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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.

To pass this package, President Biden and congressional Democrats are using 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.

The House will vote on the ARP on Friday, February 26, and it is expected to pass narrowly on a party-line or near party-line vote. It is possible that five or fewer Republicans vote for 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). Congress' inability 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.

Once the bill passes the House, the Senate will bring it immediately to the floor and begin debate, bypassing the committee process. Senate Majority Leader Chuck Schumer (D-NY) has consistently promised Congress will deliver the bill to President Biden before March 14, when extended unemployment benefits are scheduled to expire.

While we know the Senate will ultimately pass the ARP, the content of the final package is still unclear. On Thursday, February 25, the Senate parliamentarian ruled the proposed minimum wage increase in the ARP does not comply with the restrictions of the reconciliation process, also known as the "Byrd Rule," which limits reconciliation bills to provisions that materially raise revenue or spend federal funds. The House is still going to pass the ARP with the minimum wage provision, so the Senate will then strip the provision out in its debate and make other changes before it sends the package back to the House.  The House will then need to vote on the Senate-passed version of the ARP before it can head to the President’s desk.  We would expect that second House vote to again be decided by a very narrow margin and perhaps strictly on party lines.

On the Republican side, the most likely candidates to support the ARP are Senators Susan Collins (R-ME) and Lisa Murkowski (R-AK). But it is possible the ARP will pass without any Republican support in the Senate after Senators Rob Portman (R-OH) and Mitt Romney (R-UT) penned editorials on February 24 in the Washington Post and the Wall Street Journal presenting a litany of reasons Republicans should not support the overall package.

If no Republicans vote for the ARP, Vice President Kamala Harris will cast a tie-breaking vote for the package.

Multiple reputable public polls out in the last two 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. 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.

Arnold & Porter established the Biden-Harris Agenda Resource Team to advise clients on the changing landscape. Subscribe to our "Biden-Harris Agenda" mailing list to receive our latest client content. Join us on Monday, March 1 at 1:00 pm Eastern for a webinar on the ARP and the first 30 days of the Biden-Harris Adminstration. Register for the webinar here.

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

  • Increases 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.
  • $128.6 billion for the Elementary and Secondary School Emergency Relief Fund, of which school districts must use 20% of the funds they receive to address learning loss.
  • $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, students in foster care, and students whose parent is a member of the military.
  • No student loan relief.
  • $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.
  • $150 million for the Department of Labor to implement COVID-19 related worker protection activities, including $10 million for Susan Harwood training grants and at least $5 million for Occupational Safety and Health Administration (OSHA) enforcement of high-risk workplaces, including healthcare, meat and poultry processing facilities, agricultural workplaces, and correctional facilities.
  • $1.4 billion for Older American Act programs, including $750 million for nutrition programs, $25 million for nutrition and related services for Native American programs, $470 million for Home and Community Based Services, $44 million for Title III-D programs to support healthy lifestyles, $145 million for the National Family Caregiver Support program, and $10 million for the long-term care ombudsman program.
  • $425 million for the Secretary of Health and Human Services to use for cost increases due to COVID-19 within Administration for Children and Families programs.
  • $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)

Subtitle A - Public Health

  • $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.
  • $46 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.
  • $425 million for children in the care of personnel employed by or under a grant, cooperative agreement, or contract with HHS.
  • $5 million for the HHS Office of Inspector General for oversight activities.
  • $6.09 billion for the Indian Health Service.
  • $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.

Subtitle B: Budget Reconciliation Legislation Recommendations Relating to Medicaid

  • 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.
  • 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 for 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, 2023.
  • 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%.
  • $250 million for state COVID-19 strike teams deployed to nursing homes.

Subtitle C: Budget Reconciliation Legislative Recommendations Relating to CHIP

  • 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.
  • $25 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 Native American housing needs, USDA-subsidized properties, 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.
  • $40 million to the Pandemic Response Accountability Committee to promote transparency and support oversight of the coronavirus response and of funds provided in this and other COVID-related Acts.

Title VI - Small Business Committee

Paycheck Protection Program (PPP)

  • $7.25 billion for new Paycheck Protection Program loans.
  • 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.
  • Directs EPA to, 28 days after enactment, make remaining funding for the Targeted EIDL Advance program available for supplemental grants to "severely impacted" small businesses.

Restaurant Revitalization Fund

  • Establishes the Restaurant Revitalization Fund to provide grants of up to $10 million, subject to certain exceptions, to food and beverage establishments with no more than 20 locations that suffer "pandemic-related revenue loss."
  • $25 billion for the Restaurant Revitalization Fund, of which $5 billion is set aside for businesses with less than $500,000 in 2019 annual revenue.

Community Navigator Pilot Program

  • Establishes the Community Navigator Pilot Program through December 31, 2025 to increase awareness of and participating in COVID-19 relief programs for business owners currently lacking access, with priority for businesses owned by socially and economically disadvantaged individuals, women, and veterans.
  • $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.

Shuttered Venue Operators

  • $1.25 billion more for the SBA Shuttered Venue Operators Grant Program, including a set aside for technical assistance to help entities apply for grants.

Direct Appropriations

  • $840 million for administrative costs to prevent, prepare, and respond to COVID-19, including expenses related to PPP, Shuttered Venue Operators Grant Program, and 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 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 aerospace manufacturing.
  • $1.5 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 Department of 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.

© 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.

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