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What the $1.9 Trillion American Rescue Plan Means for Californians

Quinci LeGardye, California Black Media

Last Friday, President Joe Biden signed the latest round of federal COVID-19 relief, the $1.9 trillion American Rescue Plan, into law. 

The broad scope of this stimulus package covers a wider range of national and state priorities as compared to previous federal government relief efforts. This one is aims to both prepare the country logistically to emerge from the pandemic and to recover from the economic strife of the past year.

“This historic legislation is about rebuilding the backbone of this country and giving people in this nation, working people, middle-class folks, the people who built this country, a fighting chance,” President Biden said March 12.

Lawmakers and policy analysts alike have shared their thoughts about the legislation, and how it will affect multiple areas of need for Californians. 

In his statement, Gov. Gavin Newsom focused on the aid that the state will receive from the legislation. Together, California state and local governments are set to receive over $40 billion dollars.

“With this infusion of federal stimulus, California can make faster progress on responding to COVID, supporting small businesses, putting money in people’s pockets, and bolstering K-12 and higher education. All of these pandemic responses add up to a brighter future for California,” said Newsom.

The governor says he looks forward to working with partners in the Legislature to identify “key shared priorities” such as equity, housing affordability, education, and infrastructure, and to chart a path for the state to come “out of this pandemic as a stronger and more inclusive California.” 

Direct aid to Californians includes one-time $1,400 stimulus payments for people earning less than $75,000 and $300 supplemental weekly unemployment benefits through Sept. 6. The first $10,200 in unemployment benefits will also be nontaxable for households that earn under $150,000.

The American Rescue Plan also provides aid for families with children through an expansion of the child tax credit. The one-year expansion increases the credit to up to $3,600 per child, distributed in monthly installments. According to projections by the Urban Institute, the child credit tax expansion will cut child poverty in half.

“It is unacceptable that in the richest country in the world, millions of children continue to go to bed hungry and are deprived of basic resources they need to succeed. As Co-Chair of the Majority Leader’s Task Force on Poverty and Opportunity, I applaud this long overdue effort to dismantle the systemic inequality that keeps kids and families at the bottom of the economic ladder,” says U.S. Congresswoman Barbara Lee (CA-13).  

The American Rescue Plan also includes nearly $130 billion in grants to state and local educational agencies, along with $39 billion in grants to higher education institutions and $15 billion to childcare facilities, to assist with safe school reopening. 

The package also provides increased funding for programs that help low-income earners. $25 billion will go to emergency rental assistance, with $5 billion set aside for emergency housing vouchers for unhoused people and survivors of domestic violence. Also, a provision in the package increases the value of cash vouchers for the Special Supplemental Nutrition Program for Woman, Infants and Children (WIC).

For business owners, the Small Business Administration (SBA) will receive $25 billion for a new grant program for restaurants, bars and “other food and drinking establishments,” with $5 billion targeted for businesses with lower revenue. Also, an extra $1.25 billion is set for the SBA’s Shuttered Venue Operators Grant, which supports live music and performance venues.

In an online briefing held by Ethnic Media Services on Mar. 13, the panelists spoke about how the legislation could serve as a blueprint for future permanent legislation.

“I should emphasize that all of the almost all of these are short term provisions, they are not permanent. But they provide guidance about the kinds of policies we might want to be enacting going forward on a permanent basis,” said Chad Stone, Chief Economist at the nonprofit Center on Budget and Policy Priorities.

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