On Wednesday, the U.S. House of Representatives passed an amended version of the American Rescue Plan (ARP), paving the way for President Biden to sign his $1.9 trillion COVID relief plan into law. This latest COVID response from Washington, passed along party lines, takes new steps to respond to both the ongoing public health and economic crisis.
In addition to funding vaccine distribution, schools, and state and local governments, the ARP extends key pandemic-era unemployment insurance provisions that were due to expire on March 14th. The ARP also includes dramatic new policies aimed at boosting aid to Americans with the lowest incomes. While $1,400 checks have grabbed the headlines, expansions to the Child Tax Credit and Earned Income Tax Credit have the potential to significantly boost incomes for the lowest-income Americans. Experts estimate that the one-year expansion of the Child Tax Credit could reduce child poverty in the United States by half.
For the affordable housing sector, the American Rescue Plan contains several provisions directly affecting the industry and communities it serves, including more than $25 billion in emergency rental assistance and homelessness prevention funding, nearly $10 billion in homeowner assistance, utility assistance, and funding for other programs. More details on the American Rescue Plan’s housing provisions can be found here. The bill also makes significant changes to small business programs, including the Paycheck Protection Program and the reinstatement of the State Small Business Credit Initiative (SSBCI).
What’s next? As we noted in previous Policy Pulse newsletters and in our Advancing Communities Podcast on the post-election outlook, the results of the runoff elections in Georgia – which gave Democrats control of the U.S. Senate – changed the scale of federal relief efforts and government action from Washington. Democrats passed this bill using a Senate budget procedure called reconciliation, which allowed Senate Democrats to pass the bill with a simple majority instead of the normal 60-vote threshold required by Senate rules. It is possible that Democrats will also pursue legislation later this year around infrastructure and economic recovery using the same process, but already key moderate democrats are pushing for a more bipartisan approach. That would require 60 votes and significant bipartisan buy-in.
This is worth watching because infrastructure legislation could be a vehicle for additional affordable housing and community development resources. In 2020, House Democrats included significant expansions of affordable housing programs as part of their infrastructure plan, as we described last year.