Author Archives: Zane Lowe

$1.9 Trillion American Rescue Plan

On March 11, this year, President Biden signed the American Rescue Plan, a $1.9 trillion COVID relief bill. The Biden Administration’s primary ambition was to restabilize the economy. The nation is on the verge of emerging again to normalcy as vaccines roll out and COVID deaths drop.

But Americans across the U.S. are still under strain from the lasting effects of COVID’s hit on the economy. According to CNBC, over 20 million people are on some form of assistance for unemployment benefits. The bill features several aspects aiming to reallocate direct funds to businesses and people. One of the most expensive parts of the bill is the payments of up to $1,400 to almost every American citizen, as most are undergoing financial strain.

Caroline Huntsman, a local resident and employed in the bay, says, “I’ve had a job almost all of my life. I’ve waited tables, worked the bar, been a cashier, but once I lost my position from the pandemic. I struggled with money and spent most of my savings to stay afloat. It has been so tough to find work and now reliable hours are hard to come by.” Ms. Huntsman also said she “is fortunate to have a job … but I can feel myself slipping under still and into more debt as things pick back up slowly,”.

With millions of households struggling to afford food and housing, Democrats say the bill will decrease family and child poverty. It will send more than $120 billion to K-12 schools across the nation.

They are also increasing the maximum Supplemental Nutrition Assistance Program by 15% through September. While nearly $30 billion will go toward restaurants seeking aid, expanding tax credits will help businesses keep employees on the payroll as well. The legislation will also boost provisions to make health care more affordable.

“This historic legislation is about rebuilding the backbone of this country,” Biden said to CNBC before signing the legislation. “And giving people in this nation, working people, middle-class folks, the people who built this country, a fighting chance.

The Bill includes a full $1,400 check for adults who earned $75,000 or less, married couples who earned $150,000 or less, and heads of household who earned $112,500 or less.

People eligible for a reduced check are adults who earned between $75,000 and $80,000, married couples who earned between $150,000 and $160,000, and heads of household who earned between $112,500 and $120,000.

Adults who earned more than $80,000, married couples who earned more than $160,000, and heads of households who earned more than $120,00 are ineligible.

The Democrats were able to pass the relief bill through reconciliation. Usually, a simple majority of 60 votes are needed to pass legislation and hurdle the filibuster. But the Senate is split 50-50, Republican to Democrat caucus members, requiring Vice President Kamala Harris to vote and disappointing Republican Senate members as they felt bypassed during what they thought would be a bipartisan bill.

Sen. Mitt Romney (R) Utah told reporters inside the Capitol, “If some Republican amendments got into the bill, some of his colleagues may support it … But my guess is it’s not likely that many of our amendments will get any Democrat support, so I think it’s very unlikely that any Republicans will support the final bill.”

Since the campaign trail, the Biden Administration has been promoting their “reach across the aisle” mantra. But major Senate members have critiqued the Democrat’s ability and willingness to meet them with closer compromises.

Rumors from the Capitol say Democrats are not “picking up their phone calls,” As both Senate Republicans’ infrastructure projects were dropped from the relief bill following deliberations with key Senate officials.

Pelosi spokesperson Drew Hammill said, “the bill’s funding for an expansion of the BART, a subway system serving the San Francisco Bay Area, was struck from the bill because it was “part of a pilot project.”

Despite the omissions from Democrats, the Republicans from the Senate feel the bill features many infrastructure and economic breaks. The tax credit is one piece Republicans saw as not relevant to COVID relief.

Sen. Marco Rubio (R) Florida said the Democrats’ proposal would turn the credit into “welfare,” adding the benefit should be tied to employment. Rubio, and some other Republican senators, have proposed their own changes to the child tax credit and stand against the permanent expansion of the credit.

In the same aisle, Republicans plead the relief bill, although passed, is unnecessary as the economy begins to rise on its own as people get back out and businesses open back up.

“They want to send wheelbarrows of cash to state and local bureaucrats to bail out mismanagement from before the pandemic,” Senate Minority Leader Mitch McConnell, (R) Kentucky told CNN. “They’re changing the previous bipartisan funding formula in ways that will especially bias the money toward big blue states.”

Republicans believe the revenue decline to be from a history of budget mismanagement. There is also the truth that blue states have higher unemployment and steep revenue losses from policies to shut down businesses during the pandemic. Marissa Payne of The Gazette analyzed the claim of a bailout for blue states, and blue states do benefit more when all dollars are added up.

According to the review from the Tax Foundation, a think tank in Washington D.C. studying Federal and State tax policy, $121.4 billion are being allocated to the state legislature and the governor’s seat of 23 Republican-run states. $130.1 billion will be allocated to 15 Democratic-run states, including D.C. The last 11 states with split control will receive $6.4 billion.

If Reevaluated for population, the analysis shows blue states would get more aid in the amount of $1,278 per capita. While on average red states receive $1,017 per capita, and split states receive $1,041.

In 2020 10 blue states, including D.C. and 13 red states, as well as four split states, all lost revenue in the fight to handle COVID. What hasn’t been said is the bill would send aid to all states, whether or not they lost revenue.

But the “formula for allocating funding takes into account each state’s share of the nation’s unemployed workers. The average unemployment rate is 5.03 percent for red states, 7.61 percent for blue states and Washington and 6.09 percent for split states, according to Bureau of Labor Statistics data.”

When Marissa Payne, a fact-checker for the Gazette, was asked in blunt terms if this was a bailout for blue states once the data is put through the formula?

She said, “On average, these (blue) governments lost less revenue but have higher unemployment rates, and do benefit the most on many accounts.”

She did leave the caveat that “these (blue) states encompass the nation’s largest and most populous cities, like Los Angeles, New York, and Chicago, where there is typically a much higher cost of living than in rural areas. Urban counties are also more racially and ethnically diverse, and the Centers for Disease Control and Prevention acknowledges minorities are more likely to contract COVID-19 and die from it.”