WASHINGTON, DC – In an effort to help struggling families, businesses, and communities recover and to more effectively combat COVID-19, President-elect Joe Biden unveiled a new “American Rescue Plan” to inject $1.9 trillion in federal funding into the U.S. economy to help overcome COVID-19.  The proposal contains several key provisions backed by U.S. Senator Jack Reed (D-RI) to help Rhode Island, including more state and local aid; another round of direct stimulus payments to provide $2,000 to most Rhode Islanders; an expansion of federal unemployment benefits at $400 per week through September; and a major expansion of the child tax credit. 

The American Rescue Plan includes three main planks:

  • $1 trillion in direct emergency relief to U.S. households, including a combination of new cash payments, unemployment assistance, and tax breaks;
  • $440 billion for small businesses and communities hit hard by the pandemic, including $350 billion for states and communities, similar to the Coronavirus Relief Fund that Senator Reed included in the CARES Act; and
  • Over $400 billion to improve COVID-19 response, including vaccine distribution, testing, and investing in America’s health workforce.

“This ambitious rescue package provides targeted relief for essential workers, those out of work, and those who have been impacted by COVID-19.  President-elect Biden made it clear he will be more proactive than the previous president when it comes to protecting public health, combating COVID-19, and getting our economy moving in the right direction.  This is a strong start and a wise investment.  The key question is: Is it aggressive enough to meet the moment and will it be enough to save lives and communities?  Part of that answer will depend on how quickly Congress moves.  There must be bipartisan cooperation to prevent the economy from collapsing.  The health of the American people and our economic future is at stake,” said Senator Reed.

Senator Reed led the successful effort to create the $150 billion Coronavirus Relief Fund (CRF) in the CARES Act (Public Law No. 116-136), and successfully secured a small state minimum of $1.25 billion in the law.  President-elect Biden’s proposal includes $350 billion in federal aid to state and local governments.  Under the proposal, the funds would be distributed through a different formula and it is unclear exactly how much Rhode Island would get.  With Rhode Island facing a projected deficit in the hundreds of millions of dollars, Senator Reed says he is committed to delivering as much federal aid to the state as possible.

“This is a truly national emergency, and states are facing increased COVID-19 costs and declining revenue.  There is an urgent need to provide states and communities with direct federal aid so they can continue delivering essential services and prevent layoffs of essential frontline workers, including police officers, firefighters, teachers, and other public sector employees.  I will continue working to deliver needed funds to better equip Rhode Island and other states to effectively care for our citizens, save our communities, and make it through this crisis,” said Reed, who introduced the State & Local Emergency Stabilization Fund Act (S. 3671) in the last Congress to ensure states, cities, and towns have the funding and flexibility they need to save lives and help communities survive.

Senator Reed has also championed efforts to boost unemployment insurance for Americans who lost their jobs during the pandemic using automatic stabilizers.  In March, Congress enacted the supplemental $600 weekly unemployment insurance payments known as the Federal Pandemic Unemployment Compensation (FPUC) program as part of the CARES Act.  Under the law, out of work Americans who lost their jobs due to the pandemic and are eligible for unemployment insurance received an extra $600 on top of what they normally claim under their state’s benefits.  But the Trump Administration allowed the benefits to lapse over the summer, and Republicans blocked their renewal, even as unemployment rates rose.  In December, Congress approved an extra $300-a-week in federal unemployment for job seekers for ten weeks.  This new proposal would provide an extra $100 per week to $400 and extend the federal aid all the way through September.  It would also seek ways to automatically adjust the length and amount of unemployment relief depending on health and economic conditions.  And it includes language championed by Senator Reed to fully finance state work sharing programs to help prevent layoffs.

“With infections and unemployment rates soaring and hospitals filling up, Americans have waited long enough for needed aid to arrive,” said Reed.  “Voters clearly demanded change and this emergency rescue package will finally offer some much needed relief in the form of direct payments, unemployment insurance, assistance to small businesses, and a major boost for public health and combating COVID-19.”

Other significant elements of the “American Rescue Plan” proposal include:

  • A new round of direct stimulus payments that would provide people a total of $2,000 by authorizing an additional $1,400 per person on top of the $600 payments included in the law that was enacted in December.
  • $170 billion to help schools reopen safely.  The bill provides significant resources to help K-12, colleges, and universities and seeks to ensure a majority of K-8 schools can safely get students and educators back into classrooms with enhanced COVID-19 protocols.
  • $35 billion for rental and utility assistance to help keep people in their homes and assistance to help secure safe housing for those experiencing or at risk of homelessness.  The proposal calls for extensions of eviction and foreclosure moratoriums until September 30, 2021.  This is similar to a $75 billion initiative Reed introduced last year, S. 3620, the Housing Assistance Fund.  Reed helped include $25 billion in rental assistance in the ‘coronabus’ legislation that was recently signed into law and will direct $200 million in rental assistance to Rhode Island.
  • An expansion to the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC).  Senator Reed is a cosponsor of the Working Families Tax Relief Act, which would cut taxes for workers and families by expanding the EITC and CTC.  The EITC and CTC are two of the most effective tools to put money in the pockets of working people and keep children out of poverty.
  • $30 billion investment in the Disaster Relief Fund, to ensure sufficient supplies and protective gear, and to provide 100 percent federal reimbursement for critical emergency response resources to states and local governments, including deployment of the National Guard.  Senator Reed led a letter on this topic to President-elect Biden earlier this week.
  • An extension of the 15 percent Supplemental Nutrition Assistance Program (SNAP) benefit increase. This would maintain the increase through the summer, when childhood hunger spikes due to a lack of school meals.  It also provides $3 billion to help women, infants, and children get the food they need through the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).
  • Funding to hire 100,000 health workers to perform vital tasks like vaccine outreach and contact tracing.  Later, these public health workers can transition into community health roles to help improve long-term public health capacity.

  • To prevent potentially infected people from going to work, it renews emergency paid sick leave provisions that were not extended by the Trump Administration.  Last year, Reed teamed up with Senator Sheldon Whitehouse (D-RI) to introduce the State Paid Leave for America Now (PLAN) Act to reimburse state paid family and medical leave programs for the cost of benefits for circumstances related to COVID-19.