President Joe Biden signed the $1.9 trillion coronavirus relief package into law on Thursday.
The broad package is designed to alleviate the financial hardships brought on by the coronavirus pandemic — especially among America's lowest earners who have borne the brunt of the economic fallout — as well as strengthen the vaccine rollout that promises an eventual end to the health crisis.
"In the weeks that this bill has been discussed and debated, it's clear that an overwhelming percentage of the American people — Democrats, independents, our Republican friends — the people out there made it clear they very strongly support the American Rescue Plan," Biden said shortly before he signed the bill.
The legislation includes $1,400 stimulus payments, the extension of key unemployment programs, aid to small businesses, around $350 billion for state and local governments, an increase in tax credits for low- and middle-income families, and $160 billion for a national program on vaccination and testing. It also marks Biden's first major legislative win since taking office in January.
"The American Rescue Plan is a historic moment unlike any in living memory. Congress is getting $1.9 trillion out the door to millions of families, the unemployed, small businesses, and communities," Claudia Sahm, a senior fellow at Jain Family Institute and former Federal Reserve economist, told Yahoo Money. "The Democrats have learned their lesson from the mistakes after the Great Recession. Today’s bill is the one the American people needed in 2012 and did not get. They are getting it today."
Vice President Kamala Harris joined the president in the Oval Office for the signing. The president was set to sign the bill on Friday, but the signing was moved up because Congress enrolled the bill quicker than expected, according to White House Press Secretary Jen Psaki.
The bill passed through reconciliation in the Senate on Saturday and the amended version passed the House on Wednesday. No Republicans in either chamber supported the legislation.
The government spent more than $2.5 trillion in stimulus at the beginning of the pandemic — including the $2.2 CARES Act passed in March 2020 — followed by a $900 billion stimulus package in December. The American Rescue plan has the second-highest stimulus price tag after the CARES Act.
Numerous amendments were made to Biden's initial "American Rescue Plan." An earlier version of the bill, that the House also approved included a minimum wage increase to $15, but that provision was stripped out of the final version that passed the Senate after the chamber's parliamentarian ruled the measure can't be passed by budget reconciliation.
Read more: Here's what's in Joe Biden's $1.9 trillion 'rescue plan' that could help your wallet
The income thresholds for stimulus checks were also narrowed in the latest version, while the weekly unemployment benefits were reduced to $300 from $400. The latest legislation also includes a new tax break for jobless workers, forgiving taxes on up to $10,200 in unemployment benefits.
What's in the bill?
Likely the most popular provision is a third round of stimulus checks. Eligible Americans will receive a $1,400 stimulus payment — plus $1,400 for any dependent.
A single filer making up to $75,000 will get the full payment, while those earning up to $80,000 will get a reduced amount. Joint filers making up to $150,000 will get the full $2,800, while those earning up to $160,000 will get a smaller amount. Previously in the House version, the phase-out thresholds were $100,000 for single filers and $200,000 for joint filers.
Jobless workers also get a major boost from the plan.
The extra unemployment benefits will continue at $300 a week and are extended through September 6. Before, they were set to expire on March 14. The legislation also extends the program that provides jobless benefits to workers who typically don’t qualify for regular benefits as well as the jobless program that extends unemployment benefits for individuals who have exhausted their weeks.
The newly added tax exemption for the first $10,200 of unemployment benefits is applicable for the 2020 tax year and applies to households making up to $150,000.
Read more: Here's what to do if you haven't gotten your stimulus check
The plan also improves the Child Tax Credit (CTC), making it refundable and worth up to $3,000 per child — or $3,600 for a child under 6 — for 2021. The provision also allows American families to receive periodic payments for the credit for one year beginning in July. The eligibility requirements for the Earned Income Tax Credit (EITC) are also expanded under the new law.
The plan places a federal moratorium on evictions and foreclosures until the end of September and allocates billions of dollars toward food insecurity. It also includes measures on health care access and student loan breaks.
Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova
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