Congressman Lou Correa (CA-46) voted to pass the American Rescue Act, a $1.9 trillion COVID-19 relief bill that provides immediate assistance to millions of American families. In addition to $1,400 cash stimulus payments, the American Rescue Act provides families with up to $300 a month in cash per child by expanding Child Tax Credit for 27 million children. It gives everyday workers up to $6,728 in tax breaks by expanding the Earned Income Tax Credit for 15 million workers. The legislation helps 40 million Americans by investing billions of dollars in housing, rental, and nutrition assistance. And it expands access to safe and reliable child care and affordable health care and extends unemployment insurance for 18 million families.
Rep. Lou Correa said, “For nearly a year, Americans have been suffering. With millions out of work, families have been forced to endure months of uncertainty and fear. The American Rescue Act answers the needs of all Americans and provides swift and substantial relief to struggling families.”
BACKGROUND: The American Rescue Act is a $1.9 trillion-dollar economic stimulus package to help millions of struggling families affected by COVID-19. This landmark legislation provides substantial support for American families and the United States. The legislation:
INCREASING THE DIRECT PAYMENTS TO WORKING FAMILIES
Providing Working Families an Additional Direct Payment of $1,400 Per Person – Bringing the Total Relief Payment to $2,000 Per Person: In December, Congress enacted a Covid relief package that provided a direct payment of $600 per person. The American Rescue Plan Act builds on that down payment, providing another $1,400 per person.
EXPANDING CHILD TAX CREDIT, THEREBY CUTTING CHILD POVERTY IN HALF
Making the Child Tax Credit Fully Refundable and Increasing Its Size for 2021: The bill makes the child tax credit fully refundable for 2021 and increases the annual amount from the current $2,000 per child to $3,000 per child ($3,600 for a child under age 6). Currently, because the child tax credit is not fully refundable, there are 27 million American children who do not receive the full value of the current $2,000 tax credit because their parents do not earn enough money.
Directing the Secretary of the Treasury to Issue Advance Payments of the Child Tax Credit: The bill directs the Secretary of the Treasury to issue advance payments of the child tax credit, based on the parents’ 2019 or 2020 tax returns. Under the bill, parents could receive regular periodic monthly advance payment of the tax credit to ensure families have access to assistance throughout the year, rather than just at tax time. The advance payments would begin on July 1, 2021.
Experts Estimate This Policy Would Cut the Child Poverty Rate in Half: A study by Columbia University found that such a proposal would cut the child poverty rate in the United States in half.
ESTABLISHING A NATIONAL COVID-19 VACCINATION PROGRAM AND INCREASING VACCINATIONS ACROSS THE COUNTRY
Providing $7.5 billion for the CDC to prepare, promote, distribute, monitor, and track COVID-19 vaccines.
Providing $7.5 billion for FEMA to establish vaccination sites across the country.
Providing $600 million to be directed to the Indian Health Service for vaccine-related activities.
Providing $5.2 billion to the Biomedical Advanced Research and Development Authority (BARDA) to support advanced research, development, manufacturing, production, and purchase of vaccines, therapeutics, and ancillary medical products for COVID-19.
Providing $1 billion for the CDC to undertake a vaccine awareness and engagement campaign.
SCALING UP COVID-19 TESTING, CONTACT TRACING, AND MITIGATION, IN ORDER TO STOP THE SPREAD OF THE VIRUS
PROVIDING RESOURCES FOR OUR SCHOOLS
Providing Nearly $130 billion to Help K-12 Schools Re-Open Safely: This bill makes nearly $130 billion available to states and school districts for immediate and long-term relief so they can work with public health experts to safely re-open schools and make up for lost time in the classroom.
Includes Funding to Support Colleges and Universities: This bill includes nearly $40 billion for institutions of higher education to help make up for lost revenue due to the pandemic. Requires institutions to dedicate at least half of their funding for emergency financial aid grants to students to help prevent hunger, homelessness and other hardships facing students as a result of the pandemic.
Broadband: Helping to Bridge the Digital Divide By Providing $7.6 Billion to Expand Internet Connectivity to Students and Communities.
EXTENDING UNEMPLOYMENT BENEFITS
Currently, Federal Unemployment Benefits Expire on March 14: Specifically, the federal supplemental unemployment benefit (FPUC), the Pandemic Unemployment Assistance Program (PUA) program (which provides unemployment benefits to some self-employed and pandemic-affected individuals who do not qualify for regular state unemployment benefits), and the Pandemic Emergency Unemployment Compensations (PEUC) program (which provides additional weeks for beneficiaries who have exhausted their normal benefits) expire on March 14.
Extending and Increasing the Federal Supplemental Unemployment Benefit (FPUC): The bill extends the federal supplemental unemployment benefit through August 29 and increases the monthly supplemental benefit from the current $300 per month to $400 per month.
Extending the Critical Pandemic UI Programs: The bill also extends both the Pandemic Unemployment Assistance (PUA) program and the Pandemic Emergency Unemployment Compensation (PEUC) program through August 29.
EXPANDING HEALTH COVERAGE AND LOWERING AMERICANS’ HEALTH CARE COSTS
Expanding Subsidies in ACA Marketplaces: The bill significantly expands the subsidies in the ACA Marketplaces to cover more middle-class families and to be more generous for those already receiving them, for 2021 and 2022. Specifically, it removes the current cap that makes any family with income above 400% of the poverty level ineligible for any subsidies. Under the bill, no one will have to pay more than 8.5 percent of their income for a silver plan in the ACA marketplaces. It also provides that individuals below 150% of the poverty level pay no premiums at all compared to 4% of their income currently. The Urban Institute estimates that these provisions could lead to 4.5 million more Americans gaining coverage.
ACA Subsidies for Those on Unemployment: The bill provides that any individual who receives unemployment at any point in 2021 is treated as if their income were 133% of the poverty level for the purposes of the ACA marketplace subsidy. As a result, they can purchase an ACA silver plan for zero premium.
New Incentives for Medicaid Expansion: The bill provides a new incentive for the 12 states that have not expanded Medicaid to do so by temporarily increasing the base Federal Medical Assistance Percentage (FMAP) by five percentage points for two years for any state that newly expands. If all 12 remaining states expanded Medicaid, more than 2 million uninsured people would gain access to Medicaid.
COBRA Subsidies: Provides an 85% subsidy for individuals who lose their job and choose to use COBRA to continue their existing employer-sponsored health coverage through September 30, 2021. Currently, those who would like to choose COBRA are required to pay the full cost of their coverage, including the employer contribution, making the cost prohibitive and preventing many from doing so.
HOUSING ASSISTANCE
Provides $26 Billion for Emergency Rental Assistance, to Help Ensure Struggling Families Continue to Have a Safe Place to Live During This Pandemic: The bill provides $26 billion in rental assistance: $21.2 billion for emergency rental and utility assistance to states, territories, counties, and cities to help stabilize renters during the pandemic, and help rental property owners of all sizes continue to cover their costs; $5 billion for emergency vouchers to transition those experiencing or at risk of homelessness, survivors of domestic violence, and victims of human trafficking to stable housing; $100 million for rural housing; $750 million for Native American housing; $100 million for housing counseling; and $20 million for fair housing.
Provides $10 Billion to Help Homeowners Struggling to Afford Their Housing as a Result of the Coronavirus Pandemic: The bill provides $10 billion for the Homeowner Assistance Fund that allocates funds to states, territories, and tribes to address the ongoing needs of homeowners struggling to afford their housing due directly or indirectly to the impacts of the COVID-19 pandemic by providing direct assistance with mortgage payments, property taxes, property insurance, utilities, and other housing related costs.
Supports Solutions for Americans Experiencing Homelessness: The bill provides $4.75 billion for state and local governments – through the HOME Investment Partnership program – to finance supportive services, affordable housing and the acquisition of non-congregate shelter spaces for the hundreds of thousands of Americans experiencing homelessness during this pandemic.
Provides $5 Billion to Those Most in Need to Help Pay Their Utility Bills.
FOOD SECURITY
Makes Key Investments in Food Security: In response to persistent hunger in communities across the country, this bill helps combat increasing food insecurity with key investments in SNAP, WIC, Pandemic EBT and other critical nutrition assistance.
Maintains and Expands the Pandemic-EBT (P-EBT) Program: The bill invests more than $5 billion in P-EBT so that low-income families have access to school meals and food assistance during both the school year and summer months.
Expands Access to the USDA’s Child and Adult Care Food Program (CACFP): The bill temporarily expands the age of eligibility for CACFP at emergency homeless shelters to ensure more young adults can access needed nutrition support.
RAISING THE MINIMUM WAGE TO $15 PER HOUR BY 2025
Gradually Raises the Federal Minimum Wage to $15 Per Hour By 2025 – the First Increase in More Than a Decade: The coronavirus pandemic and economic crises have pulled back the veil on the unconscionable economic disparities that working women, low-income families and other vulnerable communities have faced for decades. This bill gradually increases the minimum wage to $15 an hour by 2025 and guarantees that tipped workers, youth workers and workers with disabilities are paid the full federal minimum wage – increasing wages for at least 27 million American workers.
ENSURING ACCESSIBLE AND AFFORDABLE CHILD CARE AND EARLY LEARNING FOR FAMILIES
Rescues the Child Care System from the Brink of Collapse: The bill provides $39 billion through the Child Care and Development Block Grant for child care providers as the country reopens and provides financial relief for families struggling to cover tuition.
Makes a Number of Improvements in the Child and Dependent Care Tax Credit, for 2021: The bill makes several improvements to the Child and Dependent Care Tax Credit for 2021, including increasing the amount of child and dependent care expenses that are eligible for the credit to $8,000 for one qualifying individual and $16,000 for two or more qualifying individuals (such that the maximum credits would now be $4,000 and $8,000).
Increases the Annual Funding Level for the Child Care Entitlement to States. The bill increases the annual funding level for the Child Care Entitlement to States, from $3.525 billion per year to $3.550 billion per year.
Includes Critical Funding for Head Start: The bill provides $1 billion for Head Start to equip facilities with the resources to safely stay open, buy PPE, technology and hire more staff and ensure families can continue to access quality early learning opportunities.
PROVIDING ADDITIONAL FUNDING FOR TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF)
CREATING PANDEMIC EMERGENCY FUND TO HELP LOW-INCOME FAMILIES WITH CHILDREN
Creating A $1 Billion Pandemic Emergency Fund: The bill establishes a $1 billion Pandemic Emergency Fund, with the fund to be distributed to the states for providing emergency assistance to low-income families with children.
EXTENDING AND IMPROVING VARIOUS OTHER TAX CREDITS
Making A Number of Improvements to the Child and Dependent Care Tax Credit, for 2021: The bill makes several improvements to the Child and Dependent Care Tax Credit for 2021, including increasing the amount of child and dependent care expenses that are eligible for the credit to $8,000 for one qualifying individual and $16,000 for two or more qualifying individuals (such that the maximum credits would now be $4,000 and $8,000).
Strengthening the Earned Income Tax Credit for Childless Adults, for 2021: The bill raises the maximum Earned Income Tax Credit for childless adults from roughly $530 to close to $1,500, raises the income limit for the credit from about $16,000 to about $21,000, and eliminates the age cap for older workers, for 2021. This step will benefit 15 million low-income workers like cashiers and delivery drivers.
Extending Employee Retention Credit: The bill extends through December 31, 2021, the Employee Retention Credit, created by the CARES Act, which expired on December 31, 2020.
Extending Payroll Tax Credits for Paid Sick Leave and Paid Family and Medical Leave: The bill extends, from March 31, 2021 to September 30, 2021, the payroll tax credit for employers created by the Families First Coronavirus Response Act for use to help employers defray the costs of the paid sick leave and paid family and medical leave required for employees impacted by the COVID-19 pandemic under that Act.
SUPPORTING SMALL BUSINESSES AND NONPROFITS
Increases Paycheck Protection Program (PPP) Funding and Expands Eligibility to Ensure It Reaches Nonprofits of All Sizes and Types: The bill includes $7.25 billion in additional funding for PPP and expands eligibility of 501(c) nonprofits of all sizes and types, except for 501(c)4 lobbying organizations.
Creates a Restaurant Revitalization Fund: The bill provides $25 billion for a new program at SBA to offer assistance to restaurants and bars with 20 or fewer locations that have been hit hard by the pandemic. $5 billion is set aside specifically for smaller establishments with less than $500,000 in 2019 annual revenue. During the first 21 days, applications from restaurants owned and operated by women, veterans, or socially and economically disadvantaged individuals will receive priority.
Supports Small Businesses By Providing $15 Billion for COVID-19 Emergency Grants Through the Economic Injury Disaster Loan (EIDL) Program: The bill includes an additional $15 billion for targeted EIDL Advances to help those who applied for relief in 2020 but did not receive the full $10,000 grant.
Establishes the Community Navigator pilot program: this program increases the awareness of and participation in COVID-19 relief programs for business owners currently lacking access, with priority for businesses owned by socially and economically disadvantaged individuals, women, and veterans
State Small Business Credit Initiative: provides $10 billion to support up to $100 billion in small business financing through state, territorial, and tribal government programs. Of this amount, $2.5 billion is dedicated for support to business enterprises owned and controlled by socially and economically disadvantaged individuals, including minority-owned businesses.
PROVIDING SUPPORT FOR FIRST RESPONDERS AND OTHER ESSENTIAL WORKERS
Providing $350 billion For New Coronavirus Relief Funds To Help Keep First Responders, Frontline Health Care Workers, and Other Essential Workers on the Job: The bill provides $350 billion for new Coronavirus Relief Funds for states, localities, the U.S. Territories, and the Tribal Governments, to help keep critical workers on the job. These critical workers include frontline health care workers, police, firefighters, transit workers, teachers, EMS, and other vital workers who help keep us safe. Since the pandemic began, 1.4 million of these types of workers have lost their jobs, due to the tight budgets caused by the high expenses and reduced revenues created by the pandemic.
Requiring the Funds to Be Used to Address the Pandemic or Its Negative Economic Impacts. The bill provides that the funds are available until expended and must be used to address the pandemic or its negative economic impacts, including replacing revenue lost, delayed, or decreased as a result of the pandemic.
PROVIDING CERTAINTY FOR FARM COMMUNITIES, GROWERS, AND PRODUCERS
Strengthens the Food Supply Chains: Provides $3.6 billion for USDA to increases food donations, improves worker safety, invests in infrastructure.
Provides Debt Relief for Socially Disadvantaged Farmers and Ranchers: This bill provides $4 billion in USDA farm loan assistance to help farmers and ranchers of color who have faced discrimination for decades and to help them respond to the economic impacts of the pandemic.
Includes Funding to Support Farmers of Color: This bill includes $1 billion in assistance and support for community-based organizations and 1890 Land Grant and other minority-serving institutions that work with farmers of color on land access, financial training, property issues, and training the next generation of farmers, ranchers and forest land owners and operators.
Relief for Rural America’s health needs: This bill provides $500 million in USDA rural initiatives to help hospitals expand vaccine distribution, purchase needed medical supplies, bolsters telehealth capacity and helps hospitals facing lost revenue and high costs.
IMPROVING WORKER SAFETY & WORKERS’ COMPENSATION COVERAGE
Strengthens Workplace Protections for Essential Workers: The bill provides the Department of Labor $150 million to implement COVID-19 worker protection programs and continued UI oversight – including at least $75 million for OSHA enforcement.
Ensures Workers’ Compensation Coverage for Frontline Maritime and Federal Workers: Establishes a presumption that COVID-19 is work-related and authorizes eligibility for medical benefits, lost wages and survivor benefits for longshore and shipyard workers as well as federal and postal workers.
SUPPORTING VETERANS AND SERVICEMEMBERS
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