By Gabriel T. Rubin
Democrats in Congress are racing to meet a self-imposed
mid-March deadline for President Biden's coronavirus relief package
before enhanced federal jobless benefits expire. Here's an overview
of the $1.9 trillion legislation, from stimulus checks to child tax
credits, jobless benefits, vaccine distribution, healthcare
subsidies, restaurant aid and more -- after some final changes in
What is the overall size of the package?
The House and Senate passed a budget resolution earlier this
month that allows them to craft a $1.9 trillion relief package. The
size of the package has stayed roughly the same since it was
unveiled by Mr. Biden during the transition period, and after he
rebuffed a proposal by a group of 10 Republicans who argued for a
$618 billion bill.
How big are the stimulus checks?
The package includes a third round of economic impact payments
to individuals. The current House legislation contains $1,400
checks for individuals making less than $75,000 annually, and
phased-out amounts for people with higher incomes. Married couples
who file taxes jointly can receive two $1,400 checks if their
combined income is below $150,000. A compromise with moderate
Senate Democrats resulted in the benefit being phased out faster
above the income threshold. Payments would phase out at $80,000 for
individuals and $160,000 for married couples.
Children and adult dependents would be eligible for the full
$1,400. Those adult dependents, including disabled adults and
college students, weren't eligible for the first two rounds of
What about unemployment payments?
Enhanced unemployment benefits totaling $300 a week are set to
expire on March 14, creating a de facto deadline for Congress to
act. Senate Democrats struck a last-minute agreement Friday to set
federal unemployment benefits at $300 a week, down from the $400
passed by the House, but extend their duration by a month, through
September. In addition, the first $10,200 of the benefits for 2020
wouldn't be taxable.
What is included for vaccines and testing?
The package contains tens of billions of dollars to facilitate
the vaccine rollout. It allocates $8.75 billion to federal, state,
local, territorial and tribal public-health agencies for
distributing, administering and tracking vaccinations, with some
funds specially dedicated to making sure the vaccination process
reaches underserved communities.
Vaccine development would also get a boost, with around $20
billion going to federal biomedical research for vaccine and
therapeutic manufacturing and procurement, along with around $3
billion for a strategic national stockpile of vaccines. Another $25
billion would be spent on testing, contact tracing and reimbursing
hospitals for lost revenue related to the pandemic.
How does it expand tax credits for children?
The package makes a significant change to the social safety net
through the tax code that could have an impact on child poverty
rates and potentially form a pillar of Mr. Biden's economic legacy.
The plan would raise the $2,000 Child Tax Credit to $3,000, set the
credit at $3,600 for parents of children under age 6 and make
parents of 17-year-olds eligible. It would also make the credit
fully refundable, so low-income households would get the full
benefit, no matter how little they earn. For a household with a
4-year-old and 7-year-old that doesn't earn enough to pay income
taxes, the plan would boost their maximum child tax credit to
$6,600 from $2,800.
The proposal would also authorize periodic payments, so that the
credit becomes a near-universal child allowance like those in some
other countries instead of part of a lump-sum tax refund.
While the package would make the child tax-credit changes only
for one year, it is broadly expected that Democrats will seek to
make them permanent in the future.
Are there other provisions targeted at certain industries or
Yes. One provision would allow federal workers, including postal
workers, to take as many as 600 hours of emergency paid leave
related to Covid-19. Also, the restaurant industry will receive $25
billion in relief targeted at small and midsize restaurants and
chains. The money would be doled out in grants that don't need to
be repaid if the restaurants use them for operating expenses,
including payroll, rent and providing personal protective equipment
What happened to the minimum-wage increase?
A parliamentary ruling effectively barred Democrats from raising
the federal minimum wage as part of the relief plan. The Senate
parliamentarian said that raising the minimum wage wouldn't comply
with the body's rules for legislation passed through a process
called reconciliation, which allows a bill to be approved with just
51 votes but requires that it be closely tied to the budget.
An alternative effort by Democrats to find a way to spur
companies to boost the wage they pay workers through tax penalties
and incentives hit resistance among Democrats, though Mr. Biden and
progressives like Sen. Bernie Sanders (I., Vt.) vowed to revisit
What else did the Senate change from the House bill?
Senate reconciliation rules are much stricter than the House's,
which can pass legislation by simple majority. Along with the
minimum-wage increase, the Senate also eliminated funding for an
extension of the Bay Area Rapid Transit subway in Silicon Valley
and a bridge in upstate New York, due to a ruling by the
Democrats also shuffled tax provisions in the bill. They removed
a House proposal that would have frozen the growth in annual limits
on contributions to retirement accounts after 2030. They replaced
it with tighter limits on companies' deductions for executive
compensation -- but only starting in 2027.
Senate Democrats added a provision that would make much
student-loan forgiveness free from income taxes, creating an
exception from 2021 through 2025 to the normal rule that canceled
debt is income.
How much funding is included for schools?
The plan contains around $130 billion in funds for K-12 schools.
The money would go to school districts to pay for reducing class
sizes to accommodate social distancing, improving ventilation,
hiring more janitors and providing more personal protective
equipment. Republicans have criticized the package for not directly
tying funds to schools reopening and for spreading the aid over
How much state and local aid is there?
The bill would provide $350 billion to state and local
governments whose coffers have been hit by a loss of tax revenue
during the pandemic, causing many to plan cuts to services and warn
of tax increases to allow them to balance their budgets.
Republicans have slammed the aid as "blue state bailouts,"
rewarding Democratic states for poor financial decisions that
predated the pandemic and note that many states' tax revenues have
The Senate changes set aside $10 billion of the state and local
aid for infrastructure projects. For state and local aid, senators
are mandating that individual states receive at least as much as
they did from a previous aid package and allowing governments to
use the funds for economic recovery efforts. They are also placing
rules on how the funds can be used, barring states from using the
aid for pensions or to finance tax cuts.
What healthcare provisions are in the bill?
Along with virus-related provisions like vaccine and testing
funds, the bill contains the largest overhaul to the Affordable
Care Act in years. The bill expands eligibility for subsidies to
purchase insurance to people of all incomes and caps the maximum
premium at 8.5% of a person's income. It also takes steps to lower,
or even zero out, premiums for people making less than 150% of the
federal poverty line.
The bill also encourages states to expand Medicaid by having the
federal government pay for new recipients. Twelve states have
refused to broaden their Medicaid programs through the ACA, even
though the federal government pays 90% of the costs. It is unclear
whether these changes would lead states to accept the expansion
after years of opposition.
Employees who lose their jobs or lose benefits as a result of
working fewer hours qualify for 100% Cobra health-insurance
subsidies under the Senate plan, a boost from the 85% subsidy in
the House-passed bill.
Will Republicans support the proposal?
Not likely. Republicans see the bill as too large, saying it
sprawls beyond pandemic aid and instead is a wish list of liberal
priorities. In the House, no GOP lawmaker backed the bill. Only one
Republican senator, Lisa Murkowski of Alaska, has indicated she is
open to supporting the package, although she voted against it on a
procedural vote Thursday. While a small cadre of Republicans has
engaged with the White House on the substance of the relief
package, few if any are expected to vote for the final package --
and Democrats can pass it without their support.
Some, like GOP Sen. Shelley Moore Capito of West Virginia, have
pointed to the effect that the package will have on federal budget
deficits, and she and others have favored a more narrowly tailored
bill that would facilitate the vaccine rollout and provide
less-generous stimulus checks and unemployment benefits.
Republicans have used the budget-resolution amendment process to
inflict political damage on Democrats and expose their differences
on issues like providing aid to undocumented immigrants and raising
the minimum wage. But they have been unable to strike many blows
against support for the overall package, which enjoys strong
approval in polls and has so far kept congressional Democrats
united on its top-line priorities.
Write to Gabriel T. Rubin at firstname.lastname@example.org
(END) Dow Jones Newswires
March 05, 2021 12:53 ET (17:53 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.