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What the $1.9 trillion American Rescue Plan means for Californians

By Quinci LeGardye | California Black Media & ONME Newswire

On this ONR episode of News Too Real with producer host Julia Dudley Najieb, experts break down the COVID-19 Relief Bill that just passed, explaining how it is different from the last one. From an Ethnic Media Services briefing last week, several experts weighed on the issue to break down the bill: Congressman Raja Krishnamoorthi; chief economist, Chad Stone; tax policy expert, Elaine Maag; and restaurant research specialist, Dr. Sekou Siby.

The panelists spoke about how the legislation could serve as a blueprint for future permanent legislation.

Stone reiterated the timeliness of the American Rescue Plan:

The plan address three issues: first, getting the virus under control so that the economy and life in general for that matter, can safely operate more normally, said Stone, Chief Economist at the nonprofit Center on Budget and Policy Priorities. Second, addressing and relieving much of the substantial hardship and uncertainty so many Americans have endured over the past year ... this hardship has been particularity acute among Black, Latino, and indigenous people, immigrants and households with children also have been particularity hard hit. And third, as a follow on benefit, really, it provides substantial stimulus to an economic recovery that frankly had stalled only halfway back to full employment.

"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 Stone.

Congressman Raja Krishnamoorthi (D-Illinois) feels the package of measures they just passed is a game changer that will help the economy heal, and help America heal from the healthcare crisis--11 million people will have their unemployment insurance extended which was to expire last week.

"Businesses, including restaurants, have new grant programs so that they can survive," said Krishnamoorthi "Of course schools will be able to safely reopen, there is a lot of money for vaccines and testing, but also for housing assistance and nutritional assistance.

Krishnamoorthi said he has been fighting for state and local aid for one year which fell on deaf ears during the Trump Administration; the Joe Biden Administration is listening instead, addressing the reality of tax revenue decreases in local governments.

"With regard to the state and local aid, basically it is necessary for a couple of reasons: one because sales tax revenues and other sources of tax revenuers have declined dramatically for many states and local municipalities and jurisdictions, those particular governments are faced with one of two options. Either hike taxes, or cut services, or potentially do both. But none of those actions are acceptable during a pandemic."

Maag of the Urban Institute talked about how half of low-income children will be lifted out of property because of Biden's new legislation in The American Rescue Plan which include economic impact payments (recovery rebates) and an increase in the child tax credit.

"These are two cash benefits that will affect a very large share of low-income families," said Maag.

In 2021, Maag said that it was estimated that poverty would grow to 14 percent unless action was taken. The American Rescue Plan would help drop despicable poverty rates.

"While White families were projected to have a poverty rate of under 10 percent, Black families were projected to have poverty rate of 18 percent, and Hispanic families were projected to have a poverty rate of 22 percent."

Dr. Siby reiterated the need for a minimum wage which would be at a gradual increase.

"Overall 17 percent of service workers (who are women) rely on public service like food stamps and medicaid while working long hours just to make ends meet--these are the working poor, and that is not right," said Siby.

According to Dr. Siby, the living wage in California is $18.66 per hour although the minimum wage is $12 per hour.; in Mississippi the minimum wage is $7.25, the federal minimum wage which has not moved in 10 years. The living wage in Mississippi is $13 per hour.

President Joe Biden's COVID-19 Relief Plan

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 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.


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