Biden’s Relief Plan Includes $350 Billion In Critical Aid for State and Local Govts

President-elect Joe Biden yesterday unveiled the details of a $1.9 trillion COVID-19 rescue package that aims to speed up the vaccine rollout and keep the economy afloat amid the deepening COVID-19 pandemic.

The proposal — entitled the American Rescue Plan — includes direct payments of $1,400 stimulus checks to qualifying Americans (bringing the total relief to $2,000), $350 billion in direct aid to state and local governments, an increase in and extension of federal unemployment benefits from $300 to $400 per week through the end of September, and $50 billion for COVID-19 testing.

The relief package also includes a new $15 billion grant program — separate from the existing Paycheck Protection Program — for struggling small business owners and invests $35 billion in local financing programs that provide businesses with low-interest loans. Additionally, the plan allocates $20 billion to a national vaccine program, $170 billion for K-12 schools and higher education, and raises the federal minimum wage to $15 an hour.

As previously reported on Conduit Street, the president last month signed the Consolidated Appropriations Act, 2021 (H.R. 133), a $2.3 trillion spending bill that combines $900 billion in COVID-19 stimulus relief with a $1.4 trillion omnibus spending bill for the 2021 federal fiscal year. The package includes an 11-week extension of federal unemployment benefits, $600 direct payments to Americans based on income, additional aid for businesses, and funding for vaccine distribution, schools, broadband, transportation, and rental assistance.

While the agreement did not include direct funding for state and local governments, it did extend the Coronavirus Relief Fund (CRF) spending deadline to December 30, 2021.

The CRF was established under the CARES Act and provides $150 billion in federal aid for state, county, and municipal governments to address significant expenditures related to public health and safety needs. As established under the CARES Act, state and local CRF allocations must be spent by December 30, 2020.

President-elect Biden’s proposal includes many elements that were part of the original $3 trillion CARES Act in March 2020 and the scaled-back relief package passed in December:

  • $350 billion in aid for state and local governments
  • $170 billion in aid for K-12 schools and higher education
  • An extension of eviction and foreclosure moratoriums until the end of September, with $5 billion set aside to help tenants struggling to pay rent
  • Restoration of emergency paid sick leave through the end of September
  • $50 billion for COVID-19 testing
  • 15% increase in SNAP benefits through September
  • $20 billion toward a national vaccine program, in partnership with state and local governments
  • Increasing the Child Tax Credit to $3,000 per child ($3,600 for children under 6) and making it refundable for the year

House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer praised the plan and said they would move quickly to pass it once Biden takes office next week, but will likely face pushback from Republicans, who have opposed providing additional aid to states and local governments and pushed for broad pandemic-related liability protections for businesses.

Stay tuned to Conduit Street for more information.

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