American Rescue Plan Act of 2021
The American Rescue Plan Act of 2021, also called the COVID-19 Stimulus Package or American Rescue Plan, is a economic stimulus bill passed by the 117th United States Congress and signed into law by President Joe Biden on March 11, 2021, to speed up the country's recovery from the economic and health effects of the COVID-19 pandemic and recession. First proposed on January 14, 2021, the package builds upon many of the measures in the CARES Act from March 2020 and in the Consolidated Appropriations Act, 2021, from December.
On February 8, 2021, the Financial Services and Education and Labor committees released a draft of $1.9 trillion stimulus legislation. A portion of the relief package was approved by the House Ways and Means on February 11, setting it up for a vote in the House. The legislation was also approved by the Transportation and Infrastructure, Small Business, and House Veterans Affairs committees. On February 22, the House Budget Committee voted 19–16 to advance the bill to the House for a floor vote. The bill passed the House by a vote of 219–212 on February 27. All but two Democrats voted for the bill and all Republicans voted against the bill. A modified version passed the Senate on March 6 by a vote of 50–49. The final amended bill was passed by the House on March 10 by a vote of 220–211 with one Democrat voting against it alongside all Republicans. Biden signed the bill into law on March 11, 2021.
The American Rescue Plan Act provided for direct economic stimulus payments to individual taxpayers with incomes of $75,000 or less. The act also allocated $350 billion in assistance to state and local governments, $14 billion for COVID-19 vaccine distribution, and $130 billion to schools to help them safely re-open for in-person instruction. The act included $300 billion in unemployment benefits scheduled to extend through Labor Day 2021, as well as an expanded child tax credit. In addition, the act called for the distribution of $50 billion to small businesses and another $25 billion for relief for small and mid-sized restaurants. The act expanded eligibility for Affordable Care Act subsidies and gave states incentives to expand Medicaid. Through temporary expansions of the Earned Income Tax Credit and Child Tax Credit, the act has been estimated to have lifted more than 2 million children above the poverty line.
State and Local Fiscal Recovery Funds allocated according to a city's Tiered Classification must be spent by December 2026.
Background
Impact of the COVID-19 pandemic
By mid-2020, the United States was facing what the National Bureau of Economic Research determined was an economic recession, and by February 2021, 500,000 Americans had died of COVID-19. Over 29 million Americans had tested positive for COVID-19 by March. The United States also faced eviction, unemployment, and hunger crises since the start of the pandemic. Over 30 to 40 million Americans faced a risk of being evicted from their homes by January 2021. Then-president Donald Trump also faced criticism for not having a federal strategy to combat the pandemic, such as nationwide mask mandates on transportation, a mass testing strategy, health guidelines, providing medical-grade protective gear, and having an effective vaccine distribution strategy. On January 20, the day after Joe Biden was inaugurated, he warned that the death toll could exceed 500,000. According to Snopes, Biden inherited a vaccine distribution strategy from Trump, and disease expert Anthony Fauci said that his administration would incorporate some aspects of that Trump-era strategy in its ongoing work.Previous COVID-19 pandemic legislation
Prior to the passing of the American Rescue Plan, the CARES Act and Consolidated Appropriations Act, 2021 were signed into law by then-president Donald Trump in March and December 2020, respectively. Trump previously expressed support for direct payments of $2,000 along with Joe Biden and many Democrats. Even though Trump called for Congress to pass a bill increasing direct payments from $600 to $2,000, then-Senate Majority Leader Mitch McConnell blocked the effort. Additionally, the House voted on the HEROES Act in May 2020, which would operate as a $3 trillion relief package. Despite approval in the lower chambers, the Republican-led Senate would not consider such a bill, citing it to be "dead on arrival". Prior to the Georgia Senate runoffs, Biden said that the direct payments of $2,000 would be passed only if Democratic candidates Jon Ossoff and Raphael Warnock won; the promise of comprehensive COVID-19 relief legislation was reported as a factor in their eventual victories. On January 14, prior to being inaugurated as president, Biden announced the $1.9 trillion stimulus package.Legislative history
Negotiations
Ten Republican senators announced plans to unveil a roughly $600 billion COVID-19 relief package as a counterproposal to President Joe Biden's $1.9 trillion plan meant to force negotiations. The senators, including Susan Collins of Maine, Lisa Murkowski of Alaska, Mitt Romney of Utah and Rob Portman of Ohio, told Biden in a letter that they devised the plan "in the spirit of bipartisanship and unity" that the president has urged and said they planned to release a full proposal on February 1. On the same day, House speaker Nancy Pelosi and Senate majority leader Chuck Schumer introduced a budget resolution co-sponsored by Bernie Sanders as a step to pass the legislation without support from the Republican Party. The next day, Biden met with Schumer and other Democrats regarding the relief package.On February 7, Transportation Secretary Pete Buttigieg and Treasury Secretary Janet Yellen expressed support for the stimulus package. Yellen said that the funding would help millions of Americans and rejected concerns the colossal spending could cause inflation. Yellen also said that the stimulus package would restore full employment by 2022. On February 9, Biden met with JPMorgan Chase CEO Jamie Dimon and other CEOs to discuss the stimulus plan, with Yellen and Harris taking part in the meeting. On February 11, Pelosi said that she expects lawmakers to complete the legislation by the end of February, and for the legislation to be signed into law by March 14.
On February 16, Biden promoted his stimulus plan in a visit in Milwaukee, Wisconsin, during his first official trip as president. He promoted it via a CNN townhall meeting with voters. On February 18, Yellen called for major stimulus checks during an interview on CNBC, and said that stimulus checks would help the economy stage a full recovery.
Budget resolution passage
The United States Senate voted 50–49 to open debate on the resolution, which would allow Democrats to pass the relief package without support from Republicans through the process of reconciliation. The House voted 218–212 to approve the budget resolution. On February 4, a vote-a-rama session began, and the Senate introduced amendments to the relief package, including an amendment in a 90–10 vote that would provide direct relief to the restaurant industry. Vice President Kamala Harris cast a tie-breaking vote as President of the Senate for final Senate passage of the reconciliation bill, sending it to the House approval of the changes, and allowing drafting of the relief bill to begin in the committees. The House approved the resolution 219–209, with Jared Golden being the sole Democrat to join all Republicans in opposition to the bill due to a preference for a separate vaccine bill instead of the longer reconciliation process.One of the many non-binding budget amendments in the vote-a-rama session was meant to prohibit people who are in the country illegally from receiving pandemic relief checks. The non-binding amendments were not likely to have any effect on the final relief bill. The Republican Party used hundreds of non-binding votes in the hours-long vote-a-rama session to send messages. Under current law, undocumented immigrants were already prohibited from receiving pandemic relief checks. The amendment passed with eight Democrats joining all Republicans. The amendment received criticism from progressive immigration activist Greisa Martínez Rosas and Senator Mazie Hirono. The White House later stated that it would continue to support legislation that would give all otherwise eligible individuals with social security numbers stimulus checks.
Budget reconciliation passage
On February 8, a draft of the $1.9 trillion stimulus legislation was released by the Financial Services and Education and Labor committees. On February 11, the House Ways and Means Committee advanced a portion of the $1.9 trillion relief package. The legislation was also approved by several other House committees such as the Transportation and Infrastructure, Small Business, and House Veterans Affairs.On February 19, the full text of the bill was released. It included an increase in the federal minimum wage, direct checks for Americans making $75,000 or less a year, an extension of $400 federal unemployment benefits and more money for small businesses. On February 22, the House Budget Committee voted 19–16 to advance the bill. The following day, House majority leader Steny Hoyer announced that the House vote would occur that Friday. On February 26, the House passed the trillion dollar relief package by a vote of 219–212; two Democrats, Kurt Schrader and Jared Golden joined all Republicans in opposition.
Senate majority leader Chuck Schumer said that the Senate would pass the bill before March 14. On March 4, Schumer introduced the Senate version of the bill on the floor, which had a few changes to the House bill. The Senate voted 51–50 to advance the relief bill and allow debates to begin, with Harris casting the tie-breaking vote. Ron Johnson objected to Schumer's request to skip the reading of the bill, forcing the Senate clerks to read aloud the entire 628-page Senate bill, delaying the Senate amendment process for up to 15 hours. On March 5, the Senate reconvened and had three hours of debate, and thereafter moved to the "vote-a-rama" session, where senators would have the opportunity to introduce, debate, and vote on amendments.
There were multiple amendments brought onto the Senate floor. Bernie Sanders introduced the first amendment to raise the federal minimum wage to $15 per hour. All Republicans and eight Democrats voted against the amendment. After the vote, Sanders stated he was not surprised by the outcome and vowed that progressives would keep fighting on other fronts to raise the minimum wage. Senator Tom Carper introduced an amendment which would extend the unemployment benefits through the end of September but would cut the benefits from $400 to $300. The amendment also did not tax the first $10,200 of unemployment benefits. Senator Joe Manchin, a key vote in the Senate, disagreed with Carper's amendment, stalling the Senate amendment process for hours while his Democratic colleagues and the White House pressured him to support Carper's amendment. Manchin had initially signalled he would support a GOP-backed amendment by Portman to cut off the unemployment benefits at July. After hours of negotiations between top Senate Democrats and the White House, Manchin stated he would back a revised version of Carper's amendment which would cut off the unemployment benefits at September 6. The final vote was 50 to 49 on party lines, and the bill was sent back to the House for final passage.