The United States Congress has passed the American Rescue Plan Act, a $1.9 Trillion bill intended to help Americans still reeling from the impacts of the COVID-19 pandemic and related business closures.
The bill, which first cleared the House of Representatives on a near party line vote, faced significant changes in the Senate. Most notably, a provision to gradually raise the federal minimum wage from $7.25 to $15 an hour was eliminated after the Senate Parliamentarian, the upper chamber's rules expert, ruled that reconciliation could not be used to raise the minimum wage. Reconciliation is a process which allows the Senate to bypass the legislative filibuster on issues related to the federal budget, including raising revenue and federal spending. Without reconciliation, 60 votes are required to end debate, and with the Democratic party holding the slimmest possible majority with only 50 Senate seats, reaching this threshold is almost impossible.
Other changes to the American Rescue Plan Act include a lower phase out for direct stimulus payments, reducing the amount of people who qualify for a $1,400 stimulus check. Under the current version of the bill, individuals with an Adjusted Gross Income higher than $75,000 will not receive the full $1,400 stimulus, and those with an AGI higher than $80,000 will not receive any stimulus. The Senate also reduced the additional unemployment insurance from $400 in the House bill to $300 per week, but extended this supplemental unemployment income through September 6, instead of August 29 in the House bill. The first $10,200 of unemployment insurance received in 2020 is no longer taxable under the Senate's version of the bill.
The bill also includes $350 billion to help state, local and tribal governments, who have faced the dual crises of decreased tax revenue due to business closures and higher expenses related to public health efforts. $130 billion is earmarked to help public primary and secondary schools safely reopen and make up for 'learning loss' caused by school closures. Another $14 billion will be used to assist the distribution of the COVID-19 vaccines.
The American Rescue Plan Act represents President Joe Biden's first legislative victory just over a month into his term. President Biden is expected to sign the bill into law as quickly as possible.
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