The House is expected to pass a $1.9 trillion pandemic relief package late Friday that includes $1,400 checks for most Americans and billions of dollars for schools, state and local governments and businesses.
Republicans are overwhelmingly against the bill, raising concerns that the spending is vastly more than necessary and designed to advance policy priorities that go beyond helping Americans get through the pandemic. Democrats and President Joe Biden counter that a robust aid package is necessary to prevent a long and painful recovery from the pandemic.
The Democrats’ goal is to have COVID-19 relief approved by mid-March, when extra unemployment assistance and other pandemic aid expires. The Senate, which Democrats control with a tie-breaking vote from the vice president, will consider the bill next.
A look at some highlights of the legislation:
The legislation provides a rebate that amounts to $1,400 for a single taxpayer, or $2,800 for a married couple that files jointly, plus $1,400 per dependent. Individuals earning up to $75,000 would get the full amount as would married couples with incomes up to $150,000.
The size of the check would shrink for those making slightly more with a hard cut-off at $100,000 for individuals and $200,000 for married couples.
Some Republicans want to cut the size of the rebate as well as the pool of Americans eligible for it, but Biden has insisted on $1,400 checks, saying “that’s what the American people were promised.” The new round of checks will cost the government an estimated $422 billion.
BIGGER TAX BREAK FOR HOUSEHOLDS WITH KIDS
Under current law, most taxpayers can reduce their federal income tax bill by up to $2,000 per child. The package moving through the House would increase the tax break to $3,000 for every child age 6 to 17 and $3,600 for every child under the age of 6.
The legislation also calls for the payments to be delivered monthly instead of in one lump sum. If the secretary of the Treasury determines that isn’t feasible, then the payments are to be made as frequently as possible.
Also, families would get the full credit regardless of how little they make in a year, even just a few hundred dollars, leading to criticism that the changes would serve as a disincentive to work. Add in the $1,400 per individual checks and other items in the proposal, and the legislation would reduce the number of children living in poverty by more than half, according to an analysis from the Center on Poverty and Social Policy at Columbia University.
AID TO STATES AND CITIES
The legislation would send $350 billion to state and local governments and tribal governments. While Republicans in Congress have largely objected to this initiative, Biden’s push has some GOP support among governors and mayors.
Many communities have taken hits to their tax base as millions of people have lost their jobs and as people stay home and avoid restaurants and stores to prevent getting COVID-19. Many areas have also seen expenses rise as they work to treat the sick and ramp up vaccinations.
But the impact varies from state to state and from town to town. Critics say the funding is not appropriately targeted and is far more than necessary with billions of dollars allocated last spring to states and communities still unspent.
AID TO SCHOOLS
The bill calls for $130 billion in additional help to schools for students in kindergarten through 12th grade. The money would be used to reduce class sizes and modify classrooms to enhance social distancing, install ventilation systems and purchase personal protective equipment. The money could also be used to increase the hiring of nurses, counselors and to provide summer school.
Spending for colleges and universities would be boosted by $40 billion, with the money used to defray an institution’s pandemic-related expenses and to provide emergency aid to students to cover expenses such as food and housing and computer equipment.
AID TO BUSINESSES
The bill provides another round of relief for airlines and eligible contractors, $15 billion, so long as they refrain from furloughing workers or cutting pay through September. It’s the third round of support for airlines.
A new program for restaurants and bars hurt by the pandemic would receive $25 billion. The grants provide up to $10 million per entity with a limit of $5 million per physical location. The grants can be used to cover payroll, rent, utilities and other operational expenses.
The bill also provides another $7.25 billion for the Paycheck Protection Program, a tiny fraction of what was allocated in previous legislation. The loans are designed to help borrowers meet their payroll and operating costs and can potentially be forgiven.
AID TO THE UNEMPLOYED
Expanded unemployment benefits from the federal government would be extended, with an increase from $300 a week to $400 a week. That’s on top of what beneficiaries are getting through their state unemployment insurance program.
The bill provides money for key elements of the Biden administration’s COVID-19 response, while also trying to advance longstanding Democratic priorities like increasing coverage under the Obama-era Affordable Care Act.
On “Obamacare,” it dangles a fiscal carrot in front of a dozen states, mainly in the South, that have not yet taken up the law’s Medicaid expansion to cover more low-income adults. Whether such a sweetener would be enough to start wearing down longstanding Republican opposition to Medicaid expansion is uncertain.
The bill provides $46 billion to expand federal, state and local testing for COVID-19 and to enhance contract tracing capabilities with new investments to expand laboratory capacity and set up mobile testing units. It also contains about $14 billion to speed up the distribution and administration of COVID-19 vaccines across the country.
RAISING THE MINIMUM WAGE
The bill would gradually raise the federal minimum wage to $15 per hour by June 2025 and then adjust it to increase at the same rate as median hourly wages. However, that provision is not expected to survive in the final bill. The Senate parliamentarian ruled that it cannot be included in the COVID-19 economic relief package under the process Democrats chose to undertake to get a bill passed with a simple majority.
Biden had predicted such a result. Still, the ruling was a stinging setback for most Democratic lawmakers who had said the higher minimum wage would increase the pay for millions of Americans. The nonpartisan Congressional Budget Office had projected the new federal minimum wage would lift some 900,000 people out of poverty once it was fully in place. But Republicans said the mandatory wage hikes would make it harder for small businesses to survive and they pointed to the CBO’s projection that about 1.4 million jobs would be lost as employers looked for ways to offset their higher personnel costs.