President BidenJoe BidenCapitol fencing starts coming down after 'Justice for J6' rally Senate parliamentarian nixes Democrats' immigration plan Biden pushes back at Democrats on taxes MORE is on the precipice of the biggest legislative win so far in his time in office: the signing of a $1.9 trillion COVID-19 relief package the House is expected to approve Wednesday.
The package is highlighted by the $1,400 direct payments to be sent to millions of households, an extension of unemployment benefits and funding for vaccine distribution.
But it includes much more than those provisions. Here’s a look at what else is in the bill.
Child tax credit
The bill would expand the child tax credit in 2021, a move that Democratic lawmakers and economists say could substantially reduce child poverty. Democrats are hoping to make the expansion permanent in future legislation.
The measure would increase from $2,000 to $3,600 the credit for children under 6 years old, and to $3,000 for older children. The additional amount would phase out for individuals with income above $75,000, head-of-household filers with income above $112,500 and $150,000 for married couples filing jointly.
The bill would also make the credit fully refundable, in an effort to ensure that the lowest-income households receive the full amount of the credit. It would make 17-year-olds eligible for the credit.
The IRS is directed to make periodic advance payments of the credit, so that households could receive the credit in installments throughout the year instead of having to wait to file their taxes to receive all the money.
Earned income tax credit
The bill would expand in 2021 the earned income tax credit (EITC), which benefits low- to moderate-income households.
It would expand the eligibility and amount of the credit for workers without children and allow married but separated spouses to claim the EITC on separate returns in certain circumstances. It also would allow taxpayers to use their 2019 income for purposes of the credit instead of their 2021 income, which could help people who have lost income due to the pandemic receive larger credit amounts for 2021.
Both the portions of the bill on the earned income tax credit and the child tax credit would direct the Treasury Department to make payments to U.S. territories to help reimburse the cost of the credits in those jurisdictions.
The bill would provide about $15 billion to the child care and development block grant program, which provides grants to states to help low-income families afford child care. States would be able to use the funds to help essential workers regardless of those workers’ income. The measure also would provide about $24 billion for states to provide grants to child care providers.
Additionally, the bill would expand in 2021 the child and dependent care tax credit and would increase the amount of a tax exemption for employer-provided dependent care assistance.
The bill includes an $86 billion bailout to union pensions, which has been heavily criticized by Republicans. To pay for the move, Democrats had to shave a month off additional weekly unemployment supplements, which nearly derailed the process for passing the bill.
The $86 billion will cover multi-employer pension funds, some of which are set to be insolvent.
Democrats say the pandemic made the situation worse, and without action retirees would be robbed of benefits.
The bill contains $30 billion to bolster local subway and bus systems, which have seen their revenues collapse with people working from home. Ridership plummeted 79 percent in 2020, according to the American Public Transportation Association
That’s double the amount included in a December law passed under former President TrumpDonald TrumpCapitol fencing starts coming down after 'Justice for J6' rally Netanyahu suggests Biden fell asleep in meeting with Israeli PM Aides try to keep Biden away from unscripted events or long interviews, book claims MORE, though less than the $39.5 billion shortfall the American Public Transportation Association estimates public transit authorities face. The funds are expected to prevent layoffs and allow agencies to work on upgrades.
The bill also includes $8 billion for airports, $1.5 billion for furloughed Amtrak workers, and $3 billion for wages at aerospace companies.
The rescue plan provides $27.4 billion in emergency rental assistance for eligible people, which housing advocates say will help stave off evictions. Another $10 billion is set aside to help homeowners avoid foreclosure. The bill gives $5 billion in vouchers for public housing, another $5 billion to tackle homelessness and $5 billion more to help cover utility bills.
The National Low Income Housing Coalition estimates that between 30 million and 40 million American renters are at risk of losing their homes due to the pandemic without support.
The American Rescue Plan broadens eligibility guidelines for the Paycheck Protection Program, allowing more nonprofit entities to be eligible. It tops off the program’s funds and adds $15 billion in emergency grants.
It also sets aside more than $28 billion in funding for restaurants, which have been particularly hard hit by the pandemic, with an emphasis on those owned and operated by women, veterans and minorities.
The legislation aims to meet Biden’s goal of building on the existing health insurance law to expand coverage. It increases ObamaCare subsidies through 2022 to make them more generous, a longtime goal for Democrats.
It will allow individuals earning up to 150 percent of the federal poverty level to purchase an insurance plan with premiums fully subsidized by the federal government. Enrollees would have to pay no more than 8.5 percent of their income in health insurance premiums.
The bill also makes tax credits available for middle-class families for the first time. People making more than 400 percent of the poverty level, or about $100,000 for a family of four, would qualify for assistance.
This demographic consists of many self employed workers and small-business owners, who did not benefit from ObamaCare but were hit with high premiums. Republicans often cited these people as examples when talking about the harms of the law in their efforts to repeal it.
The legislation includes a carrot for the 12 red states that have so far refused to accept federal funds to expand Medicaid. As part of the bill, the holdout states would actually make more money if they choose to expand.
ObamaCare gives states the option to expand Medicaid to people earning up to 138 percent of poverty, and the federal government will pay 90 percent of the costs of doing so. Under the legislation, newly expanding states would also receive a 5 percent bump for their traditional Medicaid programs for two years.
New federal funds under that 5 percent bump are more than two times larger than new state expansion costs. According to estimates from the Kaiser Family Foundation, if Texas accepted the expansion, it would have $3 billion in new costs but get $5 billion in increased federal funds. The state would be able to cover 878,000 new people.
Despite the free money, it is unlikely that conservative governors will choose to expand Medicaid.