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Public Policy Newsletter Article

Covid-19 Relief Package Signed Into Law

  • 2021-03-25T15:00:00.000+0000
  • Author: Laure Fabrega

On March 11, President Joe Biden signed H.R. 1319, the American Rescue Plan Act of 2021, the $1.9 trillion covid-19 relief package, into law. The House approved the package on February 27 by a 219-212 vote and on March 10 by a 220-211 vote. The House had to vote on the package a second time after the Senate passed an amended version 50-49 along party lines on March 6. The bill passed under the budget reconciliation process, which allows for a simple majority in the Senate instead of 60 votes.

The bill provides additional funding to federal agencies, state and local governments, schools, mass transit systems, restaurants, and other businesses. It increases funding and expands eligibility for the Paycheck Protection Program (PPP), and allows forgiveness for additional expenses. It also provides another round of direct payments ($1,400 for individuals, $2,800 for joint filers, and $1,400 for each qualifying dependent) and expands tax credits for families and for employers who offer paid leave.

Funding for the Health and Human Services Department (HHS) to respond to the pandemic includes: $47.8 billion for testing and tracing activities; $8.5 billion for vaccine activities at the Centers for Disease Control and Prevention (CDC); $7.66 billion to expand the public health workforce, including grants to state, local, and territorial health departments; $6.05 billion to support manufacturing and purchasing of vaccines; $1.75 billion for genomic sequencing and surveillance; and $500 million for the Food and Drug Administration (FDA) to review covid-19 vaccines and therapeutics, among others.

The measure also provides $10 billion to use the Defense Production Act (DPA) to purchase, produce, and distribute medical supplies, drugs, and vaccines to diagnose, treat or prevent Covid-19. It ends, in 2024, a cap on the rebates that drug companies provide to Medicaid, which is currently limited to 100 percent of the average manufacturer price. The bill also expands subsidies to purchase health insurance under the Affordable Care Act (ACA) for two years, and temporarily increases Medicaid funding to states that expand their programs.

The bill, as most recently passed in the House, includes Senate Majority Chuck Schumer’s substitute amendment and additional amendments adopted during the Senate “vote-a-rama” process. The most notorious change was the elimination of a provision that would have increased the federal minimum wage to $15, which was found not germane by the Senate parliamentarian. Senate changes also included extending pandemic unemployment programs through September 6 (instead of August 29), reducing the additional weekly benefit to $300 (from $400), making the first $10,200 in unemployment benefits tax free for certain taxpayers, increasing COBRA subsidies, and more funding for health-care providers, among others.