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2020-21 May Revision Joint Analysis

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January 22, 2021

Biden Unveils his $1.9 Trillion COVID-19 Rescue Plan

On the evening of Thursday, January 14, 2021, officials from the Biden Administration unveiled the details of their touted $1.9 trillion rescue package that they are asking Congress to enact within the next several weeks. 

Billed the “American Rescue Plan,” the relief package would provide an additional $170 billion for education, which would be allocated in the following way:

  • $35 billion for the Higher Education Emergency Relief Fund. This funding could be used to implement public health protocols, execute distance learning plans, and provide emergency grants to students in need.
  • $5 billion for the Hardest Hit Education Fund. Governors could use this funding to support educational programs and the learning needs of students significantly impacted by COVID-19.Governors would have discretion to use this funding for early childhood education, K–12 schools, or higher education.

The relief package also asks Congress to provide $350 billion in emergency funding for state and local governments to ensure that they can keep front line public workers employed, assist with vaccine distribution, expand testing capacity, help with reopening schools, and maintain other essential services. Republicans opposed providing aid to state and local governments in the $900 billion relief package that was approved in December and likely will not support this proposed investment in the plan. Another proposal that Republicans are likely to oppose is President Joe  Biden asking Congress to raise the minimum wage to $15 per hour, which would more than double the current federal rate of $7.25 per hour.

The “American Rescue Plan” will be the Biden Administration’s first real test of the narrow Democratic control of Congress. While the plan likely will not face many roadblocks in clearing the House of Representatives, the Senate is a different story as there are more procedural hurdles to overcome in approving legislation. Additionally, Democrats will not be able to afford any defecting votes from their party in the Senate unless they can get a Republican vote in return, and some fiscally conservative Democrats may have reservations about the plan’s price tag and its more progressive proposals—such as more than doubling the current federal minimum wage and providing $1,400 stimulus checks to Americans. 

We will continue to monitor and provide our analysis on the $1.9 trillion rescue plan and its effect on California education as it gets debated and makes its way through Congress.

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