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$1,400 stimulus checks, $400/week in enhanced unemployment: What's in Biden's Covid relief proposal

“We must act now and act decisively.”

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U.S. President-elect Joe Biden speaks as he lays out his plan for combating the coronavirus and jump-starting the nation’s economy at the Queen theater January 14, 2021 in Wilmington, Delaware.
Alex Wong | Getty Images

Many Americans have already received their $600 second stimulus checks as part of the most recent coronavirus relief bill. When President-elect Joe Biden takes office next week, he'll ask Congress to dole out even more funding to help struggling families and businesses get back on track.

As part of Biden's new $1.9 trillion American Rescue Plan released Thursday, the incoming administration proposes to provide aid including extended protections for renters facing evictions, additional funding for federal unemployment, support for Covid vaccine production and distribution, and another round of cash payments sent directly to Americans.

"The crisis of human suffering is in plain sight, and there's no time to waste," Biden said in a speech from his transition headquarters in Delaware. "We cannot let people go hungry. We cannot let people get evicted. We must act now and act decisively."

The proposal isn't a done deal yet, however. Recent wins by Georgia Democrats Jon Ossoff and Reverend Raphael Warnock will give Democrats tenuous control of Congress and make it easier to push a version of the plan through. But as with previous stimulus packages, the price tag might frighten legislators, and certain elements could change or get dropped along the way.

Here's a closer look at what's included in the proposal.

A $1,400 stimulus check

Eligible adults and children would receive another direct cash payment of $1,400 under the plan, bringing total relief to $2,000 when including the recently distributed payments of $600. 

That cash could come at the right time, considering the economic hardship brought on by the pandemic. Many Americans are falling behind on their bills. More than half, 54%, said they missed at least one bill payment in 2020 versus 29% who said they were worried about missing a payment in January that year, according to recent data from the online platform Clever

Since the start of the pandemic, an estimated 46 million U.S. adults have wiped out their emergency savings. And as of November last year, the average American had fallen $7,512 deeper into debt, bringing total nonmortgage debt to $41,559 for the typical person.

Americans have overwhelmingly said that they would use stimulus payments to replenish their savings, tackle lingering debt, and pay for essentials like housing and food.

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Federal unemployment benefits of $400 a week through September

The incoming administration is calling to increase the amount of federal unemployment that out-of-work Americans are receiving. The plan would increase enhanced unemployment benefits from $300 to $400 per week for the more than 18 million Americans currently collecting benefits.

Roughly 30 million jobs have been lost as a result of the Covid crisis. Last week, first-time unemployment claims jumped to 965,000, the highest weekly total since August.

The increased funding would run through September 2021, according to the proposal.

Billions to help renters and a nationwide eviction freeze

The Biden agenda includes $25 billion for rental assistance, $5 billion for overdue water and energy bills, and an extension of the nationwide eviction moratorium through the end of September 2021. The current freeze is set to expire at the end of this month.

A whopping 40 million Americans were in jeopardy of losing their homes without more financial assistance, data collected from the Aspen Institute last year found, and the $600 stimulus payment would barely cover a single month's rent in most of the country.

We cannot let people go hungry. We cannot let people get evicted.
Joe Biden
United States President-elect

Help for vaccination efforts, schools, essential services, and minimum wage workers

One of the bigger components of the plan is a $160 billion provision for the nationwide vaccination effort. Those funds would go toward ramping up production and distribution, as well as a public awareness campaign. Biden's goal is 100 million vaccine shots in his first 100 days. 

As another part of the proposal, local, state, and tribal governments would get $350 billion in funding that would reportedly go toward essential services such as police and fire departments.

The package also calls for a $15 federal minimum wage and $170 billion for K-12 schools and institutions of higher education, as children eventually head back to the classroom.

What's missing and what's next

One thing missing from the proposal is an extension on federal student loan forbearance, a measure that millions of Americans desperately need. Borrowers owe a combined total of $1.6 trillion in student loan debt, and the average monthly payment is nearly $400

In a Student Debt Crisis poll of nearly 59,000 U.S. adults conducted late last year, nearly 80% said they don't feel financially secure enough to resume payments until at least June 2021 or later.

Most borrowers, 90%, have taken advantage of forbearance during the pandemic, data shows. Under the current legislation, however, they are expected to restart payments in February.

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While there's no explicit mention of student loans in his proposal, the president-elect is still in support of $10,000 in student debt forgiveness, senior officials have said. If your income has dropped, experts say it may make sense to apply for an income-based repayment plan.

Biden's American Rescue Plan is the first of two big spending initiatives. The second, expected in February, will reportedly look to tackle job creation, infrastructure, climate change, and racial equity.

Experts expect the proposals will draw some criticism from Republican lawmakers, but the Biden camp is optimistic their plan has enough for Americans to gain support on both sides of the aisle.

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