President Biden Proposes Massive COVID-19 Rescue Plan: Summary and Outlook

Holland & Knight LLP

Highlights

  • President Joe Biden has proposed a $1.9 trillion package of policies to address the healthcare, economic and societal harms caused by the COVID-19 pandemic.
  • The plan includes new leave requirements on employers, a $15 federal minimum wage and an additional $1,400 in direct assistance to individuals among other relief to workers and families; additional funding for COVID-19 vaccination, testing and prevention; additional aid to small businesses and local, state and tribal governments; and measures to address recent cybersecurity attacks against the U.S. government by modernizing and securing federal information and technology.
  • Although the plan includes certain executive actions, the vast majority of proposals are dependent on Congress enacting legislation. President Biden has indicated his preference to enact the package through regular order, requiring bipartisan support in the U.S. Senate. However, Democrats in Congress are laying plans to pass the package through budget reconciliation should bipartisan negotiations break down.

President Joe Biden has proposed an "American Rescue Plan," which was described as an "emergency legislative package to fund vaccinations, provide immediate, direct relief to families bearing the brunt of the COVID-19 crisis, and support struggling communities." The plan, announced on Jan. 14, 2021, includes four main categories of proposals:

  • supporting a COVID response plan by mounting a national vaccine program containing the spread of COVID-19 and safely reopening schools
  • delivering immediate relief to working families bearing the brunt of the crisis
  • supporting communities that are struggling in the wake of COVID-19
  • modernizing federal information technology (IT) to protect against future cyberattacks

The plan is a $1.9 trillion package to address the healthcare, economic and societal harms of the COVID-19 pandemic, as well as recent cyberattacks against the U.S. government. Although the current plan is limited on details, it is likely to be expanded upon and subject to negotiations on Capitol Hill in the weeks ahead. This Holland & Knight alert summarizes the plan's proposals and outlines the legislative path forward.

COVID-19 Response and Healthcare Measures

The American Rescue Plan urges Congress to approve $415 billion in emergency spending to establish a national vaccination program, increase reimbursement for vaccines, expand testing and invest in domestic manufacturing of certain pandemic-related medical supplies, including personal protective equipment (PPE). If approved, it would represent the federal government's biggest investment in public health efforts to address the pandemic. These provisions include the following:

  • $50 billion to expand the nation's coronavirus testing efforts, including funding for purchasing rapid tests, increasing lab capacity, and implementing regular testing for schools and local governments
  • $30 billion for the federal Disaster Relief Fund to help ensure that the United States has sufficient supplies and protective gear, as well as provide state and local governments and tribes with 100 percent federal reimbursement for critical emergency response resources, including National Guard deployment (this effort would be in addition to President Biden's commitment to using the Defense Production Act to produce more supplies)
  • $20 billion in a national vaccination program in partnership with states, localities, tribes and territories, with the aim of 100 million vaccinations by the end of Biden's first 100 days
  • $20 billion for veterans' healthcare
  • $10 billion to boost domestic manufacturing of pandemic supplies
  • $4 billion to the Substance Abuse and Mental Health Services Administration (SAMHSA) and the Health Resources and Services Administration (HRSA) to expand access to mental health and substance abuse services
  • $800 million to help survivors of domestic violence
  • the recruitment of 100,000 public health workers to conduct vaccine outreach and contact tracing in the immediate term; in the long run, the roles would transition into community health roles
  • ensure that vaccines and supplies are distributed equitably and expand healthcare services for underserved communities by opening more community health centers and investing in health services on Native American land
  • increase the Federal Medicaid Assistance Program (FMAP) to 100 percent coverage for the administration of vaccines
  • subsidize continuation health coverage (COBRA) for those who lose their employer-sponsored health insurance through Sept. 30, 2021
  • increase the value of the Premium Tax Credit used on individual health insurance exchanges to ensure that individuals pay no more than 8.5 percent of income for health insurance coverage
  • Biden also noted that his administration would work with states to identify priority groups for the vaccines, including those 65 and older and frontline workers; Biden also would use the Federal Emergency Management Agency (FEMA) to create 100 federally supported vaccination centers across the country

The plan does not include additional funding for the Provider Relief Fund or other provider relief proposals. However, those items could still be included in eventual legislation.

Relief to American Workers and Families

The plan also includes efforts to aid workers and families through roughly $1 trillion in policies aimed at economic recovery. These policies, costing roughly $1 trillion, would, according to the Biden campaign's summary, "[build] a bridge to economic recovery for working families and, according to researchers at Columbia University, cut child poverty in half." The American Rescue Plan calls on Congress to:

Establish a Worker Safety Standard and Increase Wages

  • Authorize the Occupational Safety and Health Administration (OSHA) to issue standards that cover a broad set of workers to protect against unsafe working conditions and retaliation, as well as provide additional OSHA funding
  • Increase the national minimum wage from $7.25 per hour to $15 per hour
  • Call on employers to provide back hazard pay to essential frontline workers, including those in the retail and grocery sectors

Extend and Expand Emergency Worker Leave

  • Reinstate changes to the Emergency Family and Medical Leave Expansion Act and Emergency Paid Sick Leave Act created by the Families First Coronavirus Response Act (FFCRA) and expand them to:
    • Apply to all employers instead of only those between 50 to 500 employees
    • Provide over 14 weeks of paid sick and family and medical leave to help parents with additional caregiving responsibilities when a child or loved one's school or care center is closed, for people who have or are caring for others with COVID-19, or who are quarantining with exposure
    • Reimburse employers with fewer than 500 employees, as well as state and local governments, for the cost of leave

Provide Checks to Individuals

  • Provide an additional $1,400 per person in direct financial assistance while also expanding eligibility to adult dependents and mixed-status households, as well as calling on the U.S. Department of the Treasury to deliver the earlier $1,200 direct payments under the CARES Act to families that did not receive them

Extend and Expand Unemployment Insurance

  • Increase supplemental Federal Pandemic Unemployment Compensation (FPUC) payments from $300 per week to $400 per week in unemployment insurance benefits to help laid-off workers cover household expenses
  • Extend the availability of federal unemployment insurance benefits through September 2021
  • Allow for automatic adjustments to the length and amount of relief based on health and economic conditions in order to prevent reliance on legislation to reinstate benefits if economic and health conditions meet certain threshold requirements so that these supports are provided for the full duration of the pandemic (specific triggers are not discussed in the proposal)
  • Extend financial assistance for unemployed workers who typically do not qualify for unemployment compensation benefits (including self-employed and gig economy workers)

Provide Housing Assistance

  • Extend the eviction and foreclosure moratorium and continues applications for forbearance on federally guaranteed mortgages until Sept. 30, 2021, to prevent evictions and loss of homes during the pandemic (the current CDC eviction moratorium is set to expire at the end of January)
  • Provide $30 billion in rental and energy and water assistance for families
    • Includes an additional $25 billion for the Federal Emergency Rental Assistance Program established by the Consolidated Appropriations Act of 2021 to assist renters and small landlords
    • $5 billion to cover home energy and water costs and arrears through programs such as the Low-Income Home Energy Assistance Program (LIHEAP)

Provide Food Aid to Address Hunger

  • An extension of the 15 percent Supplemental Nutrition Assistance Program (SNAP) benefits increase through September 2021
  • $3 billion for the Special Supplemental Nutrition Program for Woman, Infants, and Children (WIC)
  • A partnership with restaurants to get food to families in need and assist laid-off restaurant workers
  • Temporarily cutting the state match for SNAP
  • $1 billion in additional nutrition assistance for Puerto Rico, American Samoa and the Commonwealth of the Northern Mariana Islands

Provide Child Care Support

  • Provide $25 billion for an Emergency Stabilization Fund to help child care providers safely stay open or reopen after the pandemic
  • Provide an additional $15 billion in emergency funds for the Child Care and Development Block Grant (CCDBG)
  • Increase for one year the size of the Child and Dependent Care Tax Credit (CDCTC) as well as making the credit refundable so that lower-income families can access the reimbursement

Provide Tax Relief for Families and Essential Workers

  • Expand temporarily the Earned Income Tax Credit (EITC) for childless workers by increasing the size of the maximum credit, raising the income limit for the credit and expanding the eligible age range from 25-64 to 19-65 (excluding full-time students aged 19-24)
  • Expand temporarily the Child Tax Credit (CTC) to $3,000 per child ($3,600 for children under age 6) for one year while also making it fully refundable to expand access to 27 million children living in households that currently lack enough income to qualify; during this period, children aged 17 would also qualify for the credit
  • Promote cash assistance through Temporary Assistance for Needy Families (TANF) by providing an additional $1 billion in emergency funding for states to meet the needs of increased caseloads

Support to Small Businesses and Governments

With a stated goal to aid small businesses, protect educators, public transit workers and first responders from layoffs, as well as keep critical services running at full strength, the plan proposes $440 billion to support communities through the following proposals:

Support to Small Businesses

  • $15 billion in "flexible, equitably distributed" grants to the hardest-hit small businesses
  • $35 billion in small business financing programs, with the aim of leveraging it into $175 billion in lending and investment
  • Unspecified aid to restaurants, bars and other businesses that have suffered disproportionate harm to ensure they have sufficient support through federal aid programs, including the Commodity Credit Corporation of the U.S. Department of Agriculture

Support for State, Local and Tribal Governments

  • Call on Congress to provide $350 billion in state, local and territorial funding, as well as $3 billion in Economic Development Administration grants
  • $20 billion in relief for hard-hit public transit agencies, to maintain employment and transit routes for essential workers
  • $20 billion in direct funding to tribal governments for protective equipment, clean water, electricity, expanded internet access and other resources to reduce inequities related to COVID-19 transmission, hospitalizations, death and related economic effects

Federal Information Technology

While the bulk of the proposal addresses the effects of the COVID-19 pandemic, it also includes measures to address recent cybersecurity attacks against the U.S. government. President Biden calls on Congress to modernize and secure federal information and technology through the following measures:

  • $9 billion for the Cybersecurity and Information Security Agency (CISA) and General Services Administration (GSA) to launch new programs and complete existing IT modernization projects
  • $200 million for the IT Oversight and Reform fund for the hiring of experts to support the Chief Information Security Officer and U.S. Digital Service
  • $300 million in no-year funding for the GSA to secure IT projects without the need for agency reimbursement
  • $690 million for CISA to increase cybersecurity across federal networks

The Legislative Path Ahead

Several of the COVID-19 relief provisions included in the end-of-year Consolidated Appropriations Act will expire in March 2021. Accordingly, Congress will likely aim to pass another relief bill before those provisions expire.

Given the slim Democratic majorities in Congress and the 60-vote filibuster threshold that will likely continue to be required to pass legislation in the Senate, any legislation will have two paths to becoming law. They will either have to be passed through the Senate's budget reconciliation process (see Holland & Knight's previous alert, "Senate Elections Make Budget Reconciliation a Potential Tool in 117th Congress," Jan. 7, 2021) or create a bill that would receive bipartisan support in the Senate to advance by regular order. Although several Senate Republicans have indicated support for further relief measures, Democrats in the House and Senate have said they would be prepared to use budget reconciliation to bypass a filibuster if needed.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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