Spending $1.9 Trillion to Rescue America

American Rescue Plan Reflects Biden’s Priorities

By Sarah Williams, Ashley Louie, Prathito Wisambodhi, Yanchao Li

The American Rescue Plan Act of 2021 (ARP) targets the Biden Administration’s interest in helping small businesses, providing for education, and focusing on individuals’ wellbeing, in addition to providing support for those hardest hit by the pandemic. The ARP is a $1.9 trillion stimulus package to offer financial relief during the health and economic crisis caused by the coronavirus (COVID-19) pandemic providing additional assistance following the $4 billion in COVID-19 stimulus in 2020.

Click to explore how the American Rescue Plan allocated $1.9 trillion, which also roughly compares to the GDP of Canada.¹

Explore American Rescue Plan Act 2021. Data compiled by Holland & Knight and the Civic Data Design Lab. Note: This visualization illustrates the summarized provisions of the American Rescue Plan Act of 2021; however, $17.8 billion (of $1.9 trillion total) remain uncategorized in these estimates.

According to the White House,² small businesses are a priority during Biden’s first term and this is reflected in the ARP. Local restaurants that have been hard hit by the pandemic can apply for a grant of up to $10 million. This funding is especially important to small businesses struggling to stay open by making rent or mortgage payments, keeping up with operations costs, or paying off debt accumulated over the pandemic. Funds are distributed through state and local government aid, tax changes, and other provisions across multiple categories.

Distribution of funding for assistance in the ARP

Additionally, a significant amount of funding benefits is directed towards public welfare, such as education and healthcare. These provisions are instrumental to reopening school, getting the country out of the public health crisis, and revitalizing the economy. The funding provided in the ARP hints at the Biden Administration’s agenda for improving education as reflected by over $100 billion allocated for public school modernization in the American Jobs Plan.³

Distribution of funding for public welfare in the ARP

Congressional debate on the plan focused on getting money directly to individuals as fast as possible.⁴ This urgency is reflected in the fact that over half of the spending goes towards tax relief and unemployment provisions. The GOP questions whether these unemployment provisions contest progress for small businesses, claiming that small businesses trying to reopen are now struggling to find employees and can’t compete with unemployment benefits. The ARP’s unemployment aid provides $300 per week in addition to regular state unemployment benefits, suggesting that the average recipient earns higher than $15 per hour.⁵

Distribution of funding for tax and unemployment benefits

State and local governments have a lot of discretion on how their funds can be distributed within federal guidelines. For example, Ohio proposed to use some of the funds to sponsor the ‘Vax-a-Million’ lottery,⁶ a vaccine promotion in which 5 residents who have received at least one dose are eligible to win $1 million. Beyond Ohio, several leaders across the political spectrum have also proposed cash incentives for COVID-19 vaccination; however, payment for vaccination may be problematic and an ineffective use of public funds.⁷ Payment as an incentive may not be enough to overcome vaccine hesitancy, and ethically misconstrues the moral duty to contribute to promote personal and public health with herd immunity, while cash incentives could potentially also be seen as an unfair use of funding when some individuals and families are struggling with food and housing insecurity. A week after the Governor’s announcement, the vaccination rate in Ohio has increased by more than 28 percent.⁸

Many provisions included in the American Rescue Plan Act of 2021 reflect the Biden Administration’s agenda and have been reinforced through the more recent American Jobs Plan — prioritize funding for small businesses, infrastructure, and public welfare.

Special thanks to Holland & Knight for the summary of provisions and data verification.

References

1. International Monetary Funds. World Economic Outlook Database. April 2021 https://www.imf.org/-/media/Files/Publications/WEO/WEO-Database/2021/WEOApr2021all.ashx
2. The White House. Biden-Harris Administration Announces American Rescue Plan Funding to Rescue the Child Care Industry so the Economy Can Recover [Fact sheet]. April 15, 2021.
   https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/15/fact-sheet-biden-harris-administration-announces-american-rescue-plan-funding-to-rescue-the-child-care-industry-so-the-economy-can-recover/
3. The White House. The American Jobs Plan [Fact sheet]. March 31, 2021. https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/31/fact-sheet-the-american-jobs-plan/
4. Wu, Nicholas. Savannah Behrmann, Joey Garrison. “Live updates: President Joe Biden hails ‘historic’ COVID-19 relief package, will sign it Friday.” USA Today, March 10, 2021. https://www.usatoday.com/story/news/politics/2021/03/10/covid-stimulus-updates-house-verge-passing-joe-bidens-bill/6924862002/
5. Thomas, Ken and Kate Davidson. “Biden Disputes Argument That Enhanced Unemployment Benefits Are Hampering Economy.” The Wall Street Journal, May 10, 2021.
   https://www.wsj.com/articles/biden-disputes-argument-that-enhanced-unemployment-benefits-are-hampering-economy-11620677375
6. Vigdor, Neil and Azi Paybarah. “Ohio Lottery to Give 5 People $1 Million Each to Encourage Vaccination.” New York Times, May 12, 2021. https://www.nytimes.com/2021/05/12/us/ohio-lottery-coronavirus-vaccine.html
7. Largent, Emily A., Franklin G. Miller. “Problems With Paying People to Be Vaccinated Against COVID-19.” JAMA. 2021;325(6):534–535. doi:10.1001/jama.2020.27121, January 6, 2021. https://jamanetwork.com/journals/jama/fullarticle/2775005
8. Bowers, Jennifer. “Ohio Vax-a-million: 1 million entries, vaccination rates up 28%.” WCMH, May 20, 2021.
   https://www.nbc4i.com/news/local-news/ohio-vax-a-million-1-million-entries-so-far-dewine-says/

Data Sources

1. Armstrong, Christopher J., Joel E. Roberson, Nicole M. Elliott, Kara M. Ward, Miranda A. Franco, Leslie I. Pollner, Eve Maldonado O’Toole, Lauri A. Hettinger, Lisa Ann Barkovic, Kayla Gebeck Carroll, Ethan Jorgensen-Earp, Suzanne Michelle Joy, Jodi A. Richardson, Jenny Busby, Hannah M. Coulter. “American Rescue Plan Act of 2021: Summary.” Holland & Knight Alert. https://www.hklaw.com/en/insights/publications/2021/03/american-rescue-plan-act-of-2021-summary
2. Committee for a Responsible Federal Budget. “What’s in the $1.9 Trillion House COVID Relief Bill?” https://www.crfb.org/blogs/whats-19-trillion-house-covid-relief-bill