American Rescue Plan Act of 2021

American Rescue Plan Act of 2021

The American Rescue Plan Act of 2021 (ARPA) is a $1.9 trillion economic stimulus bill passed by the 117th United States Congress and signed into law by President Joe Biden on March 11, 2021. The legislation was enacted to facilitate the United States' recovery from the economic and health effects of the COVID-19 pandemic and the ongoing recession.

President Joe Biden signing the American Rescue Plan into law

Background

The COVID-19 pandemic, which began in early 2020, led to widespread economic disruption, with millions of Americans losing their jobs and businesses facing unprecedented challenges. In response, the U.S. government enacted several relief measures, including the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in March 2020. However, as the pandemic persisted, further assistance was deemed necessary.

Provisions

The American Rescue Plan Act includes a wide range of measures aimed at providing relief to individuals, families, businesses, and local governments. Key provisions include:

• Direct Payments: The Act provides for direct payments of $1,400 to individuals earning up to $75,000 annually, with phased reductions for higher earners.
• Unemployment Benefits: An extension of enhanced unemployment benefits, providing an additional $300 per week through September 6, 2021.
• Child Tax Credit: An expansion of the Child Tax Credit, increasing the amount and making it fully refundable.
• State and Local Aid: $350 billion allocated to state and local governments to mitigate the fiscal impact of the pandemic.
• Education Funding: $130 billion for K-12 schools to assist with safe reopening and addressing learning loss.
• Health Care: Funding for COVID-19 testing, contact tracing, and vaccine distribution.

Infographic summarizing the American Rescue Plan Act

Legislative History

The American Rescue Plan Act was introduced in the House of Representatives as H.R. 1319. It passed the House on February 27, 2021, by a vote of 219-212, with all Republicans and two Democrats voting against it. The Senate made amendments and passed the bill on March 6, 2021, by a vote of 50-49, with all Democrats voting in favor and all Republicans voting against. The House approved the Senate's amendments on March 10, 2021.

Senate Majority Leader Chuck Schumer and Speaker of the House Nancy Pelosi at the enrollment ceremony for the American Rescue Plan Act

Impact

The American Rescue Plan Act has been credited with accelerating the economic recovery in the United States. It provided critical support to millions of Americans and helped stabilize the economy during a period of uncertainty. The direct payments and expanded unemployment benefits were particularly impactful in reducing poverty and supporting consumer spending.

Criticism and Controversy

While the American Rescue Plan Act received widespread support from Democrats, it faced criticism from Republicans who argued that the bill was too costly and included provisions unrelated to the pandemic. Concerns were also raised about the potential for increased inflation as a result of the large-scale government spending.

Letter from Senate Republicans to President Biden concerning COVID-19 relief proposal

Related Pages

• Coronavirus Aid, Relief, and Economic Security Act
• COVID-19 pandemic in the United States
• Economic impact of the COVID-19 pandemic