As the countdown begins for Joe Biden's inauguration, his day one policy plans, a $1.9 trillion “American Rescue Plan,” was unveiled Thursday. The plan picks up from the March 2020 CARES Act, which was introduced in response to the pandemic, at the cost of $2.2 trillion.
During the announcement, Biden said, “I know what I just described will not come cheaply, but failure to do so will cost us dearly.” He doubled down on his belief that investments in economic recovery are needed to strengthen America’s long-term standing as a world power, as well as filling a moral obligation to care for the American people.
A key part of the plan is a third stimulus payment of $1,400. This amount would be added to the second stimulus payment of $600 per individual, authorized in late December, for a maximum total of $2,000 for eligible Americans. Thus, it is an increase in the first round of direct payments, authorized by the CARES Act, of up to $1,200 for eligible Americans.
The House of Representatives previously voted in favor of $2,000 payments, but the Senate declined to vote on the measure. So, a $1,400 top-up may be deemed an agreeable compromise for more moderate Senators, like Joe Manchin (D-W.Va). Ultimately, passing it will depend on how cooperative legislators want to be.
Other aspects of the aid package include a weekly $400 federal unemployment supplement, which would begin once the current $300-per-week federal supplement expires in March. The plan intends that this would last through September 2021. It also extends Pandemic Unemployment Assistance for self-employed people.
$30 billion is set aside as rental assistance for people struggling to pay rent and utilities, along with $5 billion to states and municipalities to offer emergency housing. Census Bureau data crunched by the Center for Budget and Policy Priorities found that almost one in five renters lived in households behind on rent in December. Biden further noted that a plan to extend the eviction and foreclosure moratoriums will be announced next week.
Biden also proposed increasing the child tax credit and making it a refundable tax credit for 2021, giving more money to low and middle-income households. He slates the tax credit for children 17 and younger to expand from $2,000 to $3,000, while families with children under 6 would be eligible for an additional $600 credit.
Small businesses would also get funds in Biden’s plan via low-interest loans and grants. States and local and tribal governments would get a total of $350 billion in aid. K-12 schools would get $130 billion and $35 billion for colleges and universities. While Republicans have objected to money for state and local governments in the past, an incoming official said, “the entire Senate Democratic caucus is on board.”
Biden’s announcement also promised to distribute 100 million vaccine shots by his 100th day in office. According to Rob Shapiro, founder of economic policy advisory Sonecon and former undersecretary of commerce under President Bill Clinton, Biden has set up his White House staff to handle the logistics around vaccine administration and other pandemic mitigation efforts.
Overall, $400 billion of the $1.9 trillion is specifically geared toward combating the virus, including $160 billion to go toward a national vaccination program. Biden said, “the vaccine rollout in the United States has been a dismal failure thus far, we need about $400 billion in funding from Congress... I’m convinced we are ready to get this done.”
Biden's team also believe they can open K-8 schools within his first 100 days in office. An official said, “we can buy rapid antigen tests right away that will help us start to do testing in places like schools, to support our school reopening.” They believe if they give school districts, communities the $130 billion specifically allocated to go toward schools, they will have the resource they cannot afford right now because of the economic crisis everyone is in. Biden said, specifically, “that means more testing and transportation, additional cleaning and sanitizing services, protective equipment, and ventilation systems in the schools.”
If the first few months are successful in controlling the pandemic, it will allow Biden to widen his priorities going forward. For example, Biden envisions creating millions of jobs by investing in various facets of American manufacturing and research to boost domestic output. The American Rescue Plan also includes raising the minimum wage to $15, more than double the current federal rate of $7.25 per hour. With this, Biden said, “people tell me that’s going to be hard to pass, well, Florida just passed it…the rest of the country is ready to move as well.” For context, Florida’s minimum wage will increase in phases from its current $8.56 per hour and reach $15 in 2026.
Despite pleas for unity, Republicans are not coming forward in support of Biden’s plan. Sen. Marco Rubio said, “President-elect Biden served in [the] Senate for over 35 years. So, he knows the plan he outlined tonight can't pass 'quickly' & will delay the 2k for hard-hit Americans.” While Rep. Kevin Brady of Texas released a statement declaring that “true to form and his signature failed 'stimulus,' President-elect Biden launches yet another economic blind buffalo that does nothing to save Main Street businesses, get people back to work, or strengthen the economy. Special interests and liberals are cheering,” he continued, “while the jobless and Main Street are left shaking their heads.”
Directly after the plan was released, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer sent out a joint statement praising it.