The Senate passed the American Rescue Plan on Saturday, one of the first major pieces of legislation passed by the Senate during President Joe Biden’s administration. The $1.9 trillion COVID-19 relief bill will provide funding for schools to bring children back to in-person learning,extend unemployment insurance and expand vaccine distribution. It also includes $1,400 per-person checks to certain households, including adult dependents, who have been excluded from previous relief bills.
The Senate’s version of the bill also guarantees that student loan forgiveness passed between December 31, 2020 and January 1, 2026 will be tax-free.
The U.S. House of Representatives passed their version of the bill on Feb. 28. It must pass the House a second time, now with the measures approved by the Senate, before being sent to Biden for his signature.
In May 2020, the first stimulus bill labeled The Coronavirus Aid, Relief and Economic Security Act granted emergency funds to colleges and universities. Of the $12.6 million given to the University of Michigan, $2.7 million was distributed to the 5% of the student body deemed eligible to receive funds.
LSA sophomore Alex Dumont, communications director for Done Waiting, said he is in full support of stimulus funding, especially for young adults and students who are responsible for paying their tuition and day-to-day expenses.
“We’ve seen — especially at the University of Michigan, but other schools as well — tuition hasn’t gone down, rent hasn’t gone down … the expenses aren’t going away but the opportunity to get money to pay for them are,” Dumont said.
Education freshman Jaime Annear said the inclusion of college students is essential and is glad that people who qualify are getting a stimulus check.
“I think it’s really important that college students are now included because I know people who missed out on the last stimulus check and it meant that they couldn’t make a payment on their loan or that they couldn’t make a payment on their rent,” Annear said.
The stimulus checks, which were approved by the Senate on March 6, account for $422 billion of the rescue plan and will be issued starting in mid-March to all individuals earning less than $75,000 and married couples earning less than $150,000. Parents of children will also receive $1,400 per child, including adult dependents.
Luke Shaefer, a social work and public policy professor, is the director of Poverty Solutions at the University, a university-wide effort directed at alleviating poverty. He said excluding adult dependents was one of the “shortcomings” of the previous rounds of relief.
Shaefer also said expenditure data from the past year shows that stimulus checks are extremely productive.
“The biggest and most important thing is that (the bill) includes the very poorest families,” Shaefer said. “It is by far the most successful thing that we have ever done as a country to buffer families from severe economic catastrophe.”
Public Policy senior Benjamin Gerstein, former president of the University’s Central Student Government, agreed with Dumont that the stimulus package will be beneficial for young adults navigating “the multi-faceted difficulties of college affordability.”
“I think it’s definitely a step in the right direction from what we’ve had prior,” Gerstein said. “The economic situation demands robust relief in a lot of different forms, and so the stimulus checks are helpful — I believe they should be $2,000 and not $1,400, but they’re definitely better than nothing.”
In contrast, Business sophomore Dillon Hong said the stimulus checks could be very helpful for college students in the short run but is worried about long-term implications of such large influxes of money into the economy.
“We haven’t really felt anything with inflation (yet), but having people going out and spending (their stimulus checks), pumping (money) into the system and having it circulate might cause that to spiral,” Hong said. “It’s a little bit concerning.”
An expansion of the Child Tax Credit is also included in the bill, providing families with $3,600 per child under 6 and $3,000 per child ages 6-17 over the course of the year in tax credits. Additionally, about $130 billion will go to K-12 schools and $40 billion will be allocated for colleges and universities.
The plan will also expand affordable health care coverage, increase small business relief funds and dedicate funds to housing and food security programs, according to The Washington Post.
The American Rescue Plan will be passed under the legislative category of budget reconciliation, a procedural loophole for federal budget bills that only require a simple Senate majority.
All 50 Senate Democrats voted to pass the bill. Because one Republican Senator abstained, Vice President Kamala Harris did not need to break a 50-50 split.
The bill originally included a raise of the federal minimum wage from $7.25 to $15, but Senate Parliamentarian Elizabeth MacDonough, a nonpartisan official, ruled last Thursday the minimum wage increase could not remain on the bill because it did not specifically affect the budget.
Shaefer said the parliamentarian is one of the most powerful people in Washington, D.C., right now because the nuanced filibuster requires 60 Senate votes in favor of a bill — except for Budget Reconciliation bills.
In a statement on Feb. 25, Jen Psaki, White House press secretary, said President Joe Biden was “disappointed” with this development but hoped the bill would be approved by the Senate swiftly to provide relief to millions of Americans.
Gerstein said he was disappointed that Senate Democrats and Vice President Kamala Harris did not make more of an effort to unify the party in pursuit of the minimum wage raise. He also said he thinks the minimum wage should be more than $20 if it kept up with inflation.
“I am happy that House Democrats kept (the minimum wage raise) in their version of the bill, it’s important to show that it is a legislative priority,” Gerstein said. “I wish there was more of an effort from the Vice President and Senate Democrats and from President Biden to try to get the caucus unified in pursuing it.”
Shaefer and Dumont both cited the gradual minimum wage increase passed in Florida during the Nov. 2020 election — in a state where Donald Trump won the popular vote — as evidence of some bipartisan support for the measure. But Shaefer also noted there may be some immediate negative effects if the minimum wage would be increased.
“I think we should plan on there being some job losses if the minimum wage increase were to go through,” Shaefer said. “The direct stimulus payments are going to have a much bigger impact on reducing hardship during this time.”
Annear said she strongly supports the minimum wage increase, especially “as someone who has worked a minimum wage job before.”
The American Relief Plan also extends unemployment insurance through Aug. 29, 2021 — one month shorter than Biden’s original proposal — and increases the weekly payments from $300 to $400.
Shaefer said the expansion of unemployment insurance to workers in non-standard work arrangements, like the gig economy, in combination with stimulus checks will have an “enormous impact” in improving the economic well-being of Americans during the pandemic.
Daily Staff Reporter Brooke Van Horne can be reached at brookevh@umich.edu.
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