President Biden has now signed the American Rescue Act into law. This economic package - costing an astonishingly high $1.9 trillion dollars - is expected to create a major boost to the United States economy by injecting it with trillions in cash. The mos

• Author: Jacob Greene
• Posted: 2024-10-04

State and Local Aid

One of the often forgotten about areas of the pandemic has been its major impacts on state and local governments. These vital governmental units, which include funding for first responders and teachers, faced steep revenue drops, putting them in a position where layoffs and service cuts may be inevitable.
Thankfully, $350 billion of the American Rescue Act were budgeted to address these major needs. This funding could be used to deal with COVID expenses, backfill revenue losses, or invest in infrastructure development. What it can't be used for is to fund tax cuts: If a state or locality tries that, the federal government will claw back the funding.
This funding will go to a variety of governmental units, including states, local governments, and school districts. It is explicitly designed to enable these governments to cope with major spikes in COVID expenses and ensure that any revenue losses that they suffer will not force them to shut down. There are also $10 billion associated with capital projects, thus allowing states to make major investments in buildings and infrastructure that will make it easier for people to work remotely.

Unemployment Compensation Extensions & Increases

One of the great fears about this year's stimulus debate was that it would end up like last year's, with unemployment benefits expiring, causing an interruption of benefits for millions of individuals for whom these benefits provide a financial lifeline. Thankfully, that wasn't the case this year. Unemployment benefits were extended with plenty of time, and they were also enhanced.
Under the American Rescue Act, Pandemic Unemployment Relief was extended to a maximum of 79 weeks. The FPUC - the federal enhancement for unemployment - was extended as well, with the amount staying at $300 a week. PEUC, the emergency benefit, was also extended. All benefits will be fully funded by the federal government, meaning that states will not have to use their own limited and strained unemployment funds to pay for these extensive benefits.
A new benefit is tax relief: The first $10,200 of unemployment benefits is excluded for federal tax purposes. This will ultimately return thousands of dollars to the pockets of individuals who are currently claiming unemployment compensation benefits.

Business Assistance

One of the most life-saving benefits of the original CARES Act was the PPP loan program. This program served as a lifeline for millions of businesses, enabling them to keep their doors open and not have to repay the money they were given, provided there were no layoffs at their business.
Thankfully, this popular program was extended and improved upon. $7.25 billion was spent to expand eligibility of the PPP to non-profits, giving these vital organizations a chance to keep their doors open and continue to serve their communities. Other programs were supported or enhanced. For example, $28.6 billion was allocated to fund the Restaurant Revitalization Grant program. This program is targeted towards restaurants, bars, and other eating establishments that took the brunt of the COVID pandemic. Another $1.25 billion was budgeted towards helping "venue" operations," and $3 billion was reserved towards states that were hit hard by financial issues suffered by the tourism and outdoor recreation industries.
Indeed, as you can see, many of these business benefits are specifically geared towards industries that were hit hard by the pandemic.
The benefits are already making a major difference for many American companies. For example, American Airlines told 13,000 employees to ignore their furlough notices, saying that the PPP extension meant they could absolutely keep their jobs.
There is no question that many major challenges remain in terms of battling the COVID-19 pandemic. However, if all goes well, the American Rescue Act's generous financial offerings will help to keep Americans working, in their homes, and able to pay their bills.