Federal Legislation - “The American Rescue Plan Act of 2021"

This witticism is often attributed to Everett Dirksen, former Senator from the State of Illinois:

“A billion here, a billion there; pretty soon, we’re talking about real money!”

I know we have gone way past that point, but I think it paints a stark picture of the thinking of Democrats in Congress.

This COVID-19 relief bill, titled “The American Rescue Plan Act of 2021, is being legislated through the budget reconciliation process, which only requires a simple majority voting for it in both Houses of Congress.  Otherwise, the bill would require a 2/3rds majority to pass.  So, Republicans are in no position to defeat the bill. President Biden expects the bill to be on his desk by mid-March 2021 and has indicated he will sign it.

The American Rescue Plan Act has a price tag of $1.9 trillion.  Almost 20% of the funds, or $350 billion, to be appropriated under the Act will go towards “bailing out” States, metropolitan areas, counties, tribal governments and territories (and others) who have sustained revenue losses as a result of their decisions to shut down the economies in those States and areas. 

Section 5001 of the Act is titled “CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS”. Under this Section, Title VI of the Social Security Act (42 U.S.C. 801 et seq.) is amended by the addition/insertion of two new subsections:  Section 602 and Section 603. 

Subsection 602, titled, “CORONAVIRUS STATE FISCAL RECOVERY FUND”, appropriates $219,800,000,000 in year 2021 to States, territories, and Tribal governments to mitigate the fiscal effects stemming from the public health emergency with respect to the Coronavirus Disease (COVID–19).

This amount is allocated as follows:

Entities

Allocations

50 States and the District of Columbia

                      $195,300,000,000

Tribal Governments

                        $20,000,000,000

Territories

                         $4,500,000,000

Total

                     $219,800,000,000


Each State, territory, and Tribal government, except the District of Columbia, must certify to the need for the funds.  The certificate must claim: (i) that Federal assistance is required/needed, and (ii) that the State’s intended uses of any payment received will be limited to:

  • responding to or mitigating the public health emergency with respect to Coronavirus Disease 2019 (COVID–19) or its negative economic impacts;

  • covering costs incurred as a result of such emergency; 

  • replacing revenue that was lost, delayed, or decreased (as determined based on revenue projections for the State, Tribal Government, or territory as of January 27, 2020) as a result of such emergency; or

  • addressing the negative economic impacts of such emergency.

Under the second section, Section 603 titled “CORONAVIRUS LOCAL FISCAL RECOVERY FUND”, an additional appropriation is made in the amount of $130,200,000,000 to metropolitan cities, “nonentitlement units” of local government, and counties for the same purpose as under Section 602. The allocation is:

Entities

Allocations

Metropolitan Cities

$45,570,000,000

Nonentitlement Units of Local Governments Other than Counties

 

$19,530,000,000

Counties

$65,100,000,000

Total

$130,200,000,000

 

*The term ‘nonentitlement unit of local government’ means a unit of general local government, other than a county, that is located in a nonentitlement area (as defined in section 102 of the 8 Housing and Community Development Act of 1974 (42 U.S.C. 5302)) of a State (as that term is defined in such section 102).  42 USC Section 5302 provides that the term “nonentitlement area” means an “area which is not a metropolitan city or part of an urban county and does not include Indian tribes.”

Both Sections 602 and 603 contain other restrictions, such as caps on amounts of allocations and distributions, transfers, time limits, and the requirement that specific allocations requested by States and the other entities must be based on the most recent data available from the Bureau of the Census or, if not available, from such other data as a State determines appropriate.

I hope this is of value.  There are many other provisions within this $1.9 trillion bill.

Showing 1 reaction

Please check your e-mail for a link to activate your account.
  • Rissa Arias
    published this page in Blog 2021-02-24 17:40:15 -0500