President Biden’s American Rescue Plan provides $1.9 trillion to help working people recover from the effects of the COVID-19 pandemic. Although the bill passed both the House and Senate and was signed into law, no Republican members of Congress voted for this critical bill.
Most of us are familiar with the direct emergency relief payments of up to $1400 per person that were included in the bill. But that’s just one way that it will help CWA members, retirees and our families.
The bill also contains funding to keep workers safe, protect jobs, help workers who’ve faced furloughs or layoffs due to the pandemic, and stabilize the pensions we’ve earned.
Here are some of the most important provisions.
State and Local Government Aid
Many CWA members work for state and local governments, and all of us rely on public services. The pandemic has created unexpected costs for state and local governments and impacted the revenue that they receive from taxes and fees.
The American Rescue Plan includes $350 billion in aid to state, local, tribal and territorial governments to help them continue to provide vital services during the pandemic and the recovery.
Throughout the pandemic, Republican Senate Minority Leader Mitch McConnell has been opposed to providing this aid. In one interview, he said that he preferred that states declare bankruptcy.
State and local government aid in the American Rescue Plan can be used to:
- Respond to the health impacts or economic impacts of the coronavirus pandemic, including assistance to households, small businesses, nonprofits, and impacted industries;
- Provide premium pay for essential workers up to $13 an hour with an annual cap of $25,000;
- Cover for lost revenue in providing services; and
- Make investments in water, sewer, or broadband infrastructure.
The American Rescue Plan Act ensures that states do not use the funding as a way to cut taxes for the wealthy and corporations. It does not prohibit states from cutting taxes, but includes a provision that funds provided to a state under the Rescue Plan will be reduced by the amount of any tax cuts.
Payroll Support Program (PSP) Extension
The Payroll Support Program, which was included in the CARES Act that passed early in the pandemic, has saved nearly a million jobs in the hard-hit aviation industry, including CWA-represented flight attendants and passenger service agents.
The American Rescue Plan extends that program, preventing airlines that accept the funds from laying off or cutting the pay of workers through September 30, 2021. These funds are intended to help workers, so the bill places restrictions on stock buybacks, dividend payments, and executive pay.
The American Rescue Plan puts retirees who depend on pensions on firmer financial footing. Here’s how:
- Most CWA members and retirees who have pension plans have single employer plans. The American Rescue Plan gives employers a longer period to pay for pension liabilities, It also stabilizes the interest rate used for calculating pension liabilities. These two provisions make it easier for employers to meet their pension obligations without reducing benefits.
- About 10 million workers are covered by a type of pension plan called a multiemployer pension. Retiree benefits from these plans have been at risk due to underfunding. The American Rescue plan provides financial assistance to these plans to cover all benefits due through plan year 2051, with no cuts to accrued benefits.
Paycheck Protection Program (PPP) Extension
The Paycheck Protection Program is another CARES Act provision that is being strengthened by the American Rescue Plan. The PPP provides forgivable loans to small businesses so they can keep people on payroll. The American Rescue plan makes those loans available to more types of businesses, including TV and radio stations and public broadcasters which employ many Newsguild-CWA and NABET-CWA members. It also extends the loans to more kinds of tax-exempt groups, including labor unions.
Support for Education and Child Care
As schools and child care centers shut down during the pandemic, working families scrambled to support their children’s education at home, and school systems redirected funds to ensure that students had computer equipment and internet access. Millions of parents left their jobs or reduced their hours in order to care for their children.
Reopening schools is a top priority for the American Rescue Plan, and parents need reliable child care in order to return to work.
The plan:
- Provides $125 billion in state grants to help local school systems reopen safely, address instruction loss and support students as they recover from the effects of the pandemic.
- Establishes a new fund to reimburse schools and libraries for internet access and connected devices that support remote learning.
- Sends $39.6 billion to colleges and universities and their students, at least half of which must be spent on emergency financial aid grants.
- Expands the Child and Dependent Care Tax Credit to $4,000 per child or $8,000 for two or more children, and makes the credit fully refundable.
- Provides $39 billion for child care, including $15 billion in grants to states to help low-income families afford child care and help essential workers regardless of their income. It also contains $24 billion for state grants to child care providers.
Major Investments in Vaccines, PPE, and Workplace Safety to Get COVID-19 Under Control
Working people have been on the front lines of the pandemic, too often without proper protective equipment or enforcement of safety standards. The American Rescue Plan will ensure that funds are available for testing, contact tracing and personal protective equipment (PPE), to expand domestic production of PPE, and for vaccine procurement and distribution.
The plan also provides funding for the Occupational Safety and Health Administration to support enforcement and worker training in high-risk sectors.
he American Rescue Plan makes it easier for small employers and governments to provide paid leave for workers who have COVID-19, who are caring for someone with COVID-19, are looking after children during virtual classes, or are obtaining a COVID-19 vaccine. For federal employees, the plan creates an Emergency Federal Employee Leave Fund, an Emergency TSA Employee Leave Fund and an Emergency FAA Employee Leave Fund. Private sector employers and state and local governments are eligible for paid leave tax credits. These programs run through September 30, 2021.
Unemployment Assistance and Health Care Coverage
Millions of workers lost their jobs during the pandemic. The American Rescue Plan extends pandemic-related unemployment assistance that was set to expire on March 14, including the current $300 supplement to unemployment benefits, for another six months through Sept. 6, 2021. It also clarifies that the first $10,200 of unemployment benefits received by taxpayers making less than $150,000 will not be subject to federal taxation.
Most Americans receive health care coverage through their employer. Losing a job means disruptions to health care coverage. The American Rescue Plan will cover the health care premiums for up to six months for COBRA-eligible workers who lost their job or had reduced hours.
Tax Credits and Economic Support for the Working Class
Working class families have been hit hard by layoffs and reductions in hours during the pandemic. They have struggled to pay rent, buy food, and meet other essential needs.
The American Rescue Plan provides additional income support to families with children and to over 17 million low-paid working adults. It also helps keep workers on the job by providing a tax credit to employers whose business has been financially impacted by COVID-19 who keep people on the job. The plan:
- Increases the Child Tax Credit (CTC ) to $3,600 per child under age 6 and $3,000 for children up to age 17 for one year.
- Expands the Earned Income Tax Credit (EITC) for low-paid working adults without children from $543 to $1,502.
- Provides $21.6 billion for emergency rental assistance to prevent evictions and $10 billion to help homeowners avoid foreclosure.
- Extends a 15% increase to monthly benefits under the Supplemental Nutrition Assistance Program through Sept. 30, 2021.
- Extends the CARES Act employee retention tax credit through Dec. 31, 2021 and increases the percentage of wages covered for severely distressed businesses.