American Rescue Plan Act of 2021

American Rescue Plan Act of 2021

The American Rescue Plan Act of 2021 (ARPA), signed into law on March 11, 2021, by President Joe Biden, is a landmark $1.9 trillion economic stimulus bill aimed at facilitating the United States' recovery from the devastating economic and health effects of the COVID-19 pandemic and the ongoing recession. As part of the broader fiscal policy measures, ARPA encompasses a range of provisions including direct financial aid to Americans, support for small businesses, funding for state and local governments, and significant allocations for COVID-19 testing and vaccine distribution efforts.

Background

The need for ARPA arose from the unprecedented global impact of the COVID-19 pandemic, which led to widespread job losses, business closures, and a significant strain on healthcare systems. Prior to ARPA, the U.S. government had enacted several stimulus packages, including the CARES Act in March 2020, aimed at mitigating the economic fallout. However, as the pandemic persisted into 2021, it became clear that further support was necessary to address the ongoing economic and health crises.

Key Provisions

ARPA introduced several key provisions to provide immediate relief to individuals and businesses affected by the pandemic. These include:

• Direct Payments: ARPA authorized a third round of economic impact payments, often referred to as stimulus checks, providing up to $1,400 per eligible individual, including dependents.
• Unemployment Benefits: The act extended enhanced unemployment benefits, including a $300 per week federal supplement to state unemployment benefits.
• Child Tax Credit Expansion: ARPA expanded the Child Tax Credit (CTC), increasing the credit amount and making it fully refundable for the year 2021.
• Small Business Support: The act allocated additional funds for the Paycheck Protection Program (PPP) and established the Restaurant Revitalization Fund to provide grants to eligible businesses.
• State and Local Government Aid: ARPA provided $350 billion in financial assistance to state, local, territorial, and Tribal governments to mitigate the fiscal effects of the pandemic.
• COVID-19 Testing and Vaccines: The act included funding for COVID-19 testing, contact tracing, and vaccine distribution and administration efforts.

Impact

The American Rescue Plan Act has had a significant impact on the U.S. economy and public health response to the COVID-19 pandemic. The direct financial assistance and expanded social safety net programs have been credited with reducing poverty and providing much-needed relief to millions of Americans. Additionally, the funding for COVID-19 response efforts has contributed to the acceleration of vaccine distribution and administration across the country.

Criticism

While ARPA has been praised for its comprehensive approach to addressing the pandemic's economic and health challenges, it has also faced criticism. Some critics argue that the size of the package was larger than necessary, contributing to inflationary pressures. Others have raised concerns about the long-term impact of the increased federal debt resulting from the stimulus spending.

See Also

• COVID-19 pandemic in the United States
• Fiscal policy of the United States
• CARES Act
• Economic impact of the COVID-19 pandemic