On January 14, 2021, President-elect Joe Biden released his $1.9 trillion emergency stimulus plan, designed primarily to guide the country through the next medical and economic stages of the COVID-19 pandemic. The American Rescue Plan (“ARP”) also includes non-COVID-19 related proposals, such as a mandatory $15 per hour minimum wage and funding to improve cybersecurity.
The following is a non-comprehensive overview of the ARP, which will require Congressional legislative passage.
Checks to Individuals
The ARP would increase to $2,000 the total direct financial assistance to individuals. In December 2020, Congress authorized a one-time stimulus payment of $600 to eligible households. This proposal would add $1,400 more, and would prioritize the issuance of checks to households that have not yet received their first payment.
Expanded Paid FFCRA Leave
Biden’s plan asks Congress to greatly expand and extend COVID-19-related paid leave, which had been provided for under the Families First Coronavirus Response Act (“FFCRA”). The FFCRA leave benefits expired on December 31, 2021, although covered employers may voluntarily extend them through March 2021 for eligible employees. The ARP would further extend the paid leave benefit to September 31, 2021 and would require all employers to offer FFCRA leave. The proposal would mandate that employers provide up to 14 weeks of paid sick and family and medical leave, and would apply to an expanded list of parental caregiving situations. In addition, it would allow employee use of paid leave to get the COVID-19 vaccination. Of note, the ARP would extend FFCRA’s refundable tax credit only to employers with fewer than 500 employees.
Supplemental Unemployment Compensation
The ARP would continue and expand the CARES Act unemployment compensation (“UC”) benefits through September 2021 and extend eligibility, including for gig economy workers and independent contractors. The proposal would add an extra $400 weekly supplemental payment to cover expenses. Opponents of additional UC benefits have argued that such supplemental payments are counter-productive as they provide a disincentive for recipients to return to work because they receive more compensation by not working.
New OSHA Standard
Biden has also announced that he will ask Congress to authorize the Occupational Safety and Health Administration (“OSHA”) to issue a COVID-19 Protection Standard that “covers a broad set of workers, so that workers not typically covered by OSHA, like many public workers on the frontlines, also receive protection from unsafe working conditions and retaliation.” To date, OSHA has resisted establishing a national COVID-19 safety standard, opting instead to let the states take the lead, as they deem warranted. A number of states, including California and Virginia, have mandated such workplace COVID-19 safety rules. A federal standard has been a goal of organized labor.
The ARP also calls for additional funding for enforcement, including for violations of OSHA’s anti-retaliation mandate. While unclear in its scope at this writing, many businesses are concerned that such a standard, along with increased funding, would lead to significant workplace litigation as employees return to the workplace in 2021.
The ARP proposes mounting a $20 billion “national vaccination program.” In addition to elements in the proposed legislation, President-elect Biden further explained his five-point plan to expedite and focus vaccinations:
- Open vaccine eligibility to more priority groups, such as adults 65 and older, and other essential workers, such as grocery workers and teachers;
- Establish more vaccination sites, using the Federal Emergency Management Agency (“FEMA”) to establish centers by the end of February;
- Increase the vaccine supply and continue the use of commercial pharmacies to administer vaccines;
- Hire a vaccination workforce; and
- Launch a large-scale public education campaign to encourage vaccination.
Biden’s plan proposes an investment of $50 billion in “a massive expansion of testing, providing funds for the purchase of rapid tests, investments to expand lab capacity, and support to help schools and local governments implement regular testing protocols.”
Research and Development
The ARP also seeks funds for identifying new strains of the virus and for developing more effective treatments.
Public Health Jobs Program
The ARP proposes the hiring of 100,000 public health workers to support such initiatives as community vaccination outreach and contract tracing, and then to transition to more permanent positions to improve the quality of health care services, particularly for low-income and underserved communities.
Greater Use of Defense Production Act
The President-elect promises that he will “fully use” the Defense Production Act to provide “emergency relief,” purchase needed supplies, and deploy National Guard to assist states and localities as warranted.
Eviction Moratorium, SNAP Expansion and WIC
The ARP would extend the federal eviction moratorium, which is set to expire on January 31, 2021, to September 30 2021, and would provide financial assistance to renters and to secure housing for the homeless. The proposal also seeks funds for attorney’s fees on behalf of individuals facing eviction for non-payment of rent.
The benefits for the Supplemental Nutrition Assistance Program (“SNAP”) would be increased by 15 percent through September 2021, with possible automatic increases and adjustments after that. The ARP also proposes more funding for the Special Supplemental Nutrition Program for Women, Infants, and Children (“WIC”).
Expanded Health Coverage
Biden is calling on Congress to subsidize continuation health coverage (COBRA) through September 30, 2021 and to “expand and increase the value of the Premium Tax Credit to lower or eliminate health insurance premiums and ensure enrollees - including those who never had coverage through their jobs - will not pay more than 8.5 percent of their income for coverage.” The ARP also seeks increased funding to ensure adequate access to behavioral health services.
Increased Minimum Wage
In addition to the provisions discussed above, like previous pandemic-related legislation, the ARP contains measures tangentially related to COVID-19, such as funding to modernize federal information technology “to protect against future cyber-attacks.” Most significantly, the proposal mandates a national $15 per hour minimum wage (with elimination of the tipped minimum wage and the sub-minimum wage for persons with disabilities).
Opponents have criticized the minimum wage proposal as being an especially dull tool for bringing back workers in all settings, and in particular, industries such as restaurants, which are struggling to pay their wait staff as it is.
Other Provisions of the ARP
Among the numerous other measures in the ARP, President-elect Biden proposes to:
- Grant approximately $440 billion in “critical support to struggling communities,” including small businesses, Tribal governments, public transit, and essential workers, which would:
- give assistance to “more than 1 million of the hardest hit small businesses,” and
- “[l]everage $35 billion in government funds into $175 billion in additional small business lending and investment;”
- Provide $130 billion to help schools safely reopen;
- Expand the Higher Education Emergency Relief Fund;
- Expand financial assistance to both childcare providers and families, including by:
- providing a fully refundable Child Tax Credit for one year, and
- expanding the Earned Income Tax Credit for one year;
- Provide another $1 billion for states for Temporary Assistance to Needy Families (“TANF”) recipients.
Prospects for Enactment
President-elect Biden’s COVID-19 American Rescue Plan is the opening salvo in a COVID-19 relief debate that may well consume Congress over the next several months, even though the Democrats control both houses. The non-COVID-19 provisions are likely to face particular scrutiny.
Many elements of the ARP are evolving, and we will update this initial analysis as developments warrant.
- Board of Directors / Member of the Firm