President Biden Proposes $1.9 Trillion COVID Recovery Bill

$1.9 Billion COVID relief bill proposed by President Biden
What’s in the American Relief Plan?
President Biden recently announced his framework for an American Rescue Plan (ARP), a $1.9 trillion COVID relief bill. While the attached includes key insights, it lacks the detail needed for a thorough analysis. Of note, the ARP would raise the federal minimum wage to $15 per hour and eliminate the tipped wage (see below for additional details).
Speaker Pelosi and incoming Senate Majority Leader Schumer swiftly endorsed the proposal, encouraged Republicans to support it, and pledged to work on its passage. Mr. Biden has suggested that he would like to see it enacted by the end of
January with bi-partisan support.
Some senators from both sides of the aisle have expressed concerns over the proposed legislation as reported over the weekend by the Wall Street Journal and Politico.
Following are some of the ARP’s key elements as the plan was initially presented:
Federal Minimum Wage
  • Raise the federal minimum wage to $15 per hour (no details on a timeline and/or phased-in approach).
  • Eliminate the tipped minimum wage.
  • Eliminate the sub-minimum wage for people with disabilities.
  • No further details are provided for consideration of this proposal. We are, however, informed by Democratic senior leadership staff that the minimum wage increase will likely not be tied to a post-inauguration COVID bill, as they do not want to bog it down; and that the minimum wage debate will likely occur in the House in February, and the Senate in March.
OSHA COVID-19 Protection Standard
  • Calls on Congress to “authorize OSHA to issue a COVID-19 Protection Standard that covers a broad set of workers” to protect them from the virus.
  • Organized labor has pushed heavily for this safety standard.
  • As authorized, OSHA would promulgate an emergency temporary standard pursuant to its statute but there are no details provided as to how far reaching the standard would be. We suspect, however, it could be very similar to the recently issued overreaching California safety standard.
  • Increases funding for OSHA enforcement and grant funding.
  • Given the lack of legal liability protections in place for employers for exposure-based claims, the overlay of this safety standard on employers is concerning and potentially opens the flood-gates to potential litigation.
Emergency Paid Leave
  • Extends the emergency paid leave requirements contained in the Families First Coronavirus Response Act to September 31, 2021, and eliminates the 500 employee threshold, mandating all private and public sector employers to offer paid leave.
  • It would also, eliminate the safe harbor provision for covered employers with less than 50 employees.
  • It only extends the refundable tax credit for employers with less than 500 employees.
  • Additionally, it would provide over 14 weeks of paid sick and family and medical leave for parents to take care of their child and family members under certain conditions.
$15 billion in grants to small businesses
  • We do not have details yet on these grants.
Community Credit Corporation Assistance – Restaurants
  • Calls for providing a bridge to recovery – including through the Community Credit Corporation at the U.S. Dept. of Agriculture – for restaurants, bars, and other businesses that have suffered disproportionately.
  • We do not have details yet on what he will specifically propose.
$35 billion in government funds to leverage $175 billion in additional small business lending and investment
FEMA Empowering Essential Deliveries (FEED) Act
  • This Act would leverage the resources and expertise of the restaurant industry in helping to get food to families in need and laid-off restaurant workers back on the job.
  • The FEED Act would authorize the Federal Emergency Management Agency (FEMA) to approve state, local, and Indian tribal government plans to partner with small and mid-size restaurants and nonprofit organizations to provide nutritious meals to individuals in need.
  • We called for passage of this legislation in our Blueprint for Restaurant Revival in July 2020.
Direct Checks to Individuals
  • Increases direct financial assistance to $2,000 by an additional $1,400 per person in direct checks (that is in addition to the $600 per person that Congress authorized in December.)
Unemployment Insurance (UI)
  • Extends expanded unemployment benefits through the end of September, with an extra $400 weekly supplement.
Eviction and Foreclosure Moratoriums
  • Extends eviction and foreclosure moratoriums and continues applications for forbearance on federally-guaranteed mortgages until September 30, 2021.
Increases to the Child Tax credit
  • Increases the credit to $3,000/child ($3,600 for a child under age 6) and qualifying 17-year olds as children for the year.
National Vaccination Program
  • Creates a national vaccination program in partnership with states, localities, tribes and territories; and will include the launching of community vaccination centers around the country and deploying mobile vaccination units to hard-to-reach areas.
The ARA can probably be best characterized as President-elect Biden’s opening salvo for the next COVID relief package. He will likely face substantial resistance from Republicans, and Democrats, to certain aspects of his plan. For instance, the minimum wage increase – which we are, of course, extremely concerned to see included – is particularly notable as it would raise costs on businesses at a time when they are already struggling to survive.
 
We will remain vigilant in working to ensure that the legislation is as favorable for restaurants as possible. That includes working to remove pieces that would be harmful to our industry and supporting the inclusion of pro-restaurant provisions.
 
Build Back Better Recovery Plan
Biden also indicated in his speech that the ARP is part one of a two-part economic recovery agenda, the second of which – his Build Back Better Recovery Plan (BBBRP) – will be discussed next month in his joint session of Congress speech. He previewed his BBBP stimulus plan by suggesting that it will focus on:
  • infrastructure and manufacturing,
  • innovation,
  • research and development,
  • clean energy,
  • investments in the caregiving economy, and
  • investments in skills and training