President-elect Joe Biden unveiled a $1.9 trillion coronavirus relief package that features numerous supports that will help jobless Americans and low- and middle-income families steady their financial fortunes.
Dubbed the American Rescue Plan, the proposal would cut child poverty in half based on an analysis from Columbia researchers, according to the Biden team. The plan also comes after nearly 1 million workers filed for unemployment benefits in the latest week and as the pandemic rages on across the country, disrupting local economies and families.
“While Congress’s bipartisan action in December was a step in the right direction, it was only a down payment. It fell far short of the resources needed to tackle the immediate crisis,” the fact sheet for Biden’s plan said. “We are in a race against time, and absent additional government assistance, the economic and public health crises could worsen in the months ahead.”
Here’s what’s in Biden’s plan and how it could help your personal finances.
Under his plan, Biden calls for increasing the current stimulus checks to $2,000 from $600 and expanding eligibility to adult dependents who were left out of previous rounds of relief and all mixed-status families. That means those Americans who already received their $600 payments from the stimulus bill passed in December, would receive an additional $1,400 per person.
The plan provides 14 weeks of emergency paid sick and medical leave — extended now to federal workers — until the end of September. This will allow workers to take off to care for children or loved ones when schools or care centers are closed. Workers can also take leave if they need to care for people with COVID-19 symptoms, or who are quarantining due to exposure.
Workers would get up to $1,400 a week during the leave, fully replacing wages for those who make up to $73,000. Small businesses with less than 500 workers and state and local governments would be reimbursed for this leave.
His plan also calls for the federal minimum wage to be increased to $15 from its current level of $7.25 and to put an an end to tipped minimum wages. Biden also plans to ask CEOs to provide back hazard pay to essential workers.
His plan would also help out-of-work Americans.
The extra weekly amount in unemployment benefits would be increased to $400 a week, up from the current $300 a week. Biden’s plan would also extend how long this supplement would be in place — currently the additional benefit lapses on March 14.
Biden would also extend the program that provides jobless benefits to workers who typically don’t qualify for regular benefits. The president-elect proposes to extend these programs through September 2021
For those struggling with housing, the plan would put in place a federal moratorium on evictions and foreclosures until the end of September. He’s also requesting that applications for forbearance on federally-guaranteed mortgages will be accepted through September.
Under the plan, an additional $20 billion would be allocated to rental assistance and another $5 billion would go utility payment assistance. Another $5 billion would target those most at risk for homelessness, helping 200,000 individuals and families obtain stable housing, according to the plan details.
The 15% increase in Supplemental Nutrition Assistance Program (SNAP) benefits would be extended through September. An additional $3 billion would go to the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) to compensate for the increased need and to expand outreach. Another $1 billion would go to U.S. territories for food assistance.
Biden’s proposal would increase the child tax credit to $3,000 per child under 18 — or $3,600 for a child under 6 — for the year. Now the maximum credit is $2,000 per child and only applies to children under 17. The credit would also be fully refundable, meaning families get a refund for the credit — even if it's more than their tax liability.
The plan would also expand the age and income eligibility requirements for the Earned Income Tax Credit. Workers 65 and over would qualify, as well as those that make up to $21,000. Childless workers would also receive a larger average benefit, nearly three times more at $1,500 compared with $530 currently.
The proposal would also make the child care tax credit refundable and worth up to $4,000 for one child and $8,000 for multiple children — up from $3,000 and $6,000, respectively. Families that make up to $125,000 could take up to 50% of their child care costs as a credit. Now it’s only 25% to 30%, depending on income.
Biden’s plan includes subsidizing COBRA costs through September. The COBRA program allows workers who lose their job to continue the same coverage under their employer-based health insurance. COBRA premiums are higher because the employer no longer pays a portion. Under Biden’s plan, the federal government would cover 100% of the COBRA premium cost.
Additionally, Biden’s plan would expand and increase the value of the Premium Tax Credit, a refundable credit that helps pay for premiums for health insurance from the Health Insurance Marketplace. Biden wants to reduce or eliminate premiums and ensure those who are enrolled don’t pay more than 8.5% of their income for coverage.
His plan also requests $4 billion for the Substance Abuse and Mental Health Services Administration (SAMHSA) and the Health Resources and Services Administration (HRSA) to expand access to behavioral health services.
The plan also allocates $25 billion to create a fund to expand access to child care for emergency workers. Last, the proposal calls for an additional $1 billion to go to Temporary Assistance to Needy Families (TANF) recipients to fulfill their additional needs as a result of the pandemic crisis.
On the pandemic front, the plan also includes a national vaccination program, money to expand testing, a program to fund 100,000 in public health jobs, $400 billion to open schools safely, and a plan to enact the Defense Production Act, so the National Guard can help manufacture needed supplies.
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