Biden’s USD1.9 trillion to fight virus and economic downturn

President-elect Joe Biden has unveiled a USD1.9 trillion rescue package designed to combat the economic downturn and the Covid-19 crisis. The proposal, called the American Rescue Plan, includes several familiar stimulus measures in the hope the additional fiscal support will sustain US families and businesses until the Covid-19 vaccine is widely available.

The package includes:

• Direct payments of USD1,400 to most Americans, bringing the total relief to USD2,000, including December’s USD600 payments
• Increasing the federal, per-week unemployment benefit to USD400 and extending it through the end of September
• Increasing the federal minimum wage to USD15 per hour
• Extending the eviction and foreclosure moratoriums until the end of September
• USD350 billion in state and local government aid
• USD170 billion for K-12 schools and institutions of higher education
• USD50 billion toward Covid-19 testing
• USD20 billion toward a national vaccine program in partnership with states, localities and tribes
• Making the Child Tax Credit fully refundable for the year and increasing the credit to USD3,000 per child (USD3,600 for a child under age 6)

According to Biden’s senior officials, the plan is the first of two major spending initiatives the president-elect will seek in the first few months of his presidency. Whereas, the second bill, expected in February, will tackle the Biden’s longer-term goals of creating jobs, reforming infrastructure, combating climate change and advancing racial equity.

In a speech to the nation, Biden said that during this pandemic, millions of Americans, through no fault of their own, have lost the dignity and respect that comes with a job and a paycheck.

Biden acknowledged the ambition and the cost of his plan, but he stressed that the bold investments will pay dividends for the nation.

“There is real pain overwhelming the real economy.” He acknowledged the high price tag but said the nation could not afford to do anything less. “The very health of our nation is at stake,” the president-elect said, adding that it “does not come cheaply, but failure to do so will cost us dearly.”

Biden’s speech to the nation came at an incredibly challenging moment, as virus cases continue to climb, millions of workers remain sidelined and America’s partisan divisions are threatening to tear it apart.

However, Biden’s officials are optimistic that the current rescue package has enough in it to make it palatable to lawmakers across the political spectrum and henceforth, the president-elect has been consulting congressional allies in recent weeks on the best path toward approval.

According to most economists, including Federal Reserve Chairman Jerome Powell, additional Covid-19 relief funding and economic stimulus may be needed to help businesses stay afloat until the broader population has access to vaccines.

The virus had killed more than 384,000 Americans, according to data from Johns Hopkins University.

In a report by the Labor Department, 1.15 million Americans filed new unemployment claims in the first full week of 2021. Another 284,000 claims were filed for Pandemic Unemployment Assistance, an emergency federal program for workers like freelancers who do not normally qualify for jobless benefits. The nation shed 140,000 jobs in December, the department also reported.