The Biden Administration unveiled the American Rescue Plan, a package of payments, tax credits, benefit increases and extensions, grants, loans and other types of funding support intended to keep the U.S. economy afloat by limiting the economic fallout from the COVID-19 pandemic. Many of the Rescue Plan’s programs are targeted to last through the summer, providing enough time for vaccinations to begin a return to more normal conditions.

The price tag, at $1.9 trillion, would make the Rescue Plan the second-largest stimulus package in U.S. history after the CARES Act of early 2020, and it equals 9% of annualized gross domestic product (GDP), as measured for the third quarter of 2020. All told, the Rescue Plan would appropriate more than $1 trillion for direct financial relief to Americans.

The Paths to Passage 

Unity, an increasingly scarce commodity in Washington, DC, has been earning some attention in recent weeks, and Biden has stressed that he’ll seek bi-partisan buy-in to all of his plans. Ten Republican senators would need to approve the Rescue Plan, assuming the entire Democratic caucus also voted in favor, to hit the 60-vote threshold for regular legislation to pass through the U.S. Senate. This 60-vote threshold is a product of the filibuster, which is a debate procedure that enables Senators to indefinitely delay the consideration of a law.

If 60 votes are unattainable, Democrats can use the reconciliation process in the Senate to pass legislation with a simple majority. Reconciliation measures are limited to budget-related legislation, meaning they must change the level of spending, revenues or the debt limit. Furthermore, each of these three budget categories may only be considered via reconciliation once per fiscal year.

Budget reconciliation measures follow an expedited path that caps Senate debate time at 20 hours and limits the types of amendments that can be introduced1. If no Republications vote in favor of the legislation, Democrats would need to vote as a bloc, and Vice President Harris — as President of the Senate — would cast the deciding vote in the event of a 50-50 tie.

In summary, Democrats can use a reconciliation measure to enact the Rescue Plan’s spending and revenue changes with their slim Congressional majority. And while this package is the new administration’s top priority, the reconciliation path is complicated from a procedural standpoint, so it may run up against the current March-end expiration for several of the underlying programs.

Download the full commentary for a closer look at the Biden Administration's fiscal priorities and to continue reading about its longer-term economic recovery plan.

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