The first major legislation of Joe Biden’s presidency could be a $1.9 trillion coronavirus relief package that Democrats are fast-tracking through Congress to get relief to Americans quickly. Called the American Rescue Plan, the bill could impact individual Americans far beyond relief checks.
Here’s how the legislation could affect you:
1. Another Round of Relief Checks
Sending money directly to individuals has been discussed in Congress throughout the pandemic, but in the past year only two rounds of stimulus checks have made it to Americans. Most recently, some Americans received $600 checks starting in late December.
The American Rescue Plan calls for a third stimulus payment at the set rate of $1,400. Not everyone will receive a check—the relief funding is aimed at low earners and could also include adult dependents and families with mixed-status citizenship. While the rules of who qualifies as a mixed-status family aren’t entirely clear, we do know that the bill could extend eligibility to millions of families where one person isn’t a U.S. citizen. Many of these families didn’t qualify for the first two stimulus checks.
For now, it’s unknown whether eligibility will be based on your 2019 tax return or if your 2020 tax filing also will be taken into account. Generally, stimulus check eligibility considers your age, marital status, tax status, and adjusted gross income. Current proposals end eligibility for single taxpayers earning $100,000 or more, a head of household making $150,000 or more and married couples filing jointly making $200,000 or more. This round of stimulus checks could set the government back more than $420 billion.
Democrats hope to have the bill on President Biden’s desk in mid-March, when unemployment benefits and other pandemic aid ends. Checks could be sent out within weeks.
2. Increased Tax Breaks for Families with Children
Now, taxpayers can deduct as much as $2,000 per dependent child from their federal income tax bill. The American Rescue Plan could raise that deduction to $3,000 for every dependent child age 6 to 17 and to $3,600 for every dependent child who is younger than 6.
All families would be eligible for the full credit, regardless of how low their annual income is. Columbia University’s Center on Poverty and Social Policy estimates that coupled with the individual stimulus checks, the increased child tax deduction could decrease the number of children living in poverty by more than 50 percent.
3. Extended Unemployment Benefits
President Biden wants $400 weekly federal payments for the unemployed that will continue through September. The bill originally called for $300 payments that would end in March.
Biden’s proposal would be extended to people who have been part of the Pandemic Emergency Unemployment Compensation program and have used up their state unemployment benefits as well as to people who have participated in the Pandemic Unemployment Assistance program, which benefits freelancers, gig workers and the self-employed.
4. More Generous Food Stamp Benefits
The bill would retain the 15 percent increase in food stamps, which was set to expire in June, until September. To alleviate hunger, the legislation also would authorize $3 billion in nutrition assistance for women, children and infants; $1 billion in nutrition assistance to US territories; and work with restaurants to find jobs for unemployed restaurant workers and get food to Americans in need.
5. A Minimum Wage Hike
One of the more controversial aspects of the proposed bill is legislation that would raise the federal minimum wage to $15 per hour by the middle of 2025, and then it would increase accordingly with median hourly wages. While it’s unknown at this time whether the minimum wage increase will stay in the bill, the Congressional Budget Office has estimated that the increase would raise about 900,000 people out of poverty. While about 17 million people would get an increase in pay, as many as 1.4 million jobs could be lost as businesses try to offset costs.
6. Additional Business Assistance
Several business sectors that have been hit hard by the pandemic would receive aid in the American Rescue Plan. Airlines would get their third stimulus boost. This time, the bill would inject $15 billion into the industry as long as airlines didn’t cut pay or furlough workers through September.
The popular Paycheck Protection Program, which provides assistance to businesses for payroll and operating costs, would be replenished with $7.25 billion. Restaurants and bars that need help could receive grants of up to $10 million to pay rent, utilities, payroll, and other operating costs.
7. Help with Rent
The plan provides assistance for people who are struggling to pay rent or are facing eviction. About $5 billion is allocated to help renters pay their utility bills, and $25 billion (in addition to $25 billion allocated in December) would assist people with rent who make low or moderate incomes and are unemployed due to the pandemic. Federal eviction moratoriums, which were supposed to expire in late January, would be extended to the end of September. People who have federally backed mortgages would also have the same window to apply for forbearance.