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What's Inside Biden's $1.9 Trillion Stimulus Package?

by
Julie Farless
on
1/14/2021
What's Inside Biden's $1.9 Trillion Stimulus Package?

News has broken regarding the $1.9 trillion stimulus proposal that President-elect Joe Biden plans to bring forward after his inauguration next week.

Titled the American Rescue Plan, the package enhances many of the measures passed in the $3 trillion CARES Act from March as well as the $900 billion legislation passed in December.

Now that Democrats will control both chambers of Congress and the White House, Biden is pushing for bold steps to address immediate needs and get the coronavirus pandemic under control. The administration’s announcement says he is “laying out the first step of an aggressive, two-step plan for rescue​, from the depths of this crisis, and ​recovery​, by investing in America, creating millions of additional good-paying jobs, combatting the climate crisis, advancing racial equity, and building back better than before.”

What’s inside the American Rescue Plan?

Increased stimulus payments

Biden’s plan calls for sending an additional $1,400 per person to eligible recipients. This would be in addition to the $600 payments approved by Congress in the December legislation and (mostly) sent out earlier this month – bringing the total to $2,000.

The new payments would also go to adult dependents that were excluded from earlier rounds, such as some children over 17. Also included would be households with mixed immigration status, as the first round of $1,200. Checks left out the spouses of undocumented immigrants who do not have Social Security Numbers. 

Rental assistance and an eviction moratorium

The plan would provide $25 billion in rental assistance for low- and moderate-income households who lost jobs due to COVID-19. This is in addition to the $25 billion provided in the December bill.

$5 billion would also be provided to help struggling renters pay utility bills, and Biden is calling for $5 billion to help state and local governments assist those at risk of homelessness.

Also included would be an extension on the federal eviction moratorium, which was set to expire at the end of January, until September 30th, 2021. People with federally guaranteed mortgages could also apply for forbearance until that date.

Enhanced unemployment benefits

Biden’s plan would increase the federal unemployment boost to $400 per week, a boost from the $300 weekly aid contained in the December bill. The payments would also be extended through September.

Additionally, two pandemic unemployment programs would be extended through September: The Pandemic Emergency Unemployment Compensation program (for those who have exhausted their regular state jobless payments) and the Pandemic Unemployment Assistance program (provides benefits to the self-employed, independent contractors, gig workers and other specific groups affected by the pandemic).

Small business assistance

Biden’s plan calls for providing $15 billion to create a new grant program to help small business owners (separate from the Paycheck Protection Program).

Additionally, he proposes making a $35 billion investment in some state, local, tribal, and non-profit financing programs that make low-interest loans and provide venture capital to entrepreneurs.

Emergency paid leave

The plan would also reinstate the paid sick and family leave benefits which expired at the end of 2020 until September 30th of this year.

The benefit would be extended to workers employed at businesses with more than 500 employees and less than 50, as well as federal workers who were excluded from the original program in 2020.

The proposal would provide over 14 weeks of paid leave for people who are sick, quarantining, or caring for a child whose school or care center is closed. The government would reimburse employers with less than 500 employees for the full cost of providing that leave.

Hunger assistance

The plan would extend a 15% increase in food stamp benefits through September, originally set to expire in June. Another $3 billion would be invested in helping women, infants, and children secure food, and supply US territories with $1 billion in nutrition assistance.

Additionally, he would create partnerships with restaurants to provide food for hungry Americans and jobs to restaurant workers who had been laid off.

Temporary increase in tax credits

For the Earned Income tax Credit (EITC), Biden proposes:

  • Raising the maximum credit for a year to about $1,500 for childless adults,
  • Increasing the income limit for the credit to about $21,000, and
  • Expanding the age range of eligibility to cover older workers as well.

Biden also wants to boost the Child Tax Credit to $3,600 for children under 6 $3,000 for those aged 6 – 17 for one year. The credit would also be fully refundable.

Child care and child tax credits

Biden’s plan calls on Congress to create a $25 billion emergency fund as well as add $15 billion to an existing grant program to help child care providers, including family child care homes, to pay for rent, utilities, and payroll, and increased costs associated with the pandemic like personal protective equipment.

He also proposes expanding the child care tax credit for one year so families can get back up to half of their spending on child care for children under the age of 13.

Health insurance premium subsidies

Biden’s plan asks Congress to subsidize the premiums of those who lost their work-based health insurance through September of this year. He also wants to expand the Affordable Care Act’s premium subsidies to cap the amount enrollees must pay for coverage at no more than 8.5% of income.

Aid to states and schools

The plan would send $350 billion to state and local governments to keep their frontline workers employed, increase testing, distribute vaccines, reopen schools, and maintain vital services.

Vaccine and testing support

Biden’s plan calls for investing $20 billion in a national vaccination program, $50 billion for testing, and funding to hire 100,000 public health workers.

A $15 hourly minimum wage

Biden’s plan calls on Congress to raise the minimum wage to $15 an hour. It also calls for an end to the tipped minimum wage and the sub-minimum wage for people with disabilities.

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Julie Farless

Julie Farless

Martinez & Shanken, PLLC is a Certified Public Accountant (CPA) firm based in Gilbert, Arizona. We provide a full range of accounting, bookkeeping, consulting, outsourcing and business services, but we specialize in tax preparation. We work with you to ensure that your personal or business processes are conducted in a manner that ensures ongoing integrity in your financial transactions. We are available to answer your questions and help with your ongoing tax planning and changing business needs.

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