Shots in Arms, Checks in Pockets: What You Need to Know After President Biden Signed the American Rescue Plan into Law
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President Joe Biden staked the opening weeks of his administration on passing a $1.9 trillion package—the American Rescue Plan (ARP)—intended to: (1) accelerate vaccine delivery and distribution; (2) facilitate the reopening of public K-12 schools; (3) provide large-scale aid to state and local governments; (4) inject more support into the Paycheck Protection Program and other initiatives to help small business and select industries weather the pandemic; and (5) provide another round of stimulus checks to tens of millions of Americans. Congress passed the ARP on schedule and President Biden signed it into law on Thursday, March 11.
To pass this package, President Biden and congressional Democrats used the budget reconciliation process, which fast-tracks a bill for passage with only 50 votes in the Senate instead of the normal 60 needed to overcome objections to proceed, which any Senator can raise. The downside of reconciliation is that it can only be used for legislation that raises revenue or directs new federal spending, and thus most policy directives cannot be included in a reconciliation measure.
In order to move with the greatest speed, President Biden and congressional Democrats largely drafted the legislation on their own, with the exception of one high-profile White House meeting between the President and the group of moderate Senators who brokered the December 2020 relief package compromise.
Both chambers of Congress passed the ARP without a single Republican voting for the ARP (in the House, a lone Democrat also voted against final passage of the bill). This is a sharp contrast to the three major COVID-19 relief packages that Congress passed in 2020: (1) the Families First Coronavirus Response Act (Passed the House 363-40; Passed the Senate 90-8); (2) the CARES Act (Passed the House by voice vote; Passed the Senate 96-0); and the Consolidated Appropriations Act of 2021 (Passed the House 327-85 and 359-53; Passed the Senate 92-6). The inability for Congress to pass the ARP with bipartisan support suggests this may be the last COVID-19 relief package until the second half of the year, when several key CARES provisions are set to expire on September 30.
Multiple reputable public polls out in the last few weeks have shown broad, bipartisan public support for the ARP hovering around 65-70% of voters. President Biden and congressional Democrats are betting voters care more about the substance of ARP than if it passed on a party-line vote. This week, President Biden, Vice President Harris, and other leading Administration officials are fanning out across the country to tout the benefits of the ARP and take a victory lap. In contrast, Congressional Republicans are betting that they will not be punished by voters in 2022 for voting against the ARP because they consider much of the bill unnecessary spending that has little to do with the emergency elements of the pandemic.
Below is our summary of the leading elements of the American Rescue Plan.
Title I - Agriculture Committee
Subtitle A - Agriculture
- Extends funding for USDA to purchase and distribute food and agricultural commodities, make grants and loans to small and midsized agricultural businesses to respond to and protect workers from COVID-19, and maintain and improve food and agricultural supply chain resilience.
- $500 million for targeted Community Facility grants for health and nutritional-related infrastructure and distribution critical to addressing COVID-19.
- $1.01 billion to the Secretary of Agriculture for assistance to socially disadvantaged farmers, ranchers, and forest landowners who have historically faced discrimination from USDA.
- $800 million for Food for Peace Title II grants to support US-led humanitarian food aid.
Subtitle B - Nutrition
- Extends the 15% increase in Supplemental Nutrition Assistance Program (SNAP) benefits from June 30, 2021 to September 30, 2021.
- Appropriates $1.150 billion for SNAP administrative expenses to help states administer the program with higher caseloads.
- $25 million for additional assistance for SNAP online purchases and technology improvements to help support SNAP mobile payment technology and update the electronic benefit transfer system.
- $1 billion for grants to the Commonwealth of Northern Mariana Islands, Puerto Rico, and American Samoa for nutrition assistance.
- $37 million for the Commodity Supplemental Food Program.
Title II - Education and Labor Committee
- Does not include the House's proposal to increase to the minimum wage from $7.25 per hour to $15 per hour by 2025.
- $15 billion for the Child Care and Development Block Grant (CCDBG), which will go to states in a similar manner as previous CCDBG funds, as well as allow states to waive eligibility requirements to provide child care assistance to health care sector employees, emergency responders, sanitation workers, and other essential workers during the pandemic.
- $24 billion for the Child Care Stabilization Fund, which states will award as subgrants to qualified child care providers to support stabilizing the child care sector during the pandemic.
- $3.5 billion per year over 10 years for child care assistance for workers, including $3.3 billion for state grants, $100 million for grants to tribes and tribal organizations, and $75 million for grants to territories each year.
- $1 billion for one-time grants to Head Start agencies.
- $122.8 billion for the Elementary and Secondary School Emergency Relief (ESSER) Fund, of which school districts must use 20% of the funds they receive to address learning loss.
- Provides $800 million out of the total ESSER funds to identify homeless children and youth and provide wrap-around services and assistance to improve attendance and participation in school activities.
- Requires local education agencies receiving ESSER funds to develop a plan for safe return to in-person instruction within 30 days of receiving these funds.
- $2.75 billion for the Emergency Assistance to Non-public Schools program for governors to provide services or assistance to private schools that enroll a significant percentage of low-income students.
- $39.6 billion for the Higher Education Emergency Relief Fund, of which non-profit institutions of higher education must use at least 50% of their funds on emergency financial aid grants to students.
- Includes maintenance of effort language requiring states to maintain support for K-12 and higher education in FY 2022 and 2023 at the same proportional level relative to the state's overall spending averaged over FY 2017-2019.
- $100 million for the Institute of Education Sciences for research to address learning loss caused by the coronavirus among specific student populations, including homeless students and students in foster care.
- Updates the tax code to ensure any forgiven student loans before 2025 do not count as part of a borrower's taxable income, including those forgiven under income-based repayment plans or forgiven as part of the borrower defense to repayment process.
- $91.1 million for the Student Aid Administration to prepare and respond to the COVID-19 pandemic, which can be used for direct outreach to students or borrowers related to financial aid, economic impact payments, means-tested benefits, and tax benefits, if the student is eligible.
- Directs the Department of Education to conduct a rulemaking to close the 90/10 "loophole" by requiring for-profit institutions to include all federal funding, including veteran's assistance funding, as part of their calculation of federal education assistance funds, which would apply to institutional fiscal years beginning on or after January 1, 2023.
- Provides $3 billion in funding under the Individuals with Disabilities Education Act (IDEA), specifically $2.6 billion for state grants, $200 million for preschool grants, and $250 million for infant and toddler programs under IDEA.
- $200 million for the Department of Labor to implement COVID-19 related worker protection activities, of which at least $100 million will go to the Occupational Safety and Health Administration (OSHA), including $10 million for the Susan Harwood training grants and at least $5 million for OSHA enforcement of high-risk workplaces, including healthcare, meat and poultry processing facilities, agricultural workplaces, and correctional facilities.
- $250 million for child abuse and neglect prevention programs under Title II of the Child Abuse Prevention and Treatment Act (CAPTA), as well as an additional $100 million for child abuse and neglect treatment and response state programs under section 106 of CAPTA.
Title III - Energy and Commerce (Healthcare)
- $7.5 billion for activities to plan, prepare for, promote, distribute, administer, monitor, and track COVID-19 vaccines.
- $1 billion to strengthen vaccine confidence, provide education on licensed vaccines, and improve vaccination rates.
- $5.2 billion for COVID-19 vaccines and therapeutics supply chains.
- $500 million for FDA activities regarding vaccines, therapeutics, and diagnostics for COVID-19 variants.
- $47.8 billion for COVID-19 testing, contact tracing, surveillance, and mitigation.
- $1.75 billion for genomic sequencing, analytics, and disease surveillance.
- $750 million for global health security, global disease detection and response, global health protection, global immunization, and global coordination on public health.
- $500 million for public health data surveillance, analytics infrastructure modernization initiatives, and a US disease warning system.
- $7.6 billion to establish, expand, and sustain a public health workforce.
- $100 million for the Volunteer Medical Reserve Corps.
- $7.6 billion for Community Health Centers.
- $800 million for the National Health Service Corps.
- $200 million for Nursing Workforce Development loan repayment and scholarship programs.
- $330 million for Teaching Health Centers that operate Graduate Medical Education.
- $1.8 billion to detect, diagnose, trace, and monitor SARS-CoV-2 and COVID-19 infections, and to mitigate the spread in congregate settings.
- $50 million for grants and contracts for family planning services.
- $5 million for the HHS Office of Inspector General for oversight activities.
- $1.75 billion for block grants for community mental health services.
- $1.75 billion for block grants for prevention and treatment of substance abuse.
- $80 million for Health Resources and Services Administration (HRSA)-administered mental health programs.
- $20 million for Centers for Disease Control and Prevention (CDC)-administered mental health programs for health care professionals and first responders.
- $40 million for HRSA-administered mental health programs for health workforce professionals.
- $30 million for Substance Abuse and Mental Health Services Administration (SAMHSA)-administered infectious disease prevention programs for individuals with substance use disorders.
- $50 million for SAMHSA-administered mental health programs.
- $10 million for grants to address high-risk or medically underserved persons who experience violence-related stress.
- $30 million for prioritizing mental health needs of regional and national significance with respect to advancing wellness and resiliency in education.
- $20 million for Youth Suicide Prevention Programs.
- $100 million for mental and behavioral health education and training grants.
- $20 million for grants for modernization of American Health Benefits Exchanges.
- For individuals who receive unemployment compensation during 2021, reduces cost-sharing for individuals enrolling in qualified health plans.
- $80 million for pediatric mental health care access grants.
- $420 million for the Certified Community Behavioral Health Clinic Expansion Grant Program.
- Requires the Secretary of HSS recalculate the annual DSH allotments to ensure that the total DSH payments (including both Federal and State shares) that a State may make related to a fiscal year is equal to the total DSH payments that the State could have made for such fiscal year without increase to the FMAP during the COVID-19 public health emergency.
- $8.5 billion for eligible rural health care providers for health care related expenses and lost revenues that are attributable to COVID-19. This funding is separate from the Provider Relief Fund (PRF).
- For discharges occurring on or after October 1, 2021, the area wage index to any hospital in an all-urban State may not be less than the minimum area wage index for the fiscal year for hospitals in that State. Directs the Secretary of HHS to establish a minimum area wage index for a fiscal year for hospitals in each all-urban State.
- Amends the Secretary's authority to waive requirements during national emergencies to include ambulance services that include the transport of an individual to the extent necessary to allow payment for ground ambulance services furnished in response to a 911 call in cases in which an individual would have been transported to a destination permitted under Medicare regulations, but such transport did not occur as a result of community-wide emergency medical service (EMS) protocols due to the PHE.
- Requires Medicaid state plans to cover: (1) the cost of COVID-19 vaccines and administration; (2) drugs, biologicals, products or services for the treatment, or prevention, of COVID–19; and (4) treatment of a condition that may seriously complicate the treatment of COVID-19.
- Extends Medicaid coverage of pregnancy-related and postpartum medical assistance from 60 days following birth to 12 months, for a period of 5 years.
- Provides Medicaid coverage for services for incarcerated individuals for the 30-day period preceding their release.
- Extends Medicaid coverage to community-based mobile crisis intervention services.
- Incentivizes non-Medicaid expansion states to expand their programs by increasing the federal medical assistance percentage (FMAP) FMAP by five percent for two years following Medicaid expansion.
- Provides a 100% FMAP for services provided by Urban Indian Health Organizations and Native Hawaiian Health Care Systems, for two years.
- Sunsets the current cap on Medicaid rebates for single source and innovator multiple source drugs, effective January 1, 2024.
- Increases the FMAP for home and community-based services (HCBS) by 7.35 percent for one year, but caps FMAP for such services at 95%.
- $200 million for state COVID-19 strike teams deployed to nursing homes.
- Requires Children's Health Insurance Program (CHIP) coverage of COVID-19 vaccines, drugs, biological products, and treatments (including administration) without cost sharing to the beneficiary.
- Allows the option for states to extend full CHIP benefits for women through the 12-month postpartum period.
Title IV - Financial Services Committee
- $10 billion to enhance the availability of medical supplies and equipment through the use of the Defense Production Act, particularly for PPE, diagnostic supplies/equipment, and vaccines and other products for use in preventing or treading COVID-19.
- $10 billion for a reauthorized State Small Business Credit Initiative (SSBCI), to support state-run programs aimed at supporting small businesses including capital access programs, collateral support programs, loan guarantee programs, and venture capital programs.
- $26.75 billion for emergency rental assistance, the bulk of which will be allocated by the Treasury Department to state and local governments for purposes of helping renters with rent and utilities assistance. $5 billion of these funds will go toward Housing Choice Vouchers to transition at risk people to stable housing, and other smaller sums will target rural housing, and housing counseling services.
- $5 billion for homelessness assistance.
- $10 billion for homeowner assistance funding, distributed to states/territories/tribes for providing direct assistance with mortgage payments, taxes, utilities, insurance, and other related costs.
Title V - Oversight and Investigations Committee
- $219.8 billion for State Coronavirus Fiscal Recovery Funds to be distributed to States, territories, and Tribal governments, which can be used to respond to or mitigate COVID-19 or its negative economic impact, cover costs incurred, replace lost revenue, or address the negative economic impacts of the pandemic.
- $130.2 billion for Local Coronavirus fiscal Recovery Funds, of which $65.1 billion is to be distributed to cities using a modified Community Development Block Grant formula and $65.1 billion goes to counties within 60 days of the Treasury Department receiving the county's Certification of Need.
- $570 million for the Emergency Federal Employee Leave Fund, which would provide up to 600 hours of emergency paid leave related to COVID-19 to civilian federal employees and postal workers until September 30, 2021.
- $77 million to the Government Accountability Office to remain available until September 30, 2025.
- $40 million to the Pandemic Response Accountability Committee to remain available until September 30, 2025 to promote transparency and support oversight of the coronavirus response and of funds provided in this and other COVID-related Acts.
- $12.8 million for necessary expenses for the White House to prevent, prepare for, and respond to coronavirus.
- $50 billion to the Federal Emergency Management Agency (FEMA) to remain available until September 30, 2025 for the Disaster Relief Fund. The President shall also use these funds to provide financial assistance to an individual or household to meet COVID-related funeral expenses.
- $400 million to FEMA to remain available until September 30, 2025 for the emergency food and shelter program, and an additional $110 million for the program to provide humanitarian relief to families and individuals encountered by the Department of Homeland Security.
- $650 million to remain available until September 30, 2023 for the Cybersecurity and Infrastructure Security Agency (CISA) for cybersecurity risk mitigation.
- $200 million to remain available until September 30, 2024 for the US Digital Service.
- $1 billion to remain available until September 30, 2025 for the Technology Modernization Fund.
- $150 million to the General Services Administration (GSA) to remain available until September 30, 2024 for the Federal Citizen Services Fund.
- $300 million to FEMA to remain available until September 30, 2025, of which $100 million will be for firefighter grants and $200 million will be for staffing for adequate fire and emergency response grants.
- $100 million to FEMA to remain available until September 30, 2025 for emergency management performance grants.
- Extends the reimbursement authority for federal contractors from September 30, 2020 to September 30, 2021.
- Provides that a federal employee diagnosed with COVID-19 who carried out duties that required contact with patients, members of the public, or co-workers, or included a risk of exposure to COVID-19, is deemed to have an injury that is proximately caused by employment, per the Federal Employees' Compensation Act (FECA). Such employee is entitled to benefits for a FECA claim.
Title VI - Small Business Committee
Paycheck Protection Program (PPP)
- $7.25 billion for PPP.
- Expands nonprofit eligibility for PPP First Draw and Second Draw loans to include all 501(c) organizations meeting the required size standard except for 501(c)(4)s; nonprofits that, if they were a business entity, would be described in 13 CFR 120.110 (excluding paragraphs (a) and (k); and organizations with significant lobbying activities.
- Makes larger nonprofits eligible for PPP by striking the application of the SBA's affiliation rules to nonprofits and instead looking at the employee headcount at the "per physical location" level of the organization.
- Expands PPP First Draw and Second Draw eligibility for internet publishing organizations that meet the required size standard and have a NAICS code of 519130.
Targeted Economic Injury Disaster Loan (EIDL) Advance Program
- $15 billion for the Targeted Economic Injury Disaster Loan (EIDL) Advance program, of which the SBA Administrator shall use $10 billion to pay entities that have not received the full EIDL advance to which they were entitled under the Economic Aid Act (Pub. L. 116-260) and $5 billion to make additional $5,000 EIDL advance payments to entities that (1) suffered an economic loss of greater than 50 percent and (2) employs not more than 10 employees.
Restaurant Revitalization Fund
- Establishes the Restaurant Revitalization Fund in the US Treasury to provide grants equal to the entity's pandemic-related revenue loss and up to $10 million, subject to certain exceptions, to certain food and beverage establishments. Priority is given to women-owned small businesses, veteran-owned small businesses, and socially and economically disadvantaged small businesses. If an entity fails to use all grant funds or permanently closes before or on the last day of the covered period, the entity must return funds not used for allowable expenses.
- $28.6 billion for the Restaurant Revitalization Fund, of which $5 billion is set aside for businesses with not more than $500,000 in 2019 annual revenue.
Community Navigator Pilot Program
- Establishes the Community Navigator Pilot Program through December 31, 2025 to ensure the delivery of free community navigator services to current or prospective owners of eligible businesses in order to improve access to assistance programs and resources made available because of the COVID-19 pandemic by Federal, State, Tribal, and local entities.
- $100 million for community navigator grants to be awarded to organizations to ensure the delivery of free community navigator services to businesses to improve access to COVID-19 relief programs.
- $75 million for outreach and education related to the community navigator services, including a telephone hotline.
Shuttered Venue Operators
- $1.25 billion for the SBA Shuttered Venue Operators Grant (SVOG) Program, including a set aside for technical assistance to help entities apply for grants.
- Permits an entity to apply for an SVOG even if they applied for a First Draw or Second Draw PPP loan on or after December 27, 2020. An entity that receives a PPP loan on or after December 27 will have the PPP loan amount deducted from the SVOG amount.
- Prohibits an entity from receiving a PPP loan after they receive an SVOG.
- $840 million for administrative costs to prevent, prepare, and respond to COVID-19, including expenses related to PPP, the Targeted EIDL Advance Program, the SVOG Program, and the Restaurant Revitalization Fund.
- $460 million for the SBA's disaster loan program, of which $70 million is for the cost of direct loans and $390 million is for administrative costs.
- $25 million for SBA's Office of Inspector General for oversight.
Title VII - Transportation and Infrastructure Committee
- $50 billion for FEMA's Disaster Relief Fund for response and recovery activities related to COVID-19.
- $30.5 billion for transit agencies to assist with payroll and operating expenses, including PPE expenditures.
- $8 billion for airports to cover operating expenses, debt service payments, and airport development projects, including $800 million for airport concessionaires.
- $3 billion for the Economic Development Administration to provide adjustment assistance to help prevent, prepare for, and respond to economic injury caused by the COVID-19 pandemic.
- $3 billion in temporary payroll support to retain or rehire workers in aviation manufacturing.
- $1.7 billion for Amtrak to provide assistance to rail workers and restore daily long-distance service.
- $15 billion for airline industry workers via the Payroll Support Program, which is extended from March 31 to September 30, 2021. This includes $14 billion for employees of eligible air carriers, as well as $1 billion for employees of eligible aviation contractors.
Title VIII - Veterans' Affairs Committee
- $272 million for veterans claims and appeals processing, which will remain available until September 30, 2023.
- $13.5 billion for veterans' medical care and health needs, which includes no greater than $4 billion for health care provided through the Veterans Community Care program. The funding will remain available until September 30, 2023.
- $100 for the supply chain modernization initiative within the VA, which shall remain available until September 30, 2022.
- $500 million for VA state homes, which shall remain available until expended and $250 million for a one-time obligation to existing state extended care facilities for veterans, which shall remain available until September 30, 2022.
- Provides $386 million for a 12-month COVID-19 veteran rapid retraining assistance program to help veterans unemployed as a result of the pandemic.
- Prohibits the VA from charging veterans' copayments for medical care during the pandemic.
Title IX - Ways and Means Committee
- $422 billion in recovery rebates of $1,400 to eligible taxpayers and dependents.
- $110 billion in expanded Child Tax Credits for families.
- $25 billion in strengthened Earned Income Tax Credits.
- $8 billion in expanded Child and Dependent Care Tax Credits.
- Stabilizes multiemployer provided pensions for more than 1 million Americans.
- $200 million for infection control support to skilled nursing facilities through contracts with quality improvement organizations.
- $250 million for strike teams for resident and employee safety in skilled nursing facilities.
- Provides 85% premium assistance for assistance eligible individuals that are enrolled in COBRA continuation coverage.
- Temporarily expands the availability and amount of Affordable Care Act premium tax credits.
- Temporarily suspends a tax on individuals if their advance premium tax credit is higher than the premium tax credit that the individual was entitled to receive during that year.
- Establishes a special rule during taxable year 2021, under which individuals who receive unemployment compensation are treated as having a household income of no higher than 133% of the federal poverty line for purposes of eligibility for premium tax credits.
- Offsets the cost of several provisions by extending for an additional year the limitation on excess businesses losses by noncorporate taxpayers, by permanently repealing the worldwide interest allocation rules, by expanding the denial of deduction for compensation in excess of $1 million for the five highest compensated employees, and by reducing the de minimis reporting threshold to $600 for third-party settlement organizations.
© Arnold & Porter Kaye Scholer LLP 2021 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.