Here’s What’s in Biden’s ‘American Rescue’ Relief Plan
President-elect Joe Biden wants the government to give Americans more vaccines to smother the pandemic’s spread, and more cash to combat its economic hardships, he said Thursday night in an address to the nation where he laid out his $1.9 trillion relief bill proposal dubbed the “American Rescue Plan.”
Key Components of the American Rescue Plan
- A $20 billion national vaccination program
- Additional stimulus payments and unemployment benefits
- $15-per-hour minimum wage
- Eviction and foreclosure protections through September
- Larger and expanded tax credits for families and low-wage workers
- No mention of student loan relief
To fight the pandemic, Biden wants to create a $20 billion national vaccination program including community vaccination centers and mobile units to take the all-important immunizations to hard-to-reach areas, all free of charge to everyone, regardless of immigration status.
For individuals, the plan offers $1,400 stimulus payments (down from the $2,000 Biden promised voters earlier this month), extends and supplements pandemic unemployment benefits with an extra $400 per week through September, and automatically adjusts the length and amount of those programs according to economic conditions. Moratoriums on evictions and foreclosures would also be extended through September.
Biden’s announcement of the plan came shortly after a jobs report that shows the economic recovery has begun to reverse itself as the pandemic continues to devastate the economy. On the day Biden gave his address, 3,769 people died of COVID-19 in the U.S. and 229,386 more new cases were confirmed as the pandemic continues its deadly spread.
“It’s not hard to see that we are in the middle of a once-in-several generations economic crisis within a once-in-several generations public health crisis,” Biden said in a speech. “A crisis of deep human suffering is in plain sight. And there is no time to waste. We have to act and we have to act now.”
Biden said the $1,400 checks would “finish the job” of getting $2,000 in relief into the hands of individuals who need it, implying that the $600 payments from December counted toward his promise of a $2,000 stimulus payment.
For workers, the rescue plan would also provide emergency paid sick leave to those who currently lack that benefit, to help contain the spread of the virus, and increase the federal minimum wage to $15 per hour from its current rate of $7.25. Another provision would subsidize health care in an effort to provide insurance for some of the 30 million people who currently lack coverage.
The rescue package would also send $170 billion to re-open K-12 schools and colleges nationwide, and provide $350 billion in funding to state, local, and territorial governments to support public services and keep public workers on the job. Another $25 billion would go toward keeping child care services open.
School reopenings and child care support, if successful, would make a big difference for individuals, said Michael Madowitz, an economist at the Center for American Progress, a liberal think tank.
“That’s life-changing, certainly for me and every other person with kids who has been doing this for six months,” he said.
Biden’s plan would also create tax credits for families, including a child care tax credit of up to $4,000 per child, increasing the existing Child Tax Credit, and expanding the Earned Income Tax Credit for low-wage workers to cover more people, including those without children making up to $21,000 (up from its current limit of $15,820), and increasing the maximum benefit for childless adults from the current $538 to around $1,500.
The proposed aid package is broad enough to significantly help the economy, Madowitz said.
“Someone has thought really hard about this, which is maybe not the impression that you got from the last White House,” Madowitz said.
Not only does the proposal contain direct help for individuals, of which the extra unemployment aid will likely be the most significant, it includes “less sexy” but vital provisions, such as much-needed aid to state and local governments, Madowitz said.
Economists at Moody’s Analytics wrote in a commentary Friday that the package “would provide a large boost to the economy” and restore nearly full employment by fall 2022 if enacted in its proposed form.
This rescue package is not the first time Biden has played a role in managing a national economic disaster: During the financial crisis of the early 2000s, Obama and Biden oversaw relief efforts that Madowitz said were not strong enough and resulted in a slower than necessary economic recovery. He said Biden, and economists in general, seemed to have learned from that experience.
Notably, there was no mention of student loan relief in a fact sheet the Biden transition team distributed about the rescue plan or in his remarks delivered Thursday night, despite Biden having said in the past that he supports forgiving $10,000 of student loan debt as a form of pandemic relief. The Department of Education has ordered a halt to student loan collections, interest, and payments during the pandemic, but these protections expire on Jan. 31 unless extended.
The most important part of Biden’s proposal is the money spent getting vaccines manufactured and administered, according to Dennis Hoffman, a professor of economics at Arizona State University, who found grounds to criticize the economic aspects of the proposal while acknowledging that fiscal relief was necessary.
“The economy needs more stimulus,” Hoffman said. “Momentum is lagging.”
However, Hoffman said the government would be better off taking an approach that gave money to the families, small businesses, and state and local governments that have lost the most income due to the pandemic instead of the broader distribution of money that Biden has proposed.