On Wednesday, March 10, Congress passed the American Rescue Plan Act and it is expected to be signed by President Joe Biden this week. The Alliance for Strong Families and Communities and Council on Accreditation (COA) has been advocating for key policies for numerous months, and we were pleased to see many of our priorities have been included in this bill.
This new $1.9 trillion legislation includes many important provisions for our sector and the communities we serve. These include (but are not limited to):
- Nonprofits with more than 500 employees will now have access to the Paycheck Protection Program after being shut out of earlier relief funding and lacking access to critical support.
- The $350 billion in state and local funding will enable our sector to continue critical partnerships with government to respond to the changing needs of communities.
- The child care sector, which has experienced tremendous disruption, enrollment drops, and added costs, will see nearly $40 billion in child care stabilization funding.
- The $350 million infusion into the Child Abuse Prevention and Treatment Act (CAPTA), which is a significant and historic investment in front-end prevention and support for families, will help keep children out of the foster care system and at home with their families.
- Direct payments to working class Americans, supplemental unemployment benefits, and the expansion of the Earned Income Tax Credit will provide relief for individuals and families who are working hard to weather this storm and continuing to give back to our economy.
- A newly expanded Child Tax Credit that will significantly increase resources for families with children under the age of 6. The families with the least financial resources will get the full amount. This funding will be distributed monthly, so families have a regular flow of dollars coming in to cover basic needs. This policy is expected to cut America’s child poverty rate in half.
- Additional investments, like expanded health coverage, nutrition programs, and new dollars for rent and utility assistance will give individuals and families the support to move toward full recovery.
There are many other important provisions included in the bill, which are outlined below.
For the Alliance and COA's response to this legislation, read our statement.
State & Local Budgets
- $350 billion in emergency funding for state, local, tribal and territorial governments to ensure that they can keep front line public workers on the job and paid, while also effectively distributing the vaccine, scaling testing, reopening schools, and maintaining other vital services.
- Establishes that states will receive, at minimum, the amount of funds they received under the CARES Act and specifies the funds can be used for:
- Small businesses and nonprofits;
- Tourism, travel, and hospitality industries;
- Investments in water, sewer, and broadband infrastructure; and
- “Premium Pay” for essential workers, defined as workers needed to maintain continuity of operations in protecting the health and well-being of residents.
- Up to $13 dollars per hour, capped at $25,000 per worker.
- $195.3 billion for states and Washington, D.C.:
- $25.5 billion equally divided among states.
- $169 billion distributed based on the amount of unemployed in each state.
- Treasury Secretary Janet Yellen has the authority to withhold 50% up front depending on the state’s unemployment rate.
- $130.2 billion for cities and counties:
- $65.1 billion for municipalities.
- $65.1 billion for counties.
- $10 billion for the Treasury Department to distribute to states for capital projects.
Financial Relief for Nonprofit Organizations
Paycheck Protection Program for Larger Nonprofits
- $7.25 billion for nonprofits and small businesses under the Paycheck Protection Program, with eligibility expansion to mid-size nonprofits with less than 500 employees per physical location. Now midsize nonprofits who have multiple sites and more than 500 employees will be eligible, so long as no one physical location exceeds 500 employees.
- This increases the total program level to $813.7 billion.
- Establishes a new eligibility category for “additional covered nonprofit entity” which includes nonprofits not listed as 501(c)(3), 501(c)(4), 501(c)(6), or 501(c)(19), receives and spends less than 15% of its receipts and expenses on lobbying, spends less than $1 million on lobbying, and employs no more than 300 employees.
Unemployment Insurance Reimbursement for Nonprofits
- Extends the subsidy for costs incurred by nonprofit employers who provide unemployment benefits on a reimbursable basis, rather via tax contributions (self-insured). Increases the subsidy from the CARES Act level of 50% to 75%, for weeks beginning after March 31 and continuing through Sept. 6.
Employee Retention Tax Credit
- Extends the employee retention tax credit through Dec. 31, 2021. Allows hardest hit organizations to count all wages paid on qualifying wages, not just those wages paid to employees that are not providing services.
Targeted Economic Injury Disaster Loan (EIDL) Advance
- Provides an additional $15 billion for the Targeted Economic Injury Disaster Loan (EIDL) Advance program and directs the Small Business Administration to make $5 billion of any remaining funding available for supplemental grants for severely impacted organizations that have suffered an economic loss of 50% or more and have ten employees or less. Exempts EIDL grants from taxes.
- Extends the paid sick time and paid family leave credits created by the Families First Coronavirus Response Act from March 31, 2021 through Sept. 30, 2021.
- Increases the amount of wages for which an employer may claim the paid family credit in a year from $10,000 to $12,000 per employee and increases the number of days for which self-employed individuals can claim the credit from 50 to 60.
- Expands eligible leave to include time taken to receive or recover from a COVID-19 vaccine.
Child & Family Well-Being
Child Abuse Prevention and Treatment Act (CAPTA)
- Funds the CAPTA program at historic levels, for a total of $350 million.
- Title 1 Grants to states are funded at $100 million.
- $250 million for Title II community based (CBCAP) grants, which will be available through Sep. 30, 2023.
- 100% of dollars will be divided by using a population formula of children under the age of 18.
- The state match is fully waived.
- Dollars will be subject to existing rules under current law (aside from the formula and state match provisions).
- $150 million for the Maternal, Infant and Early Childhood Home Visiting Program.
Family Violence Prevention and Services Act (FVPSA)
- $450 million for the Family Violence Prevention and Services Act (FVPSA) for formula grants, the national domestic violence hotline, and support for survivors of sexual assault.
Health & Behavioral Health
Health Care Coverage
- Increases coverage in the federal COBRA health insurance program from 85% to 100% to help workers who lost their jobs retain health insurance; available through Sept. 30, 2021.
- $35 billion to make health insurance on the Affordable Care Act marketplace more affordable.
- For 2021 and 2022, premiums would be eliminated for individuals below 150% of the federal poverty level (FPL), and cap premium costs at 8.5% of income for all other households (including households above 400% of the FPL, which were previously ineligible).
- Premiums would be eliminated for individuals living below the poverty line and receiving unemployment benefits in 2021.
- Provides incentives to states to expand Medicaid by increasing the federal medical assistance percentage (FMAP) by five percentage points for two years.
- Includes one-year FMAP increase from 7.35% to 10% for home- and community-based services.
- Provides the option for states, for five years, to expand Medicaid and Children’s Health Insurance Program eligibility to pregnant women for 12 months postpartum.
Public Health Workforce
- $9.1 billion in public health workforce-related support:
- $7.66 billion for establishing, expanding, and sustaining the public health workforce.
- $100 million for the Medical Reserve Corps.
- $800 million for the National Health Service Corps.
- $200 million for the Nurse Corps.
- $330 million for teaching health centers that operate graduate medical education.
- $3.5 billion for the Substance Abuse Prevention and Treatment and the Community Mental Health Block Grants.
- $100 million for behavioral health workforce education and training.
Child Care & Education
- $24 billion emergency stabilization fund to help hard-hit child care providers, including family child care homes, to cover costs and operate safely.
- $15 billion for the Child Care and Development Block Grant program for child care subsidies to families.
- $1 billion for Head Start.
K-12 School Funding
- $123 billion for K-12 schools to help upgrade ventilation systems, reduce class sizes, purchase personal protective equipment, and hire additional staff.
- 20% must be used for summer enrichment, after-school programs or extended-day or extended-year programs.
- Two $1.25 billion set asides for evidence-based summer instruction and afterschool programs.
- $3 billion for the Individuals with Disabilities Education Act, with $550 million set aside for programs for preschools and infants and toddlers.
- $800 million for the Elementary and Secondary School Emergency Relief Fund to identify and support homeless children and help them participate in school.
- $7.2 billion for E-Rate program to make telecommunications and information services more affordable for schools and libraries.
- $2.75 billion for the Emergency Assistance for Non-Public Schools program.
Higher Education Funding
- $39.6 billion for colleges and universities, at least half of which is for emergency financial aid grants to students to help with college costs and basic needs, like housing, food, and health care.
Student Loan Relief
- All COVID-19-related student loan relief, discharged December 2020 through January 2026, will be tax-free.
- Extends the 15% Supplemental Nutrition Assistance Program (SNAP) benefit increase through Sept. 30, 2021.
- $490 million to increase Supplemental Assistance for Women, Infants and Children (WIC) benefits by $35 per month for four months.
- Increases the age limit for meals at home shelters from 18 to 25.
- $37 million for the Commodity Supplemental Food Program to provide food for seniors.
Emergency Food and Shelter
- $510 million for the Emergency Food and Shelter Program under the Federal Emergency Management Administration. These funds will deliver services to the homeless; support food banks; and provide rental, mortgage, and utility assistance.
Rental and Housing Assistance
- Extends the eviction and foreclosure moratoriums and continues applications for forbearance on federally-guaranteed mortgages until Sept. 30, 2021.
- $21.6 billion for emergency rental assistance for renters and small landlords.
- Eligible for households that qualified for unemployment benefits, received an eviction notice, or whose household income doesn’t exceed 80% of area median income.
- $9.96 billion for homeowners to pay for mortgage payments and utilities.
- $5 billion for emergency Section 8 Housing Choice Vouchers to shelter the homeless.
- $5 billion for provide non-congregate shelter, like motels, to the homeless.
- $4.5 billion for the Low-Income Home Energy Assistance Program, plus $500 million for low-income water assistance.
Economic Mobility & Supports
Direct Payments (Stimulus Checks)
- Gives families a $1,400 per-person check (including both full-time students younger than 24 and adult dependents), in addition to the $600 stimulus checks provided to families in December, for a total of $2,000.
- Individuals and couples earning up to $75,000 and $150,000, respectively, will earn the full rebate.
- Extends $300 weekly federal unemployment insurance benefits until Sept. 6.
- Extends emergency unemployment insurance programs through September 2021, easing access for workers who are not traditionally included in the unemployment insurance program or who have exhausted regular benefits.
- The first $10,200 in 2020 benefits is non-taxable for households making less than $150,000.
Temporary Assistance for Needy Families (TANF)
- $1 billion for states to cover additional cash assistance that Temporary Assistance to Needy Families (TANF) recipients needed as a result of the pandemic crisis.
Tax Credit Assistance
Earned Income Tax Credit (EITC)
- Raises the maximum Earned Income Tax Credit for childless adults from roughly $540 to close to $1,500, by increases the credit percentage from 7.65% to 15.3% and raising the income level at which the credit begins to phase out.
- Reduces the age minimum to receive benefits from 25 to 19 and eliminates the age cap so that older workers can claim the credit.
Child Tax Credit
- Expands the child tax credit to $3,000, from $2,000, for each child 17 and younger. Children under age six would be eligible for $3,600.
- Makes the tax credit fully refundable for 2021 and eliminates the existing $2,500 minimum earnings requirement.
- Individuals earning less than $75,000 and couples earning less than $150,000 will be receive the full credit amount.
- Half of the credit will be distributed periodically throughout 2021, while the other half will be available through 2021 tax returns.
Child and Dependent Care Tax Credit (CDCTC)
- Expands the Child and Dependent Care Tax Credit (CDCTC) to cover 50% of care costs up to $8,000 for one child and $16,000 for two or more children.
- Families earning up to $125,000 are eligible for the full credit and phases out for higher incomes.
- The credit would make the CDCTC fully refundable so that the lowest-income families can benefit.
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