Congress has passed and President Biden is expected to sign into law, the “American Rescue Plan Act of 2021” (American Rescue Plan), a $1.9 trillion coronavirus relief package aimed at addressing the effects of the COVID-19 pandemic. Many of the provisions of the American Rescue Plan are similar to those found in prior stimulus bills passed by Congress. Funds are provided for greater access to vaccines and testing as before. And popular assistance programs such as the Paycheck Protection Program receive additional funding, as well. However, there are some changes from prior stimulus efforts, as well. Details are discussed below.
Health care measures include additional funds for COVID-19 testing and vaccine development. The American Rescue Plan includes health care provisions aimed at mitigating the spread of the virus and aiding the distribution efforts of vaccines. $50 billion is dedicated to additional COVID-19 testing and contract tracing. $20 billion will help improve vaccine distribution and supply chains. However, the American Rescue Plan also expands tax credits for those purchasing health insurance through the “marketplaces” created under the Affordable Care Act, through 2022. Additionally, it also subsidizes 100% of COBRA premiums for those who have lost their jobs but wish to stay on their former employer’s health plan. Coverage of COBRA premiums will be for a limited time, through September.
Who will get stimulus checks? The American Rescue Plan provides $1,400 direct stimulus payments for individuals earning up to $75,000 annually and married couples earning up to $150,000, plus an additional $1,400 per dependent. Adult dependents – anyone over the age of 16 - may also qualify for the $1,400 payment. For the first time, this includes college students. As with prior stimulus checks, it is expected that the IRS will direct deposit these funds for those it has bank account information and mail payments to everybody else.
Extended and additional unemployment benefits. In addition to direct payments, the American Rescue Plan includes additional federal employment assistance, on a weekly level, and extends their availability. It provides $300 in weekly unemployment to Americans on top of what is provided by the states. Further, the period of eligibility for these additional federal benefits will be extended, until September 6, 2021. The current period of benefits is scheduled to expire on March 14th. The first $10,2000 of unemployment benefits would be considered non-taxable income, for households earning less than $150,000.
No increase in minimum wage. The American Rescue Plan does not include an increase in the minimum wage. The House of Representatives had increased the minimum wage to $15 an hour, however this provision was not retained by the Senate. The federal minimum wage remains $7.25 an hour.
More money for the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL). Both the PPP and EIDL received additional funding under the American Rescue Plan. The PPP was provided with $7.25 billion while the EIDL received $15 billion. Both of these programs have been extremely helpful to businesses during the pandemic. The PPP has been especially helpful as much of it loan funding can become grant funding, provided it is used for such things as keeping employees on payroll.
Since the inception of the PPP, GCSAA has lobbied Congress to include 501c7 organizations, such as private clubs, as eligible recipients. This is nothing more than a question of fairness: Private clubs are facing the same concerns with keeping their doors open as any other employer. We’re pleased to announce that Congress has responded: Private clubs with less than 300 employees may be eligible to receive PPP loans. This is, however, subject to existing exclusions under Small Business Administration (SBA) regulations. GCSAA cannot provide legal advice as to final decisions on eligibility. Clubs are encouraged to consult their own legal counsel as well as any guidance prepared by the SBA.
State and Local Aid. The American Rescue Plan includes $350 billion for state, local and tribal governments. States would split $195 billion. Cities and counties would get $120 billion. $10 billion would go to infrastructure projects. This would be the first time funds would be directed to state and local governments since the CARES Act passed in March 2020.
“Go big”. In pushing stimulus legislation with a $1.9 trillion price tag, the Biden Administration and congressional Democrats clearly decided to go big. The result was a partisan vote that attracted no Republican support. Because of this, we would likely not see any additional stimulus legislation considered in Congress until the fall, at the earliest. The hope is that it will not be needed.