On March 11, 2021, President Joe Biden signed into law a $1.9 trillion economic relief package—the American Rescue Plan Act of 2021. Below is a summary of how the majority of the money will be allocated.
The $1.9 trillion relief package includes a third round of stimulus payments with $1,400 per individual, including dependents. Eligibility for these payments end at individuals with income of $80,000 and or couples who earned $160,000. Individuals earning between $75,000 and $80,000, and couples earning between $150,000 and $160,000 will receive a phased out portion of the full payments.
Child tax credit
The Act expands the child tax credit from $2,000 to $3,600 for children under six and to $3,000 for other dependents. This credit will be paid out to parents in monthly installments starting in July 2021.
The legislation extends the weekly federal benefit of $300 a week through September 6th and increases eligibility from 24 weeks to 53 weeks. Additionally, those who have been laid off, furloughed, or had their hours reduced can continue group health benefits without having to pay COBRA premiums.
Aid to state and local governments
More than $360 billion has been designated for state, local, and territorial government aid. Many states have seen difficulties with lowering tax revenue and higher costs due to the pandemic. The aid is meant to keep states’ budgets intact without having to make deep cuts to public health, safety, and education programs.
$160 billion will go toward vaccine and testing programs, including the creation of a national vaccine distribution program that would give free shots to all U.S. residents.
The Act sets aside more than $20 billion in emergency rental assistance with another $10 billion to mortgage and homeownership assistance.
$130 billion will help K-12 schools reopen. The money would go to improving ventilation systems, reducing class sizes, buying protective equipment, and social distancing. $40 billion of that will go to colleges and other higher-education institutions.
Aid for multi-employer pension plans
The Act includes $86 billion for failing pension plans.