H.R.1319 – American Rescue Plan Act of 2021
Background: The American Rescue Plan Act of 2021 is being considered under the budget reconciliation process. The fiscal year 2021 budget resolution, which passed the House by a vote of 219-209 and passed the Senate on a party-line vote of 51-50, with the vice president breaking a tie, included reconciliation instructions for 12 House committees and 11 Senate committees. The House committees reported legislation in February that was combined into the American Rescue Plan Act of 2021. H.R.1319 passed the House on February 27 by a vote of 219-212. The reconciliation package is expected to bypass Senate committees and go straight to the Senate floor.
Floor Situation: The Senate is expected to consider the legislation in early March.
Executive Summary: The bill provides $1.9 trillion in emergency pandemic relief and other spending, and it includes a number of policies unrelated to COVID-19 or economic recovery.
OVERVIEW OF THE ISSUE
Last year Congress passed several laws with bipartisan support to provide a total of $4 trillion in emergency pandemic relief. The most recent of these passed in late December. Democrats are now pushing for an additional $1.9 trillion in emergency pandemic relief as well as a number of policies unrelated to COVID-19 response or economic recovery.
House and Senate Democrats are using the reconciliation process to consider this legislation, which will allow them to pass the legislation without bipartisan cooperation. Reconciliation bills are privileged; the motion to proceed is not debatable and requires only a simple majority. The Budget Act provides for 20 hours of debate on reconciliation bills, equally divided, followed by a vote-a-rama at the end of debate. A simple majority is required for final passage of the reconciliation bill.
CONSIDERATIONS ON THE BILL
Since March, Congress has taken unprecedented steps to help Americans respond to the coronavirus pandemic. Each of the five COVID-19 relief laws passed the Senate with overwhelming bipartisan votes. Just two months ago Congress passed $900 billion in COVID-19 relief. A lot of that money hasn’t been obligated yet, and while some of the funding provided over the last year has been obligated, some of it hasn’t actually been spent yet.
Thanks in part to the efforts of Congress, the economy is bouncing back, with GDP projected to return to its pre-pandemic level by the middle of this year. The $1.9 trillion legislation would spend hundreds of billions of dollars on untargeted ‘relief’ and advance policies that have nothing to do with COVID recovery. According to the Congressional Budget Office, much of the money labeled as ‘emergency relief’ would not be spent for several years, including funding to reopen schools.
CBO estimates that the bill’s wage mandate on businesses would will eliminate 1.4 million American jobs, disproportionately affecting young, less educated people.
NOTE: Title II Subtitle B provisions on the minimum wage are in the House-passed bill, but the Senate parliamentarian has determined that they do not meet the requirements of the Byrd Rule as written.
NOTABLE BILL PROVISIONS
Title I – Committee on Agriculture
Subtitle A – Agriculture
$3.6 billion for the secretary of agriculture to purchase commodities to be disbursed to people in need and facilitate grants and loans to small and midsized food processors and distributers, as well as grants and loans to bolster supply chains.
Provides a payment to each socially disadvantaged farmer or rancher with an outstanding USDA farm loan in an amount equal to 120% of his or her outstanding indebtedness, which CBO scores at a cost of $4 billion.
Appropriates an additional $1 billion in further support for socially disadvantaged farmers and ranchers.
Appropriates $500 million to the secretary to establish an emergency community facilities pilot program to provide grants for COVID-related needs.
Subtitle B – Nutrition
Extends the 15% increase in Supplemental Nutrition Assistance Program benefits provided under the Consolidated Appropriations Act, 2021 through fiscal year 2021, which CBO scores at a cost of $3.54 billion.
$1 billion for nutrition grants to Puerto Rico, American Samoa, and the Northern Mariana Islands, and $1.2 billion for administration of the SNAP program by states.
Title II – Committee on Education and Labor
Subtitle A – Education Matters
$128.6 billion more for K-12 schools through the CARES Act’s elementary and secondary school emergency relief fund. To receive the funds, a state must maintain K-12 and higher education funding in fiscal years 2022 and 2023 at least at the proportional levels of its K-12 and higher education funding compared to its overall spending, averaged for fiscal years 2017 to 2019. The bill provides a waiver process for this “maintenance of effort” requirement. The bill sets “maintenance of equity” requirements that states must maintain K-12 funding for high-poverty local educational agencies and those with the highest shares of economically disadvantaged students. It also holds local educational agencies to funding requirements for high-poverty schools.
$39.6 billion for institutions of higher education through the higher education emergency relief fund.
$850 million for the outlying areas.
$850 million for the Bureau of Indian Education.
Funding for other education programs, such as $91.1 million for student aid administration at the Department of Education and $35 million for Howard University.
Changes the Higher Education Act’s “90-10 rule,” which requires proprietary institutions of higher education to get at least 10% of their revenue from sources beyond Title IV federal education aid. The bill broadens the rule to require that these schools receive at least 10% of their revenue from sources beyond all “federal education assistance funds.” The term “federal education assistance funds” is not defined in the U.S. Code, but House Democrats’ summary document says the provision is intended to include GI Bill education benefits, which are not under Title IV.
Subtitle B – Labor Matters
Increases the federal minimum wage from $7.25 per hour to $15 per hour by 2025. After 2025, the bill indexes the minimum wage increase to any annual percentage increase in the median hourly wage of all workers.
Increases the $2.13 per hour minimum cash wage for tipped workers and eliminates it once it reaches the federal minimum wage.
Increases the $4.25 per hour youth minimum wage, which employers may pay workers who are less than 20 years old for their first 90 days of work, and ends it once it reaches the federal minimum wage.
Prevents the Labor Department from issuing new certificates under the Fair Labor Standards Act that allow employers to pay a “special minimum wage” to workers “whose earning or productive capacity is impaired by age, physical or mental deficiency, or injury.” The bill increases this minimum wage to equal the federal minimum wage in 2025 and then nullifies current certificates.
$150 million for worker protection activities at the Department of Labor. At least half of this total is for the Occupational Safety and Health Administration. The bill reserves $5 million of the OSHA funds for COVID-19 related enforcement in high-risk workplaces such as meat and poultry processing facilities.
Establishes a presumption of eligibility for federally funded workers’ compensation benefits, including disability compensation, medical services, and survivor benefits, for federal employees who were diagnosed with COVID-19 between January 27, 2020, and January 27, 2023. Employees who are fully teleworking are excluded. Claims may not be paid after September 2030. The bill similarly provides a presumption of eligibility for maritime workers’ benefits under the Longshore and Harbor Workers’ Compensation Act for those who contracted COVID-19.
Subtitle C – Human Services and Community Supports
Provides $188 million in funding for the Elder Justice Act in fiscal years 2021 and 2022.
Provides $1.4 billion to fund programs authorized through the Older Americans Act.
$15 billion in Child Care and Development Block Grant funding.
$24 billion for Child Care Stabilization grants.
$1 billion for Head Start agencies.
Provides $425 million to HHS to be used as the secretary determines for cost increases resulting from the pandemic to carry out programs under the Administration for Children and Families.
Subtitle D – Child Nutrition
CBO estimated the bill’s changes to child nutrition programs will cause $6.6 billion in higher spending over the 10-year budget window. This includes an estimated $5.6 billion from expansions in the Pandemic-EBT program as well as $880 million for WIC to support a temporary increase in cash voucher benefits and activities to increase program participation.
Subtitle E – COBRA Continuation Coverage
Provides people who are unemployed and no longer have employer-sponsored health insurance to receive premium assistance to cover 85% of their COBRA continuation insurance coverage beginning one month after the new law is enacted through September 30, 2021. COBRA is the federal law that allows people to continue participating in their employer-sponsored health plans for up to 18 months after leaving employment.
Title III – Committee on Energy and Commerce
Subtitle A – Public Health
$7.5 billion for the Centers for Disease Control and Prevention for vaccine distribution.
$1 billion for CDC vaccine confidence activities, including vaccine education and increasing vaccination rates.
$5.2 billion for vaccine and treatment supply chain activities, including research, development, manufacturing, and purchasing of vaccines, treatments, and ancillary supplies.
$46 billion for coronavirus testing, contact tracing, surveillance and mitigation of COVID-19.
$1.8 billion is provided to CDC for genome sequencing and surveillance to identify and characterize viruses.
$7.7 billion to HHS for a new public health workforce, including contact tracers and community health workers.
$6.1 billion for tribal health programs.
$1.8 billion for community mental health block grant programs.
$1.8 billion for block grants for the Substance Abuse Prevention and Treatment.
Subtitle B – Medicaid
Requires Medicaid coverage for coronavirus vaccines and treatment with no cost sharing for beneficiaries. Vaccines are matched at 100% federal Medicaid matching rate for one year after the public health emergency.
Incentivizes Medicaid expansion by increasing states’ base FMAP by five points for two years for states that expand their Medicaid programs. The FMAP increase would apply to states that expand their Medicaid program after this legislation is enacted.
Subtitle C – Children’s Health Insurance Program
Requires CHIP coverage for coronavirus vaccines and treatment with no cost sharing to the beneficiary. Vaccines are matched at 100% FMAP for one year after the public health emergency.
Subtitle D – Other Provisions
Establishes a $7.6 billion Emergency Connectivity Fund at the Federal Communications Commission to provide funding for eligible schools and libraries to offer connected devices, internet service, hotspots, etc. to students and teachers to connect to the internet at home.
Title IV – Committee on Financial Services
Subtitle A – Defense Production Act of 1950
Provides $10 billion for Defense Production Act activities including purchase or production of COVID-19 related medical supplies and equipment under DPA Titles I, III, and VII authorities.
Subtitle B – Housing Provisions
Provides $20.3 billion to the Treasury, available through September 2027, for emergency assistance grants for rent, utilities, and other housing expenses by eligible households, including those that have COVID-related financial hardships or have someone who qualifies for unemployment. The bill reserves $1.2 billion of the total for high-need grantees. It allows grantees to use, subject to certain restrictions, any funds unobligated after September 2022 for any affordable housing purposes, to be defined by Treasury. This is in addition to the $25 billion Congress provided for rental assistance in December in the Consolidated Appropriations Act, 2021.
$5 billion to the Department of Housing and Urban Development, available through September 2030, to provide emergency rental assistance vouchers to people who are homeless, at risk of homelessness, or fleeing domestic violence or human trafficking.
$100 million, available through September 2022, to support unassisted households living in USDA-subsidized properties.
$750 million, available through September 2025, for housing assistance and support services through Indian Community Development Block Grants, Native American Housing Block Grants, and Native Hawaiian Housing Block Grant programs.
$100 million, available through September 2025, for the Neighborhood Reinvestment Corporation to make grants to organizations it approves for activities including housing counseling, operational funding of grantees, and technology upgrades.
$5 billion, available through September 2025, to state and local government grantees for homelessness assistance, including financing support, housing counseling, and acquiring non-congregate shelters such as hotels.
$10 billion to the Treasury, available through September 2025, for a new homeowner assistance fund, through which states and other grantees could use the funds to assist people with paying for things such as mortgages, utilities, and homeowner’s insurance.
$20 million to HUD to fund legal aid, fair housing, and other eligible nonprofit organizations promoting fair housing initiatives program activities.
Subtitle C – Small Business
Provides $10 billion to the Treasury to restart the Obama-era State Small Business Credit Initiative, which provides funding to states to use for state programs that lend to or invest in small businesses.
Subtitle D – Airlines
$15 billion to extend payroll support provisions for aviation sector employees, including $14 billion for passenger airlines and $1 billion for contractors.
Title V – Committee on Oversight and Reform
Subtitle A – Coronavirus State and Local Fiscal Recovery Funds
Provides $350 billion for states, localities, tribes, and territories.
$195.3 billion for states and the District of Columbia.
$25.5 billion divided equally among the states and D.C.
$169 billion divided based on state’s and D.C.’s share of total unemployed people in the country.
Treats D.C. as if it were a state under the CARES Act.
$130.2 billion for cities and counties.
$65.1 billion for counties, divided based on population.
$65.1 billion for cities, divided based on a modified CDBG formula.
$45.6 billion for cities with populations over 50,000.
$19.5 billion for cities with populations under 50,000.
$4.5 billion for territories – half equally divided and half based on population.
$20 billion for federally recognized tribes.
$1 billion equally divided
$19 billion divided by the secretary of the treasury
Title VI – Committee on Small Business
Provides $7.3 billion for the Paycheck Protection Program.
Expands program eligibility to a number of non-profits and waives affiliation rules for larger nonprofits.
Provides $15 billion for the Targeted Economic Injury Disaster Loan program for entities with 50% or more revenue disruption and with 10 employees or less.
Establishes a program to assist restaurants and other food and drinking establishments and provides $25 billion for it.
Provides $1.3 billion for the SBA Shuttered Venue Operators Grant Program.
$100 million for a new community navigators program.
Title VII – Committee on Transportation and Infrastructure
$30.5 billion for the Federal Transit Administration grants.
$8 billion for the Federal Aviation Administration Airport Improvement Program, including $800 million to aid airport concessionaires.
$1.5 billion for Amtrak.
$3 billion to provide relief for aerospace manufacturing businesses.
$50 billion for the Disaster Relief Fund under the Federal Emergency Management Agency.
$9 million for FAA employee leave fund.
Title VIII – Committee on Veterans’ Affairs
$13.5 billion for VA medical services.
$100 million for supply chain modernization efforts.
$500 million for VA for State Veterans Homes construction funds.
$250 million in emergency payments for State Veterans Homes operations.
$400 million for the VA rapid retraining program.
Waives copayment requirements until September 30, 2021; CBO scores at $2 billion.
Title IX – Committee on Ways and Means
Subtitle A – Crisis Support for Unemployed Workers
Extends the “pandemic unemployment assistance” program – for independent contractors, the self-employed, and other workers who normally do not qualify for regular state benefits – through August 29 and increases the total number of weeks available from 50 to 74 weeks.
Extends the “federal pandemic unemployment compensation” program through August 29 and increases this extra, temporary federal benefit from $300 to $400 per week, from mid-March through August 29.
Extends the “mixed-earner supplemental benefit” – for people with at least $5,000 of self-employment income who do not qualify for PUA because they also have wage income that makes them qualify for some amount of regular state benefits – through August 29.
Extends the “pandemic emergency unemployment compensation” program through August 29 and increases the number of weeks under the program from 24 weeks to 48 weeks. This is for people who have used up regular state benefits.
Subtitle C – Emergency Assistance to Children and Families
$1 billion for pandemic emergency assistance, to provide nonrecurring short-term benefits to low-income families.
Subtitle E – Support to Skilled Nursing Facilities in Response to COVID-19
Provides $200 million for infection control support for skilled nursing facilities.
Provides $250 million for strike teams to assist with care and infection control at skilled nursing facilities with diagnosed or suspected coronavirus cases.
Subtitle F – Health Benefits for Workers
Provides for people who are unemployed and no longer have employer-sponsored health insurance to receive premium assistance to cover 85% of their COBRA continuation insurance coverage beginning one month after the new law is enacted through September 30.
Subtitle G – Promoting Economic Security
Tax code provisions for individuals, including additional “recovery rebates” and changes to the child tax credit, Earned Income Tax Credit, child and dependent care tax credit, and ACA marketplace subsidies. Includes COVID-related tax provisions for employers and self-employed people, including credits for paid sick and family leave and the employee retention credit.
2021 Recovery Rebates to Individuals
Provides a $1,400 refundable tax credit to individuals with up to $75,000 in adjusted gross income (or AGI of $112,500 for heads of household and $150,000 for married couples filing jointly).
The refundable tax credit will be paid out in advance like the Economic Impact Payments previously provided in the CARES Act and the Consolidated Appropriations Act, 2021.
The credit will be phased out entirely for those with incomes above $100,000 (or $150,000 for heads of household and $200,000 for married couples filing jointly). The credit is reduced between $75,000 and $100,000 (or $112,500 and $150,000 for heads of household and $150,000 and $200,000 for married couples filing jointly).
Provides $1,400 for both children and non-child dependents.
Child Tax Credit
Increases the CTC amount to $3,000 per child for 2021, up from $2,000 under current law. For children under the age of six, the credit is increased to $3,600. The provision also broadens the definition of “qualifying child” to include children under 18 years old instead of 17.
Phases out the additional credit amount − $1,000 per child six and over; $1600 per child under six − for joint filers with a modified adjusted gross income above $150,000 ($112,500 for head of household filers and $75,000 for other filers).
Makes the CTC fully refundable in 2021. The CTC is currently only refundable up to $1,400 per qualifying child. With a refundable tax credit, taxpayers can generate a refund in excess of their income tax liability.
Creates a new program at the IRS to make periodic advance payments of the CTC based on 2019 or 2020 tax return information, from July 2021 through December 2021. These payments would comprise half of the child tax credit for which the taxpayer is otherwise entitled for 2021, with the remaining half claimed on the 2021 tax return.
Directs the IRS to establish an online portal to allow taxpayers to opt out of receiving advanced payments and provide information regarding changes in income, marital status, and number of qualifying children for purposes of CTC eligibility.
JCT estimates that these changes would increase outlays by $88 billion and reduce revenues by $21 billion over the 2021-2030 period.
Earned Income Tax Credit
For 2021, the bill expands eligibility requirements for the EITC for taxpayers without dependents, reducing the minimum age from 25 years old to 19 years old and increasing the upper age limit to include taxpayers over 64 years old. Special age provisions for students, qualified former foster youth, and qualified homeless youth are applicable.
For 2021, the bill increases the maximum credit amount for taxpayers without dependents.
The bill also makes several permanent changes to the EITC, including increasing the amount of investment income that would disqualify a taxpayer from receiving the credit.
JCT estimates these changes would reduce revenues by $4 billion and increase outlays by $21 billion over the 2021-2030 period.
Premium Tax Credit
Expands ACA subsidies for 2021 and 2022 to higher-income earners who currently do not qualify for ACA coverage. The provision expands the availability of premium tax credits to people making above 400% of the federal poverty level. All enrollees, regardless of income, would pay no more than 8.5% of their income in premiums. The poverty level for a family of four in 2020 was $26,200. Currently, premium tax credits are available for people making between 100% and 400% of the poverty line or roughly $12,760 and $51,040 for an individual earner. These subsidies vary in generosity based on the eligibility income level. CBO estimates this provision would increase federal deficits by $34.2 billion over the 2021-2030 period.
Waives the requirement for taxpayers to pay back excess advance premium tax credits to the IRS for the 2020 tax year. ACA marketplace enrollees receive APTCs, which are based on their annual income and lower the amount they pay monthly throughout the plan year.
Increases the amount of premium tax credits for people receiving unemployment insurance benefits during 2021. This provision would take UI payments out of the calculation of eligibility for PTCs if their income was 133% of the federal poverty level or less.
Subtitle H – Pensions
Provides taxpayer assistance for underfunded multiemployer pension plans. Under the bill, the Pension Benefit Guaranty Corporation would give grants, called “special financial assistance,” to eligible MEP plans out of a newly established PBGC fund, which will be funded with money from the Treasury. Plans would have to apply by December 31, 2025, and the grants will cover projected benefits through 2051. Plans must meet one of several criteria, which include already having been approved by Treasury to reduce participant benefits or being in critical and declining status in any plan year from 2020 through 2022. The bill also increases MEP premiums to $52 per participant in 2031 and then indexes the rate to inflation. Under current law, CBO projects premium rates would increase from $31 in 2021 to $44 in 2031. CBO projects an average of 185 MEP plans will receive $86 billion in federally funded grants.
The bill makes changes that reduce employer funding requirements for single-employer pension plans. It includes a provision for community newspapers that allows them to contribute less to their pension plans and fund their plan shortfalls over a longer period of time.
Subtitle I – Child Care for Workers
Increases funding for the child care entitlement to states program to $3.6 billion per year.
Title X – International Affairs
$8.7 billion to prepare, prevent, and respond to coronavirus.
$3.8 billion for HIV/AIDS programs to control coronavirus, with $3.5 billion of this going to the Global Fund to Fight AIDS, Tuberculosis, and Malaria.
$3 billion to the U.S. Agency for International Development to address COVID-19 internationally.
$580 million to support the United Nations Global Humanitarian Response Plan for COVID-19.
Title XI – Committee on Natural Resources
$900 million for Indian affairs, including $772.5 million for tribal government services and assistance, $100 million to support tribal housing, and $20 million to facilitate potable water.
U.S. Fish and Wildlife Service
$105 million for the U.S. Fish and Wildlife Service: $20 million to address wildlife trafficking; $30 million for efforts pertaining to care of species including in facilities that lost revenue during COVID; $45 million for research to avoid and mitigate future pandemics stemming from wildlife disease outbreaks; and $10 million to identify injurious species under the Lacey Act and support “emergency listings” of species.
Title XII – Committee on Science, Space, and Technology
National Institute of Standards and Technology
$150 million for the National Institute of Standards and Technology to support COVID-related research at existing Manufacturing USA institutes.
National Science Foundation
$600 million for the National Science Foundation to fund new and existing research grants aimed at supporting COVID-related impacts and response efforts.
The Biden Administration issued a Statement of Administration Policy supporting the legislation.
The Congressional Budget Office estimates the bill will increase the deficit by $1.92 trillion over the next decade: 2021-2030.