerings:
- It extends a $300 per week jobless aid supplement and programs making millions more people eligible for unemployment insurance until Sept. 6. The plan also makes an individual’s first $10,200 in jobless benefits tax-free.
- The bill sends $1,400 direct payments to most Americans and their dependents. The checks start to phase out at $75,000 in income for individuals and are capped at people who make $80,000. The thresholds for joint filers are double those limits. The government will base eligibility on Americans’ most recent filed tax return.
- It expands the child tax credit for one year. It will increase to $3,600 for children under 6 and to $3,000 for kids between 6 and 17.
- The plan puts about $20 billion into Covid-19 vaccine manufacturing and distribution, along with roughly $50 billion into testing and contact tracing.
- It adds $25 billion in rental and utility assistance and about $10 billion for mortgage aid.
- The plan offers $350 billion in relief to state, local and tribal governments.
- The proposal directs more than $120 billion to K-12 schools.
- It increases the Supplemental Nutrition Assistance Program benefit by 15% through September.
- The bill includes an expansion of subsidies and other provisions to help Americans afford health insurance.
- It offers nearly $30 billion in aid to restaurants.
- The legislation expands an employee retention tax credit designed to allow companies to keep workers on payroll.’
Enactment of the American Rescue Plan will mark the completion of the Biden administration’s first major fiscal initiative.
The president and congressional Democratic leaders have indicated that they hope to move to an economic recovery package – known as the “Build Back Better” plan – later this year, depending on the state of the economy. The Build Back Better plan is expected to emphasize infrastructure investments, health care spending, and climate change mitigation, along with incentives for research and development and domestic manufacturing. It could be financed in large part by permanent tax increases on large corporations and affluent individuals. We may get a clearer idea of the tax and spending proposals President Biden intends to include in that plan when he releases his budget proposal for fiscal year 2022 later this spring.
Although no final decisions have been made, the president has not ruled out the possibility of moving this package under budget reconciliation protections, as he did with the American Rescue Plan. (Congressional Democrats will have an opportunity in the coming months to use budget reconciliation for fiscal year 2022.) Opting for reconciliation would once again clear a path for Democrats to get a key White House proposal through Congress without having to attract Republican votes.
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