Biden stimulus could make 2021 even stronger
Days before his inauguration, President-Elect Joe Biden outlined a $1.9 trillion stimulus proposal. The American Rescue Plan is a starting point for negotiations with Congress, but the plan would include $350 billion in state and local government aid, $170 billion for K-12 schools and higher education institutions, $50 billion for COVID-19 testing, and $20 billion toward a national vaccine program.
The aspects of the plan geared towards individuals are:
Enhanced stimulus checks: An additional $1,400 to households that qualified for the first $1,200 payment under the Cares Act and the second ($600) round, enacted in December. The proposed $1,400 would be available for those individuals with income (wages, Social Security and/or pension) under $75,000 ($150K MFJ).
Money for older dependents: The plan would expand eligibility for dependents. The first two extra payments for dependents were only available for kids under age 17, while the proposed money would go to all dependents, regardless of age.
Increased supplemental federal unemployment benefits: $400 per week (on top of state unemployment programs) through the end of September. The $300 per week supplement from the December plan ends March 11.
Extension of eviction and foreclosure moratoriums: Protections set to expire Jan. 30 would now be in place until Sept. 30.
Increase the federal minimum wage: $15 an hour from the current $7.25 an hour. While states can set their own minimum wages (29 states, plus D.C., Guam and the Virgin Islands, have minimum wage rates higher than the federal minimum wage), Congress last raised the federal minimum wage in 2009. Adjusted for inflation, the federal minimum wage peaked in 1968, according to Pew Research.
Expansion of paid sick and family leave: The Biden plan would expand the universe of workers who could claim sick and family leave due to COVID-19 through September 2021. The plan calls for a $1,400-per-week maximum, up to a full wage replacement of up to $73,000 annually.
Increase the Child and Dependent Care Tax Credit: For 2021, the Biden plan would make the credit available to more families, would increase the credit amount to $3,000 per child ($3,600 for each child under the age of 6), and would make it fully refundable (meaning even those who don’t owe taxes will get the money) to households that earn below $125,000. The credit would be partially available for those earning between $125,000 and $400,000 and then completely phase out.
Expansion of the Earned Income Tax Credit (EITC): For 2021, the Biden plan would allow more Americans to claim EITC by increasing the income limit from those making less than $16,000 to $21,000, by allowing those who are over age 65 to claim the credit, and would increase the tax credit for those who do not have children.
Increase the Supplemental Nutrition Assistance Program (SNAP): The $900 billion in stimulus that passed in December instituted a 15% increase in monthly SNAP benefits for the first half of 2021. The Biden plan would extend that through September.
Expand health care coverage: When the Affordable Care Act was rolled out under the Obama administration, a number of Americans who needed insurance made too much money to qualify for government subsidies. The Biden plan would expand the current income caps to 8.5% of an individual or family’s income on premium contributions and would increase the subsidy amount for lower-income Americans.
Another round of stimulus seems more important as cases of COVID-19 spike across the nation and slow down the recovery.
The Biden plan attempts to brighten the dim outlook for the economy in the coming months, or at least until a large portion of Americans are vaccinated.