by Sydney Wiser ‘23
On March 11, President Joe Biden officially signed The American Rescue Plan Act into law. While lacking a promised federal requirement for a $15 minimum wage, it is still one of the most progressive pieces of legislation passed in recent decades. The plan is a $1.9 trillion stimulus package, with the most notable portion of this package being the $1,400 stimulus checks that will be provided for individuals making under $75,000 and $2,400 for married couples making less than $150,000.
However, the package is quite extensive and includes other important relief benefits such as the continuation of the $300 weekly unemployment boost until 6 September 2021 that was established during the pandemic. The act also allows the government to pay for a Consolidated Omnibus Budget Reconciliation Act (COBRA) premium from April 1 through September 30. COBRA is a government insurance program for the unemployed but it is typically expensive because the individual is paying the full premium as opposed to sharing that cost with their employer. Increasing the child tax credit is another crucial portion of the The American Rescue Plan. For the 2021 tax season, taxpayers are allowed to deduct $3,000 per child ages six to seventeen and $3,600 per child under six years from their income taxes. Student loan forgiveness would also be taken off from income taxes through the year 2025. The act also includes support for pandemic relief in the form of $14 billion for vaccine distribution and $350 billion provided for state and local pandemic aid.
During his campaign to become president, progressives had questioned how far left Biden would go with his policies. He is known for making compromises across the aisle and compared to his primary candidates, he was far more moderate. However, this bill highlights the progressive approach Biden seems to be willing to take on the economy as America slowly recovers from the pandemic. The stimulus package focuses on providing substantial monetary support to low income and unemployed Americans. The goal is to help those who have fallen on hard times during the pandemic get back on their feet more so than benefiting the wealthy. This contrasts the trickle down economic approach that the previous administration took in the early days of the pandemic and even before that with the passing in 2017 of the Tax Cut and Jobs Act that significantly lowered the corporate tax rate for businesses from a maximum of 35 percent to 21 percent.
No Republican Congress members voted in favor of the stimulus package. Many who voted against it expressed opposition to the substantial amount of money within it, citing the concern that some of the money could be wasted on those who did not economically suffer during the pandemic. In response to these concerns, Biden has appointed Gene Sperling, a Democratic economic aide, to oversee the spending of the bill. Sperling has extensive experience as an economic aide and has worked under former Presidents Barack Obama and Bill Clinton as a director of the National Economic Council. Sperling’s responsibilities will include coordinating with state and local governments to effectively distribute the relief bill funds to those in need.
The stimulus checks have already begun to be sent out to individuals and those who are still waiting are likely to receive theirs by the end of the month as new payments continue to roll out in the next couple weeks. Many of the other benefits are to be put into action within the next several months. The question now is, is this package a sign of progressive policy to come from the Biden administration, or a one time occurance put out in a time of need?