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Biden’s $1.9 Trillion Economic Stimulus Proposal Includes Small Business Grants, Seed Money for Business Loans

  • President-elect Joe Biden announces $1.9 trillion proposal to revitalize the U.S. economy and boost COVID-19 vaccine distribution
  • The plan includes $15 billion in small business grants and $35 billion directed toward low-interest business loans
  • The proposal is one of two Biden is expected to pitch, with the announcement of a larger stimulus package slated for February

President-elect Joe Biden has announced a $1.9 trillion “American Rescue Plan” aimed at revitalizing the United States economy and accelerating distribution of COVID-19 vaccines. The proposal comes just under one week before Biden will be sworn into office, amid an ongoing surge in COVID-19 infections and weakening economic signs.

The largest portion of Biden’s proposal would allocate $1 trillion in direct support to Americans. This aid would include $1,400 per person in direct payments as well as an extra $400 a week in unemployment benefits through the end of September.

Another $440 billion would go toward assisting businesses and communities, with $300 billion going to assist state and local governments. The remainder would include $15 billion in grants to small businesses and $35 billion in low-interest business loans, particularly for clean energy investments. The latter appropriation would serve as seed funding for up to $175 billion in loans.

The final $400 billion portion of Biden’s proposal would allocate funds to expand COVID-19 testing and vaccinations while also assisting schools with updating ventilation, purchasing personal protective equipment, or otherwise taking steps to safely reopen.

The proposal would renew provisions offering 14 weeks of paid sick, family, or medical leave. Companies with fewer than 500 employees would receive a refundable tax credit to reimburse them for the costs of the program. These provisions would extend through the end of September.

Biden outlined a number of other goals he is hoping to accomplish through the proposal, including funding 100,000 public health workers for contact tracing and vaccine outreach, extending tax credits to offset up to $8,000 in child care costs, and raising the federal minimum wage to $15 an hour.

In his address outlining the stimulus, Biden acknowledged the high price tag of the measure but said that failure to assist struggling households and businesses “will cost us dearly.” He is hoping to speed up the pace of vaccine distribution in the U.S., reiterating his goal of distributing 100 million first doses in his first 100 days in office. Economists have generally posited that widespread vaccine distribution is needed for greater economic stability.

A bipartisan compromise measure approving $900 billion in new economic stimulus passed Congress in December, following several months of partisan arguing over the size and scope of such relief. That package included $600 direct payments, an extension of $300-a-week supplemental unemployment benefits, and a revival of the Paycheck Protection Program to assist small businesses with forgivable loans.

The United States is grappling with a third wave of COVID-19 infections, and several states and cities have tightened business restrictions or taken other steps to try to limit the spread of the virus. There have also been more troubling economic signs, including a December jobs report showing the first net loss of positions in eight months.

Biden’s proposal is intended to address the immediate economic and health needs in the United States. Biden is expected to pitch a followup package in February that puts more focus on economic and infrastructure improvements, along with investments in health care and investments.

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