Senate Passes $1.9 Trillion Stimulus Plan

The Senate voted 50-49 to pass the American Rescue Plan Act, H.R. 1319 (the “Senate bill”), a $1.9 trillion stimulus plan, on Saturday, March 6th. The Senate bill will be sent back to the House of Representatives because the Senate changed the legislation originally approved by the House. If it passes the House without changes, the legislation would then be sent to President Joe Biden’s desk to be signed into law before unemployment programs expire.[1] The vote is expected to succeed on a party line, as it did in the Senate, with a narrow Democratic majority.[2]

The Senate bill would provide $1,400 stimulus payments for most taxpayers, $300 weekly federal jobless aid through early September, fund vaccine distribution and testing, expand the child tax credit, increase subsidies for the Affordable Care Act, and allocate funding for state and local governments.

The $1,400 stimulus payments would hit recipients’ bank accounts within days of President Biden signing the bill. The payments will go first to those whose bank information is on file with the IRS because it would be directly deposited into their accounts. Others may receive paper checks or prepaid debit cards in the mail.[3]

The bill limits the number of people receiving direct payments relative to the House plan by capping them at $80,000 in income for individuals and $160,000 for joint filers.[4] Individuals earning less than $75,000 and couples earning less than $150,000 would receive the full $1400 payment, plus an additional $1,400 per dependent. The third round of checks, however, would phase out faster than earlier payments. Payments would reach about 90% of families, according to an estimate from the Penn Wharton Budget Model.[5]

The Senate bill provides $300 a week in federal unemployment benefits through September 6 and makes the first $10,200 in unemployment benefits tax-free in 2020 for households making less than $150,000 per year.[6] Biden had proposed bumping up that supplemental benefit to $400 per week, which the House agreed to, but the Senate kept it at $300 weekly.[7]

The child tax credit would become more generous under the Senate bill. For 2021, It would temporarily expand the child tax credit, which is currently worth up to $2,000 per child under 17. The tax credit would be as much as $3,600 for children up to age 5 and as much as $3,000 for children 6 to 17. The Senate bill would also expand the child and dependent care tax credit for 2021, and it would expand the earned-income tax credit for workers without children for this year as well.[8]

The Senate bill provides money to fight the pandemic and to help state, local governments and schools. It would provide funding for vaccine distribution as well as coronavirus testing, contact tracing and genomic sequencing. It would provide $350 billion for states, local governments, territories and tribal governments, and it contains about $130 billion for schools. It also includes funding for colleges and universities, transit agencies, housing aid, childcare providers and food assistance. In addition, the Senate bill contains funding to help businesses, including restaurants and live venues, and it includes a bailout for multiemployer pension plans that are financially troubled.[9]

The Senate bill would temporarily increase subsidies for people purchasing health insurance through the Affordable Care Act’s marketplaces. It includes billions of dollars for public health programs and veterans’ health care. It also would help those who have lost jobs keep the health insurance coverage they had through their employer, covering the full cost of premiums with COBRA through September.[10]

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[1] Tysiac, Ken and Nevius, Alistair, Senate passes amended $1.9 trillion COVID-19 stimulus bill, Journal of Accountancy, March 6, 2021, https://www.journalofaccountancy.com/news/2021/mar/senate-passes-coronavirus-stimulus-bill-recovery-rebates.html.

2 Lobosco, Katie and Luhby, Tami, What happens next with the Covid relief bill (and when you could see another stimulus check), CNN, March 7, 2021, https://www.cnn.com/2021/03/07/politics/when-third-stimulus-check-covid-relief-bill/index.html.

3 Lobosco and Luhby.

4 Pramuk, Jacob, House prepares to pass $1.9 trillion Covid relief bill, and Biden is expected to sign it this week, CNBC, March 8, 2021, https://www.cnbc.com/2021/03/08/stimulus-update-house-plans-to-pass-biden-covid-relief-bill-tuesday.html.

5 Lobosco and Luhby.

6 Tysiac and Nevius.

7 Kaplan, Thomas, What’s in the Stimulus Bill? A Guide to Where the $1.9 Trillion is Going, NY Times, March 7, 2021, https://www.nytimes.com/2021/03/07/us/politics/whats-in-the-stimulus-bill.html.

8 Kaplan.

9 Kaplan.

[1]0 Kaplan.

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