American Rescue Plan Passes in March
On March 12, 2021, President Biden signed the American Rescue Plan into law. This $1.9 trillion stimulus package was designed to provide relief for the economic and health effects to the ongoing coronavirus pandemic.
Some key inclusions in the package are:
-Direct financial payments of $1,400 to people making $75,000 or less annually
-Federal unemployment benefits extended through September 2021
-Pandemic Unemployment Assistance benefits extended through September 2021
-100% subsidy of COBRA health insurance premiums
-Eviction and foreclosure moratoriums were not extended but additional funding provided for assistance on mortgage, rent, and utilities
-Increases in SNAP benefits and WIC extended
-Increases Child Tax Credit maximum
-$130 billion for K-12 education; $40 billion for colleges and universities
-$25 billion in pandemic assistance grants for restaurants and bars
-$7.25 billion for the Paycheck Protection Program
-$50 billion for additional COVID-19 testing and contact tracing
-$16 billion to fund vaccine distribution and supply chains
-$46 billion to expand Covid-19 testing and invest to expand lab capacity
-$350 billion in aid to states, cities, tribal governments, and US territories.
Closer to a Biden Budget
President Biden has said he will release his discretionary funding request (a “skinny budget”) next week so that lawmakers may get started on the annual spending bills for Fiscal Year 2022. This is not the complete budget, which will be released later in the spring. This request will include a breakdown of proposed funding levels for each agency and outline particular investments in areas such as clean energy, education, and public health.
The President’s budget released later in spring will include his full agenda of investments and tax reforms. President Biden is expected to keep defense spending relatively flat.
Where We Are on the Earmark Revival
In late February 2021, House Appropriations Committee Chair Rosa DeLauro announced that the House will accept Member requests for Community Project Funding (CPF) in appropriations bills for the FY2022 cycle.
Earmarks are not returning as their old selves, however. The House Appropriations Committee will enforce reforms built upon existing House Rules to “prioritize accountability, transparency, and strong community support.”
Reforms include:
-Members are required to post every CPF request online.
-List of projects funded will be released to the public the same day as subcommittee markup
-Members may have no familial or immediate financial interest
-Ban on for-profit recipients
-No more than 1 percent of discretionary spending may be spent on CPFs
-The Committee will accept only 10 CPF requests from each member, and not all will be funded
-Mandatory auditing by the Government Accountability Office (GAO)
-Members must provide evidence of community support for project.
On March 18, House Republicans voted to join Democrats in ending the earmark ban. Republicans ended the practice first in 2011 due to concerns that earmarks were wasteful spending.
Senate Republicans are far more split. Senate Minority Leader Mitch McConnell called it “very unpopular among Republicans.” Senate Appropriations Committee Chairman Patrick Leahy (D) indicated he was interested in resuming the practice with or without Republicans – though he is in talks with Sen. Richard Shelby, the top Republican on the Appropriations Committee, on how it would work. Some Republicans, including Sen. Susan Collins, have expressed being open to allowing them back with caveats.
Defense Secretary Austin Releases Memo on Department Priorities
On March 4, 2021, Secretary of Defense Lloyd Austin released a memorandum for all Department of Defense employees on his priorities for the Department’s efforts which include:
-Defeating Covid-19
-Prioritizing China as the pacing challenge
-Address advanced and persistent threats from Russia, Iran, and North Korea and disrupt threats from violent extremist organizations such as those operating in the Middle East, Africa, and South and Central Asia
-Innovate and modernize the DoD, divesting legacy systems that no longer meet security needs and investing for the future
-Tackling the climate crisis
-Build more opportunities for growth and development in the DoD
-Ensure accountable leadership, particularly for intolerance for sexual assault, sexual harassment, and extremism
-Join forces with our allies and partners, work in partnerships within our nation, and build unity within the DoD
Biden’s Infrastructure Reveal
After the American Rescue Plan was passed, attention quickly moved to discussion of a major infrastructure bill. On March 31, in Pittsburgh, President Biden is set to roll out his infrastructure plan.
The plan is likely to be as much as $3 trillion and focus on transportation – roads, bridges, rails, transit – and other physical infrastructure like housing. The administration has currently kept their plan broad on how to pay for the spending, including through tax increases for the wealthy and corporations and borrowing.
The infrastructure bill won’t be uncontroversial. President Biden is expected to invoke green energy investments for the fight against climate change, which is likely to bring criticism from Republicans who believe the bill should solely focus on roads and bridges. The speech on Wednesday is expected to solely focus on physical infrastructure, though the overall package is expected to include provisions such as tax changes, manufacturing on-shore incentives, and ‘Social Infrastructure’ proposals.
