The stimulus checks and other economic measures to alleviate the woes of the pandemic were a learning process for the federal administration.
The mistakes made during the first and second rounds were to a large extent rectified in the third and it was a more comprehensive package that provided way more than direct payments to citizens. It was one major reason that the economy was back on track so quickly once the restrictions were lifted.
While the 3rd stimulus check looks a lot like the first (CARES Act) and also the 2nd (COVID-Related Tax Relief Act) stimulus payments. But there are vastly different from the American Rescue Plan Act not so much in the total amount but in the scope and vision of the Act.
The ARPA was signed in March 2021 by President Biden within two months of coming to power. More people benefitted from the third round of the stimulus checks and its accompanying measures.
The Third Stimulus Check Had A Larger Base Amount
The base amount of the first round of stimulus checks, the CARES Act of 2020 was $1,200. The amount went down even further to $600 for the 2nd round of payments under the COVID-Related Tax Relief Act. But the 3rd round base amount for the stimulus checks was higher at $1,400.
The $1,400 was arrived at after many Americans expected $2,000 and received only $600 in the second round of the stimulus checks. President Biden had initially promised that amount. But many Democratic lawmakers were not willing to go along with such a large amount. President Biden eventually had to settle for $1,400. Thus along with the $600 in the previous round, Americans eventually received the full amount that they had sought.
The price tag, close to $2 trillion, makes this one of the most expensive economic rescue legislation in American history. It is a part of the Build Back Better initiative of President Biden.
The Rescue Plan differed from other measures in its range and scope. It provided funds for state, local, and tribal governments to help them compensate for losses in tax revenues. It gave money to schools from kindergarten through 8th grade helping them safely open during the pandemic. it also subsidized COVID-19 vaccinations and testing programs.
Though the jobs plan and the family plan did not make it past a partisan Congress, components of each of the bills were introduced in the Inflation Reduction Bill that was passed in August 2022 after Democratic Senators Joe Manchin and Kyrsten Sinema withdrew their opposition to it but not before extracting their pound of flesh.
The Key Takeaway Of The Rescue Plan: It Was More Than The Third Stimulus Check
The American Rescue Plan Act, 2021w was designed to facilitate the recovery of America from the devastation economic downturn and the health effects of the COVID-19 pandemic. the plan came into being after the House passed it on February 27, 2021, and the Senate a week later on March 6, 2021.
The bill was finally signed into law by President Joe Biden on March 11, 2021, a couple of months after he took over office from Trump in an acrimonious battle that led to riots in Washington.
The final package came to $1.9 trillion and made it one of the largest ever economic rescue packages in US history. It combined efforts to mitigate the economic downturn triggered by the pandemic with strategies and initiatives to battle the pandemic.
The American Rescue Plan was part of the Build Back Better plan which was blocked by the virulently partisan Republicans Party.
Direct Financial Payment Was At The Core Of The Rescue Plan
The Rescue Plan enabled a direct payment of $1,400 to eligible Americans including dependents. It built on the second stimulus payment of $600 to bring it to an even $2,000. The election had a role to play in determining the final amount of the stimulus check.
The maximum payment went to individuals with an adjusted gross income (AGI) of $75,000 or less, while for a couple filing jointly, the maximum AGI allowed was $150,000.
The stimulus check amount tapered with an increase in income and disappeared completely once the AGI reached $80,000 for individuals and $160,000 for married couples filing jointly.
The Unemployment Benefits Were Extended
The weekly benefits under the Pandemic Unemployment Assistance (PUA) of $300 were extended through September 6, 2021. The total number of weeks that the benefits were made available was thus increased from 50 to 79. The Federal Pandemic Unemployment Compensation (FPUC) benefits worth $300 were also extended through September 6, 2021.
Additionally, the initial $10,200 benefit for 2020 was made tax-free for families whose combined earnings were $150,000 or below. Further, people who had taxes withheld from 2020 unemployment benefits could recover the excess amount when they filed their 2020 returns or through an amended tax return if they filed earlier.
The Rescue Plan Act also enabled a 100% subsidy on premiums of COBRA health insurance schemes. This enabled even unemployed workers on the healthcare plans of their ex-employers till September 2021.
Increase In Financial Assistance While Moratoriums Remain Intact
The present moratoriums on foreclosure and eviction which was to end on March 31, 2021, will not be extended. But relief will be provided by additional funding to people who have been left behind on rent, utility bills, and mortgages. Under the Act, $21.55 billion was provided for emergency rental assistance through September 30, 2027. Another $100 million was provided for the improvement of tribal housing and $5 billion for housing vouchers till September 2030.
Another $100 million was for rural housing and $5 billion for assistance to the homeless.
Increase In Food Aid And The Child Tax Credit Stimulus Check
The legislation allowed a 15% increase in food aid benefits and provided $1.15 billion to states for the Supplemental Nutrition Assistance Program. Another $1 billion was provided for nutrition assistance.
The American Rescue Plan Act extended the Child Tax Credit stimulus check to between $3,000 and $3,600 from $2,000 earlier. 50% of the payments continued through monthly checks, between July and December 2021 while the rest were paid through a rebate on taxes once people filed their 2021 income tax returns in the first quarter of 2022.
