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President Joe Biden speaks during a roundtable with Americans who will benefit from the Covid-19 pandemic relief check on March 5, 2021 in Washington, D.C.

President Joe Biden speaks during a roundtable with Americans who will benefit from the Covid-19 pandemic relief check on March 5, 2021 in Washington, D.C. (Photo: Samuel Corum/Getty Images)

Unlike $1.9 Trillion GOP Tax Scam, Democrats' $1.9 Trillion Relief Plan 'Puts Money in Hands of Working People'

Sen. Bernie Sanders called the American Rescue Plan "the most significant piece of legislation to benefit working families in the modern history of this country."

Jake Johnson

President Joe Biden's American Rescue Plan and former President Donald Trump's Tax Cuts and Jobs Act are both estimated to cost around $1.9 trillion over the next ten years, and both were passed using the arcane procedural tool known as budget reconciliation.

But that's where the similarities between the two major bills—Biden and Trump's first major legislative undertakings while in office—come to an end.

"Compared to the response to the Great Recession, this package meets the scale of this unprecedented crisis, delivering the equivalent of seven percent of GDP for the coming year."
—Rep. Pramila Jayapal

While Trump and the GOP's unpopular tax cuts infamously showered money on large corporations and individuals in the top income brackets, analysts say Biden and the Democratic Party's popular coronavirus relief package will disproportionately benefit lower- and middle-income people through direct payments, enhanced unemployment insurance, a sizable expansion of the child tax credit, better pension protections, an increase in nutrition assistance, and more.

The bill is expected to pass the House and reach the president's desk as early as Tuesday.

Once the new legislation is signed into law, the average family of four can expect to receive $5,600 in direct payments alone—$1,400 per adult and $1,400 per child and adult dependent.

The bill also includes a child tax credit boost under which most parents will receive $3,000 per year for every child between the ages of six and 17 and $3,600 per year for every child younger than six. Experts predict the year-long tax credit expansion—which Democrats hope to make permanent—will cut child poverty in half.

According to a distributional analysis by the Tax Policy Center (TPC), the direct payments and tax credit provisions in the American Rescue Plan will boost the incomes of the bottom fifth of Americans by 20%. By contrast, TPC estimated in 2017 that the Trump-Republican tax cuts would boost the incomes of the bottom quintile by less than 1%.

"It is as far away as you can get from regressive, supply-side economics," Sen. Michael Bennet (D-Colo.), a moderate Democrat, said of the relief package in an interview with the New York Times over the weekend. "This is progressive economics that puts money in the hands of working people who will spend that money."

Though dismayed by the exclusion of a long-overdue increase in the federal minimum wage, the last-minute inclusion of additional eligibility restrictions for the direct payments, and other significant shortcomings of the package, progressive lawmakers are celebrating the bill in its entirety as a historic and desperately needed step toward easing the widespread pain inflicted by the coronavirus pandemic and ongoing economic crisis.

In a statement on Saturday, Sen. Bernie Sanders (I-Vt.), chairman of the Senate Budget Committee called the American Rescue Plan "the most significant piece of legislation to benefit working families in the modern history of this country."

"Working families will get $1,400 per individual from a third stimulus check, plus they will benefit from a muscled-up child tax credit of $3,000 per child. That is real aid."
—Andrew Stettner, The Century Foundation

"This package, among many other things, increases direct payments by $1,400, extends unemployment benefits, reduces child poverty by half, ensures we are vaccinating as many people as possible, and puts us on a path to safely reopen schools," Sanders said. "The American people are hurting, and this comprehensive plan goes a long way to addressing the myriad crises that we face."

Rep. Pramila Jayapal (D-Wash.), chair of the Congressional Progressive Caucus, voiced similar praise for the nearly $2 trillion legislative package, saying the bill would "put money directly in people's pockets and decisively crush the coronavirus' spread" with billions in new funding for vaccine distribution.

"Compared to the response to the Great Recession, this package meets the scale of this unprecedented crisis, delivering the equivalent of seven percent of GDP for the coming year—exactly what economists say is needed to jumpstart our economy and the labor market," Jayapal added. "This is a crucial down payment on the $3 to $4.5 trillion in total stimulus funding needed to fully recover from this crisis."

Citing a recent analysis by Columbia University's Center on Poverty and Social Policy, the Washington Post reported Saturday that the relief package "will reduce poverty by a third, lifting nearly 13 million Americans out of it."

"Black Americans, Hispanic Americans, and poor families with children are set to benefit the most," the Post noted. "The response to the Great Recession was about $1.8 trillion over several years and the most optimistic estimates are that about six million Americans were kept out of poverty in 2009 because of efforts by Congress at the time."

Andrew Stettner, a senior fellow at the Century Foundation, said Saturday that the American Rescue Plan "will deliver an unprecedented amount of aid to workers facing previously unimaginable economic turmoil wrought by Covid-19.

"By locking in unemployment benefits through the end of summer, the bill cures a critical problem of the December stimulus," said Stettner. "Beyond UI, working families will get $1,400 per individual from a third stimulus check, plus they will benefit from a muscled-up child tax credit of $3,000 per child. That is real aid that can help reverse the unprecedented economic inequities laid bare and exacerbated by the pandemic."


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