2020 was a year full of surprises, and 2021 has started in a similar fashion. At the onset of the COVID-19 pandemic last February, Congress began working on what became known as the CARES act. In March, the CARES Act was signed into law by President Trump, giving relief to many impacted by the COVID-19 pandemic. The debate about the second round of stimulus rolled on during the summer but talks between the House and Senate stalled. Eventually, stimulus round II was passed in December 2020. This week, President-elect Joe Biden unveiled his proposal for a third round of stimulus. What are the details of his relief plan? In this post, we will cover some of the basic provisions of his proposal.
On Thursday, President-elect Joe Biden set forth the “American Rescue Plan”, a catchy name for the third round of Coronavirus related stimulus. According to Biden officials, this is the first of two major spending packages the president-elect will pursue in the first few months he is in office. While this round of stimulus comes with a $1.9 trillion price tag, it does offer more relief to individuals and small businesses. What are some of the key provisions of Biden’s proposal?
- Direct payments to individuals – in 2020, individuals meeting certain income requirements received a total of $1,800 from the federal government ($1,200 under the CARES Act and $600 from the most recent relief bill). Joe Biden is advocating an additional $1,400 to Americans meeting the same income requirements.
- Increasing Federal Unemployment Benefits – President-elect Biden is proposing an increase in per-week unemployment benefits to $400. His proposal would also extend program benefits through September 2021.
- Federal Eviction & Foreclosure Moratorium – This proposal would extend the federal eviction moratorium through September 2021. Currently, this program is set to end on January 31.
- State and Local Aid – President-elect Biden is proposing to earmark approximately $350 billion in aid for state and local governments. This was a hotly debated topic that was excluded from the second stimulus package.
- COVID Testing and Vaccine Distribution – Biden’s proposal earmarks $70 billion in funds for testing and vaccine distribution, $50 billion toward COVID-19 testing and $20 billion toward national vaccination programs.
- Child Tax Credit – Joe Biden’s proposal would make the child tax credit fully refundable for the year and increase this tax credit to $3,000 per child (plus an additional $600 for children under 6 years old). The child tax credit is currently $2,000 per child, up to $1,400 of which is refundable.
The Covid-19 pandemic has taken its toll not only on our nation’s health but our nation’s economy as well. While this is just a proposal for the third round of stimulus, many of the line items seem to have gained traction among members of both the House and Senate. We will continue to follow the legislation as it makes its way through congress. Should you have any questions on how this proposal may impact your finances, please reach out to us today.