Millions of Americans across various states have started getting stimulus checks from their residing state governments. The drying up of federal support for citizens with the end of 2021 has coincided with a rise in prices. The inflation rate rose from a little over 2% in February 2021 to over 8% a year later. This rise was anticipated by the federal administration, but not to the extent to which it did.
Further, the Biden administration was tied down by a partisan opposition as the Republicans strongly opposed any form of further stimulus checks from Washington. This is even though the first two rounds of stimulus checks were declared under a Republican administration.
The GOP has maintained that the third stimulus check was solely responsible for the inflation and has pointed out that the prices began to rise in the month the economic impact payment was declared when incoming President Joe Biden passed the American Rescue Plan Act in March 2021.
The payments began to be dispersed within a week of the signing of the bill and billions went out to people who continued to despair as the economic downturn continued despite the opening up of the economy.
The Rescue Plan was way more than the third stimulus checks. The third economic impact payment was an important component of it. But the ARPA offered much more that did much to protect the economy at a time federal assistance was much needed.
The first two rounds of economic impact payments were sufficient to put a brake on the inevitable descent into chaos as families struggled to manage their finances as millions found themselves out of a job.
For the first time, they did not have the option of looking for another job as it was a total shutdown that lasted for months. Unemployment figures rose alarmingly and approached 15%, something that had never happened even during the Second World War.
The stimulus check payment managed to ward off poverty, homelessness, payment defaults, and high-interest loans. But things were never going to return to normal unless the COVID-19 virus could be controlled through the vaccine. And that took a year before the vaccination drive began even as President Biden assumed power. By then the pandemic had already claimed 300,000 lives. By end-2021, it would go on to claim a total of close to a million lives.
The economy was in a total mess when President Biden signed the ARPA. Businesses continued to remain shut as people stayed away from work or were forced to stay at home as the pandemic raged.
The Rescue Plan Act And The Third Stimulus Check Gave The Much Needed Impetus To The American Economy
President Biden’s $1.9 trillion coronavirus relief package, the American Rescue Plan Act allocated money that covered every aspect of the economy along with direct support, an important component of the act. The bill set aside money for businesses, schools, vaccines, and anti-poverty measures including the expanded Child Tax Credit stimulus checks.
The child tax credit meant 6 more months of steady income for parents. With children affected the most during the pandemic, this support meant a lot to families even as the other forms of federal stimulus payments started to dry out.
The final approval from the House came after certain changes in the bill. This was done to satisfy the budget rules of the Senate. But mostly it was to gain the support of a small section of ruling party senators.
With the Senate split right down the middle, and only vice president Kamala Harris’s deciding vote settling the outcome, Joe Manchin and Krysten Sinema began to take advantage of the situation and used every occasion to bargain for concessions to benefit the gas and coal lobbies that they strongly backed. No Republican voted in favor of the ARPA.
Both the House and Senate Minority Leader, Kevin McCarthy and Mitch McConnell labeled the bill as a Democratic ‘wish list.’
ARPA Linked To Multiple Crisis Facing The Nation
The ARPA took a holistic view of the entire economic and health situation prevailing during the first quarter of 2021 when the bill was signed by President Biden. There were 2 pieces to this bill. One was related directly to the momentous health crisis that the nation faced while the other, an equally significant part was linked to the economic crisis which was precipitated by the pandemic.
The major constituents of the bill, all were part of the ARPA package. This included the payments made to individuals under the stimulus checks, the extended employment payments and the prolonged period of joblessness, the money set aside for localities, tribal organizations, and states, and the money for education institutions.
A majority of these issues were also addressed under the first round of the stimulus checks and the Republicans were ok with it then as it was under Trump’s leadership. But while they were in line with it then, they opposed it vehemently less than a year later.
The Increase In Minimum Wages Did Not Materialize As Enemies Within The Party Nixed It
One vital proposal that was much discussed and was close to President Biden’s heart was the proposed increase in minimum wages. That did not finally make that cut even though progressive Democrats vigorously backed including this in this legislation.
Such a move would have gradually increased the federal minimum wage to a minimum of $15 an hour by 2025. But the provision could not ultimately be included within the complicated rules over the budget bills. It ultimately got left out.
Some of the big-ticket provisions that got included in the Senate amended bill and signed by President Joe Biden included direct payments that gave up to $1,400 per individual whose earnings were below $75,000.
Other measures included the extension of unemployment benefits and the expanded Child Tax Credits stimulus check. The paycheck protection programs allowed funds to non-profits and small businesses that ensured that workers continued to get paid despite the shutdown linked to the pandemic.
Low-income families received further support with home cooling and heating costs and also a substantial grant to state educational agencies.
The public health initiative was one of the biggest beneficiaries as money was allocated for the vaccination drive. Families also received rental assistance that prevented homelessness to a large extent.