Congress has passed the American Rescue Plan, a $1.9 trillion spending package that aims to accelerate the U.S. economic recovery and provide funds to support the speedy distribution of vaccines.
This latest round of aid, which was rejected by all Republicans in Congress, marks the first major legislative victory for President Biden. In contrast with the emergency bills passed last year, the Democratic bill focuses the vast majority of aid on households, states and cities, and vaccine distribution. There is little money directed this time toward businesses.
Estimated deficit impact of major coronavirus relief bills over 10 years
March 2021 stimulus
March + Dec. 2020
Total aid: $1.9T
Total aid: $2.8T
Aid to individuals
$960B
Aid to individuals
$1,090B
Stimulus checks
Stimulus checks
Unemployment benefits
Health coverage provisions
Nutrition, housing & child-care
Refundable tax credits
(CTC, EITC, CDTC)
Unemployment benefits
State & local
governments $510B
Nutrition, housing & child-care
State & local
governments $275B
Businesses $915B
Businesses $65B
Other health care $100B
Other aid $140B
Small-business support
Other tax relief
Other health care $230B
Other aid $280B
Note: CRFB analysis accounted for $1.8 of the
$1.9T March 2021 stimulus
Source: Committee for a Responsible Federal Budget
March 2021 stimulus
March + Dec. 2020 stimulus
Total aid: $1.9T
Total aid: $2.8T
Aid to individuals $960B
Aid to individuals $1,090B
Stimulus checks
Stimulus checks
Unemployment benefits
Health coverage provisions
Nutrition, housing and child-care
Refundable tax credits
(CTC, EITC, CDTC)
Unemployment benefits
State & local governments
$510B
Nutrition, housing and child-care
State & local governments
$275B
Businesses $915B
Businesses $65B
Other health care $100B
Other aid $140B
Small-business support
Other tax relief
Other health care $230B
Other aid $280B
Note: CRFB analysis accounted for $1.8 of the $1.9T
March 2021 stimulus
Source: Committee for a Responsible Federal Budget
March 2021 stimulus
March 2020 + Dec. 2020 stimulus
Total aid: $1.9T
Total aid: $2.8T
Aid to individuals $960B
Aid to individuals $1,090B
Stimulus checks
Stimulus checks
Unemployment benefits
Health coverage provisions
Nutrition, housing and child-care
Refundable tax credits (CTC, EITC, CDTC)
Unemployment benefits
Aid to state & local governments $510B
Nutrition, housing and child-care
Aid to state & local governments $275B
Aid to businesses $915B
Aid to businesses $65B
Other health care $100B
Other aid $140B
Small-business support
Other tax relief
Other health care $230B
Other aid $280B
Note: CRFB analysis accounted for $1.8 of the $1.9T American Rescue Plan
Source: Committee for a Responsible Federal Budget
Over half the money — 54 percent — in the bill goes toward households. In addition to the popular $1,400 checks, there is also funding for extra unemployment insurance through Labor Day, expanded tax credits, and various programs to make rent, food and health insurance more affordable.
[Calculate how much you would get from the $1,400 (or more) coronavirus checks]
Economists say low- and moderate-income Americans will benefit the most from this aid, especially individuals earning $75,000 or less and couples earning $150,000 or less. The number of Americans living in poverty is predicted to drop in 2021 by as much as a third because of this legislation.
The cash infusion is expected to result in a 20 percent income boost for the bottom 20 percent of earners (those making $25,000 or less), according to the nonpartisan Tax Policy Center.
Change in after-tax income under Biden’s stimulus plan
The lowest income group would see their income rise by 20%, on average
20%
20%
increase
15
9%
10
6%
5
4%
1%
0
Lowest
quintile
Second
quintile
Third
quintile
Fourth
quintile
Highest
quintile
Household
income less
than $25k
$26 to
$51k
$51k to
$91k
$91k to
$164k
At least
$164k
Source: Tax Policy Center
THE WASHINGTON POST
The lowest income group would see their income rise by 20%, on average
20%
20%
increase
15
9%
10
6%
5
4%
1%
0
Lowest
quintile
Second
quintile
Third
quintile
Fourth
quintile
Highest
quintile
Household income
less than $25k
$26 to
$51k
$51k to
$91k
$91k to
$164k
At least
$164k
Source: Tax Policy Center
THE WASHINGTON POST
The lowest income group would see their income rise by 20%, on average
20%
20%
increase
15
9%
10
6%
5
4%
1%
0
Lowest
quintile
Second
quintile
Third
quintile
Fourth
quintile
Highest
quintile
Household income
less than $25k
$25k to
$51k
$51k to
$91k
$91k to
$164k
At least
$164k
Source: Tax Policy Center
THE WASHINGTON POST
[What’s in Congress’s $1.9 trillion covid bill: Checks, unemployment insurance and more]
One of the biggest complaints about the bill from Republicans is the overall price tag. This additional spending comes on top of about $2.8 trillion that was approved last year, plus trillions more that the Federal Reserve has pumped into markets and the economy.
How the Biden stimulus plan would affect the deficit
The American Rescue Plan would increase the budget deficit most in 2021 and 2022, according to the nonpartisan
Congressional Budget Office.
Projected impact
of latest stimulus
$3T
$2T
Actual budget deficit
$1T
Projection
without
stimulus
$0
2026
2002
2010
2021
Note: Years are fiscal
Source: Congressional Budget Office
THE WASHINGTON POST
The American Rescue Plan would increase the budget deficit most in 2021 and 2022, according to the nonpartisan Congressional Budget Office.
Projected impact of latest stimulus
$3T
$2T
Actual budget deficit
$1T
Projection
without
stimulus
$0
2026
2002
2010
2021
Note: Years are fiscal
Source: Congressional Budget Office
THE WASHINGTON POST
The American Rescue Plan would increase the budget deficit most in 2021 and 2022, according to the nonpartisan Congressional Budget Office.
Projected impact of latest stimulus
$3T
$2T
Actual budget deficit
$1T
Projection without stimulus
$0
2026
2002
2005
2010
2015
2021
Note: Years are fiscal
Source: Congressional Budget Office
THE WASHINGTON POST
Republicans argue that a smaller bill would be sufficient and that too much money is spent on programs not related to the coronavirus crisis. When the cost of all three stimulus bills are combined, the total greatly exceeds federal spending on both the Great Recession and New Deal, after adjusting for inflation and the growing size of the U.S. population.
On its own, Biden’s American Rescue Plan is smaller than those two interventions.
The three coronavirus bills combined dwarf earlier interventions
Federal spending per capita on stimulus during each era adjusted for inflation
Dec. 2020
Covid stimulus
(2020-2021)
March 2021
March 2020
Great Recession
(2009-2012)
New Deal
(1930-1940)
$0
$5K
$10K
$15K
Note: Figures are in 2021 dollars.
Source: St. Louis Fed, CRFB, U.S. Census
THE WASHINGTON POST
Total federal spending per capita on stimulus during
each era adjusted for inflation
March 2021
Dec. 2020
March 2020
Covid-19 stimulus
(2020-2021)
Great Recession
(2009-2012)
New Deal
(1930-1940)
$0
$5K
$10K
$15K
Note: Figures are in 2021 dollars.
Source: St. Louis Fed, CRFB, U.S. Census
THE WASHINGTON POST
Total federal spending per capita on stimulus during each era adjusted for inflation
Covid-19 stimulus
(2020-2021)
March 2021
Dec. 2020
March 2020
Great Recession
(2009-2012)
New Deal
(1930-1940)
$0
$5,000
$10,000
$15,000
Note: Figures are in 2021 dollars.
Source: St. Louis Fed, Committee for a Responsible Federal Budget, U.S. Census
THE WASHINGTON POST
Democrats counter that the nation spent too little in the wake of the Great Recession, which resulted in years of additional pain. Biden and Democratic leaders said they did not want to repeat that error.
[Biden wants to sell the stimulus. The White House is still figuring out how.]
Democrats are also portraying this legislation as one of the biggest anti-poverty efforts the U.S. government has undertaken in decades. The main income boost comes from another round of stimulus checks that can give as much as $5,600 to a family of four, and the temporary expansion of the Child Tax Credit, which will give as much as $3,000 per child ages 6 to 17 (and $3,600 for children under age 6) to low- and moderate-income families.
[Calculate how much you would get from the expanded child tax credit]
According to calculations by the Committee for a Responsible Federal Budget, a Massachusetts family of four that had an income of about $53,000 before the pandemic and has one parent out of work stands to receive more than $22,000 from this package. A single individual in Tennessee who is unemployed and used to earn about $25,000 could receive as much as $15,000 from this bill. These families would also potentially be eligible for more help to pay rent and afford health insurance.
A family of four in Massachusetts
in which one parent lost a job would get around $66,000 from the government, including $15,500
in assistance that would have been available even without the stimulus.
Child tax credit
Unemployment insurance
Stimulus payments
$25k
20k
15k
10k
5k
0
Previously
existing
assistance
March
2020
Cares
Act
Aug.
Lost
Wages
Assistance
Dec.
stimulus
package
March
2021
American
Rescue
Plan
A single unemployed person in Tennessee would get around $44,000, including $6,200 that would have been available even without the stimulus.
Unemployment insurance
Stimulus payments
$15k
10k
5k
0
March
2021
American
Rescue
Plan
Previously
existing
assistance
March
2020
Cares
Act
Aug.
Lost
Wages
Assistance
Dec.
stimulus
package
Note: Figures exclude a refund for some child-care costs. They assume an individual pre-unemployment income of $25,000 and,
where applicable, a family income of $53,000.
Source: Marc Goldwein, Committee for a Responsible Federal Budget
THE WASHINGTON POST
A family of four in Massachusetts in which one parent lost a job would get around $66,000 from the government, including $15,500 in assistance that would have been available even without the stimulus.
Child tax credit
Unemployment
insurance
Stimulus
payments
$25k
20k
15k
10k
5k
0
Previously
existing
assistance
March
2020
Cares
Act
August
Lost Wages
Assistance
December
stimulus
package
March
2021
American
Rescue Plan
A single unemployed person in Tennessee would get around $44,000, including $6,200 that would have been available even without the stimulus.
Unemployment insurance
Stimulus payments
$15k
10k
5k
0
March
2021
American
Rescue Plan
Previously
existing
assistance
March
2020
Cares
Act
August
Lost Wages
Assistance
December
stimulus
package
Note: Figures exclude a refund for some child-care costs.
They assume an individual pre-unemployment income
of $25,000 and, where applicable, a family income of $53,000.
Source: Marc Goldwein, Committee for a Responsible Federal Budget
THE WASHINGTON POST
A family of four in Massachusetts in which one parent lost a job would get around $66,000 from the government, including $15,500 in assistance that would have been available even without the stimulus.
$25k
Child tax credit
20k
15k
Unemployment insurance
10k
5k
Stimulus payments
0
Previously
existing
assistance
March
2020
Cares
Act
August
Lost Wages
Assistance
December
stimulus
package
March
2021
American
Rescue Plan
A single unemployed person in Tennessee would get around $44,000, including $6,200 that would have been available even without the stimulus.
$15k
10k
Unemployment insurance
5k
Stimulus payments
0
March
2021
American
Rescue Plan
Previously
existing
assistance
March
2020
Cares
Act
August
Lost Wages
Assistance
December
stimulus
package
Note: Figures exclude a refund for some child-care costs. They assume an individual
pre-unemployment income of $25,000 and, where applicable, a family income of $53,000.
Source: Marc Goldwein, Committee for a Responsible Federal Budget
THE WASHINGTON POST
The United States has about 40 million people living in poverty, and nearly 13 million of them are expected to be lifted out of poverty by this bill, according to an analysis by Columbia University’s Center on Poverty and Social Policy. An analysis by the Urban Institute predicts similar results, with poverty declining by as much as 42 percent among Black Americans and 39 percent among Hispanic Americans.
Andrew Van Dam contributed to this report.
