On January 14, President-elect Joe Biden unveiled a $1.9 trillion COVID-19 relief plan, the “American Rescue Plan,” which aims to provide additional relief to individuals and businesses, stimulate the economy and provide funding for critical costs related to COVID-19 testing and vaccinations.
Biden’s proposal is divided into three primary buckets: $400 billion for COVID-related initiatives including vaccines and testing; $1 trillion in direct relief to individuals and families; and $400 billion in state and local aid and businesses. Specifically, the plan includes several key provisions for the multifamily industry, including enhanced and extended unemployment benefits, expanded stimulus checks and further rental assistance funding. However, the proposal also seeks to extend a federal eviction moratorium, potentially through September 30, 2021. This period would extend far beyond how long allotted supplemental rental assistance is likely to last.
The “American Rescue Plan” is the first of two initial COVID-19 relief bills Biden will introduce and is intended to address immediate need. The second proposal, which he plans to release in February, will focus on infrastructure and other measures aimed at broader relief and rebuilding.
State of Play
Although Democrats will control the 117th Congress, it is only by a razor-slim margin in both chambers. For this bill to pass through the House, virtually all Democrats would need to vote in favor. Otherwise, some Republican support would be necessary to pass via simple majority. In the Senate, Republican support is critical to passage. Even if all Senate Democrats sign on, ten Republicans would still need to support for it to pass through traditional means. This means that Republicans will have a seat at the table to shape the package, and it is likely to come down in price and reflect compromise policies that both parties support. That said, should Republican support be impossible to secure, incoming Majority Leader Chuck Schumer (D-NY) could choose to push the bill via the budget reconciliation process, which only requires a simple majority. However, if Senate Democrats opt to go this route, the bill would need to be stripped down to only include revenue and spending measures. Resorting to reconciliation could also slow down enactment, as Democrats would need to pass a budget resolution to authorize the reconciliation process.
- Stimulus Checks
Biden’s proposal includes a $1,400 stimulus check for each qualified American earning up to $75,000 per year and married couples earning up to $150,000 per year. It also expands the list of qualified Americans to include adult child dependents and families where one parent is an immigrant.
- Emergency Paid Leave
While the COVID-19 relief bill passed in December extended the Families First Coronavirus Response Act tax credits, it did not renew the legislation’s requirement for employers to provide sick leave. The Biden proposal calls for putting the requirement back in place. It also looks to eliminate the exemptions for employers with more than 500 and less than 50 employers. It calls for a paid leave benefit of $1,400 per week for eligible employees. The plan provides for a reimbursement for state and local governments and employers for the cost of this leave.
- Unemployment Insurance
The previous stimulus packages set forth an additional $300 in weekly federal unemployment benefits through March 14 for eligible unemployed Americans. Biden’s plan increases that amount to $400 through September. It also continues extended benefits to unemployed individuals who have exhausted current benefits or would not normally qualify (like gig workers and contractors).
- Rental Assistance
In addition to the $25 billion provided by the December relief package, Biden is proposing an additional $25 billion in rental assistance. The proposal also calls for $5 billion to cover home energy and water costs and arrears through programs like the Low-Income Home Energy Assistance Program.
- Eviction Moratorium
The proposal extends the eviction and foreclosure moratoriums through September 30, 2021.
- Homelessness Prevention
Biden’s proposal would deliver $5 billion in emergency assistance to help secure housing for people experiencing or at risk of homelessness.
- Individual Tax Credits
The proposal would expand the child taxcredit to $3,000 per child up to age 17 and $3,600 for children under age 6. It would also expand the Earned Income Tax Credit from $530 to $1,500.
- Small Business Relief
Biden’s proposal would set aside $15 billion in “flexible, equitably distributed grants” for the most “hard-hit” small businesses. It also would leverage the $35 billion investment in state, local, tribal, and non-profit small business financing programs, to generate up to $175 billion in low-interest loans and venture capital to help entrepreneurs.
- Minimum Wage
Biden is proposing a $15 federal minimum wage. In addition, he is calling for an end to the tipped minimum wage and sub-wage for people with disabilities.
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