What the $1.9 trillion COVID relief bill Congress passed means for you
The nearly $2 trillion American Rescue Plan (ARP) passed by the House Wednesday afternoon and is now set to be signed into law by President Biden on Friday. The legislation contains numerous provisions designed to help Americans who’ve been dealing with the coronavirus pandemic and its economic consequences for a full year, although Republicans argue it comes with a steep cost.
The plan is the third pandemic relief package provided by the federal government, following the two signed last year by then-President Donald Trump. While those bills garnered bipartisan support, the latest package received zero Republican votes in either chamber despite having widespread support among Americans, according to a number of polls.
"The legislation is about giving the backbone of this nation — the essential workers, the working people who built this country, the people who keep this country going — a fighting chance," Biden said in a statement following its passage.
Republicans have criticized the bill as a Democratic wish list, and have suggested its size will not only balloon the federal deficit but also trigger an inflationary cycle, which would make economic recovery substantially more difficult. Senate Minority Leader Mitch McConnell said last week that it is “a wildly out-of-proportion response to where the country is at the moment.” GOP members were particularly critical of the funding for state and local governments, a provision they were able to strip from December’s legislation.
COVID-19 has killed more than 528,000 Americans during the past year-plus, as well as causing financial distress for millions. The economy added 379,000 jobs in February, but there are still nearly 10 million fewer jobs than there were a year ago, prior to the pandemic.
Here are the ways the legislation could affect you.
Checks
If you received the previous direct government payments, you’ll likely qualify for this one, but there are exceptions. The biggest is a lowering of the eligibility threshold, so if you made between $80,000 and $100,000 as an individual or $160,000 and $200,000 as a couple, you received checks last time, but will not this time because of a concession made to moderate Democrats last week.
If you make $75,000 or under, you’ll receive the full $1,400 payment. If you’re between $75,000 and $80,000, you’ll get a portion of that sum.
Another change from the previous two bills is that adult dependents ages 17 and up are now eligible to receive payments. Previously, only dependents 16 and under were eligible. A family of four below the income thresholds could receive as much as $5,600 total in direct payments.
It’s important to note that your eligibility is based on your most recent tax filing, so it will be dependent on your 2019 income unless you’ve already filed for 2020. A spokesperson for the Senate Finance Committee told Yahoo News that if your income dropped in 2020, you will still be eligible for the check if you file your taxes late, but there will be a delay in processing your payment, so it is advisable to file as soon as possible. If your income went from below the threshold in 2019 to above it in 2020, there will be no clawing back of the payment if you file your taxes late.
The last round of payments was sent out within days of the bill’s signing, and the White House has emphasized it is striving for similar expediency. You can track your payment on the Internal Revenue Service website.
Child tax credit
The ARP also expanded the child tax credit, so parents will receive $3,600 for each child age 6 and under and $3,000 per child ages 6 to 17. (Previously, the tax credit was $2,000 for age 16 and under and $500 for age 17.) Half the credit will begin being paid out in July, with the other half being applied to federal income taxes. The increases would begin to phase out for heads of households making $112,500 and married couples making $150,000. The plan also raises tax credits to cover the care of children and dependents.
Another change from the previous credit is that the taxes are fully refundable, meaning that parents will be paid fully even if their tax bill reaches zero, which will help the lowest-income families. (Only about $1,400 of the current credit was refundable under the old regulations.) According to an analysis by the Center on Poverty and Social Policy at Columbia University, the measure could cut childhood poverty in the United States in half.
The legislation also increases the earned income tax credit for low-wage workers without children from $543 to $1,502 and expands those eligible for it.
Unemployment benefits
Federal supplemental unemployment insurance payments will continue at $300 per week through Sept. 6. Additionally, under the ARP, the first $10,200 in federal unemployment you receive will count as nontaxable income, lowering your tax bill. The additional unemployment payments were set to expire on March 14, prior to the signing of the extension.
Health care
The legislation contains $34 billion to temporarily lower the cost of premiums for those purchasing their insurance on the Affordable Care Act marketplace, limiting payments for certain plans at 8.5 percent of an individual’s income. For two years, higher earners would become eligible for the subsidies while those with lower incomes would see their bill further reduced.
The ARP will also cover the cost of insurance for the recently unemployed who are now relying on the COBRA government health care plans. While the original House bill covered 85 percent of the cost, a Senate amendment bumped it to 100 percent.
Vaccine, schools, housing relief and more
Other provisions in the bill include:
$20 billion toward vaccinations, including community vaccination centers and mobile deployment. Additionally, there is $10 billion in funding for personal protective equipment and $50 billion for testing, contact tracing and studying the virus variants.
$5 billion directed to forgive Department of Agriculture loans for farmers of color, a historically underserved community.
$350 billion directed toward state, local and tribal governments.
Increased funding to help with food insecurity through the Supplemental Nutrition Assistance Program and the Special Supplemental Nutrition Program for Women, Infants, and Children.
$27 billion for emergency rent assistance, $10 billion for homeowners to cover mortgage payments and an additional $5 billion to help those struggling with utility bills. For details on where to apply for rental assistance in your area, refer to this National Low Income Housing Coalition database. There is an additional $5 billion allocated to homelessness assistance and supportive services.
$130 billion to help K-12 schools open for in-person instruction, and $40 billion for colleges.
Pension plans for workers who change employers frequently — such as those in construction — were bailed out with roughly $86 billion in direct aid, preserving retirement for about a million retired Americans.
While opposition from Republicans and moderate Democrats killed attempts to include an increase in the minimum wage, the bill was still hailed by progressives as a major achievement.
“The American Rescue Plan is the most significant piece of legislation to benefit working people in the modern history of this country,” said Sen. Bernie Sanders, I-Vt., who helped shepherd the bill through Congress in his role as chairman of the Senate Budget Committee.
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