Susan Hoffman: Good afternoon. I’m Susan Hoffman, the director of the Osher Lifelong Learning Institute. And we’re delighted that you can join us. This will be our last lecture event for the spring term. And we’re really delighted to bring you labor lawyer, Bill Sokol, who is not only a lecturer at San Francisco State. He is one of our renowned OLLI faculty members who’s teaching the Supreme Court this term. He is also a gubernatorial appointment to the CalSavers Retirement Investment Board. And many of you will recognize his voice from his years on Pacific Radio. He’s from the law school here at Berkeley. And today, he’s here to talk with us about the America Rescue Package Act. Bill Sokol.
Bill Sokol: Thanks so much, Susan. And thank you all of you who found a few minutes to join me on a Tuesday afternoon before. What I want to talk about is what I think is an incredibly spectacular piece of legislation, perhaps the largest deepest broadest piece of social legislation since the New Deal. And certainly, since the LBJ Great Society more than half a century ago.
The American Rescue Plan Act, we call it ARPA, is so deep and so varied that I think most of us haven’t had an opportunity even to figure out what’s all is in it. And for reasons I could imagine, but I don’t know for a fact, it’s being soft pedaled right now. It hasn’t been brought up with a lot of fanfare. And therefore, I think too many people do not know what’s in it, but we should, because unlike the CARES Act that was passed in March, 2020, that was the first big $2 trillion act to deal with the COVID crisis. That was a top-down act, hundreds of millions of dollars, literally billions of dollars going to large corporations and the idea it would go to them and go top down. Didn’t work too well.
So, this time the Biden-Harris Administration has done a bill, another $2 trillion, that goes from the bottom up. Now what I mean by the bottom up is what they’ve tried to do is make sure that the money is going to working people and working people’s families in a way that no social legislation has come close to imitating. And as I say, since at least LBJ, but it really looks New Deal-ish. And I think the Biden-Harris Administration said, what happened in those first 100 days of FDR and can we do some kind of imitation of that? I think Biden also realized the valuable chance that was lost in the 100 days that he and Obama first came into office in 2009. And so this came in immediately. You recall it was a 50-50 vote. Vice President Harris cast the deciding ballot, and boom, his has become legislation law. This is the law of the land now.
What I want to show you is the bottom up. On this one slide that I’m showing you first, I’ve tried to encapsulate more or less what’s in this bill, but I would say it’s less rather than more, because there’s so much in it. $1,400 cash payments. We’ll talk about them, unemployment benefits increased, extended reimbursable paid sick leave. We’ll talk about all of these. Extended reimbursable paid FMLA, extended Obamacare, financial aid for children and childcare like we have never seen before from the government, financial aid for defined benefit pension plans. And that’s only one column. On the other side, you can see financial aid, huge buckets of money for essential workers, small businesses to help people with their rent and mortgage, to help people with education, K through 12, as well as higher education, financial aid for state and local governments, workplace safety, even for unions. It’s quite an extraordinary bill. We’re going to hop, skip and jump.
I’m just going to try to give you an overall picture so that both you and the people you talk with have some better idea of what they can take advantage of. Anyone who knows someone who’s unemployed, who’s been through COVID in their family or friends, who has problem with rents, mortgages, their small businesses, there’s something here for all of them. First, a disclaimer though, 626 pages long, complicated, ambiguous. There are thousands of pages of rules and regulations yet to come. They’re pouring out right now daily. So there may be, the slide says maybe errors. I’m relatively confident I’ve made error somewhere in here. So I’m alone responsible, but I hope I’ll give you somewhat of an accurate picture.
We’re going to do it in three parts. The first part is direct aid and support that’s going directly to working people and their families, not their institutions, not their businesses, just to workers themselves. The first thing, of course, I think we do know about this one, $1,400 checks, cold cash going out to every adult and dependent. If their adjusted gross income is up to $75,000 a year, or if someone files their tax return as a head of a household, it can be up to 112,000. If spouse spouses filed jointly, it can be up to $150,000 for the spouses jointly. Any income up to that level and adjusted gross income, you’re getting the $1,400 check. Over one million checks have been sent out already either by direct deposit, if that’s how you pay your taxes or by mail. You have to have a social security number to get it. So it’s not for the undocumented. This is federal money and they’re much more anti-immigrant, if I may say it, than the state of California.
But I want to point out something here that’s really important, for anyone you know who has made less than $75,000 or less than $150,000, the question is well, made it when? And here’s what’s key. The IRS to determine who gets the checks looks at your last tax return. If you file a tax return in 2019 when the economy was still going full force, you may have made more than $75,000, but in 2020, you made less, well, they will look at the 2020 if you have filed it, they’ll look at either one. So anyone you know who hasn’t filed their tax return for 2020 yet because they moved the date to May 17, they should file it as soon as possible so that if their income took a drastic drop in 2020, they’ll get that $1,400 check. And that’s been a few billion dollars spread out in economy to those who spend it most immediately and kickstart the economy. These are people who use it for food, for rent, for children’s clothes, for the essentials, right? So it’s money that really gets the economy going. It doesn’t go for stock buybacks.
Unemployment benefits have been extended. You’ll recall these were pumped up way back in the CARES Act. Then they were knocked down in September of last year and they were going to expire by March 15 of this year. That’s part of the reason this law was passed and enacted, signed so quickly. By March 11, the president had signed it so that unemployment benefits will not be cut off. What’s happened? They’ve been extended another 25 weeks until September 6th of this year. Meaning some people make it up to 59 weeks of unemployment benefits.
In addition to the unemployment benefits, your unemployment benefits usually are about two thirds of your paycheck up to about a $1000. They’ve added on $300 per week onto whatever your benefit is. So whether you get $1 or $400 in your unemployment benefits, you get an additional $300 per week for the whole period from March 14th when it would’ve ended all the way through to September 6th. And it’s critical to note that for the first time, starting with the CARES Act, this is available to “independent contractors,” gig workers, people who work for themselves. It’s not just if you’re an employee. So all of those folks were entitled to these pandemic benefits.
What was also thrown in as a little extra goodie in this law that was just passed, people spent their unemployment benefits and realized, “Oh, my God, I have to pay taxes on my unemployment benefits.” Well, this law says on the first $10,200 in unemployment benefits, no tax is necessary if you were earning up to $150,000 in your job. A little footnote, there’s been a lot of, I think of it as noise the last few days, “Oh, my God, the unemployment benefits are too high. They’re so high that people don’t want to go back to work.” And so states like Montana, North Carolina, Arkansas talking about cutting the extra $300 a week, as they have a right to do.
I just want to point out as someone who works with unions, with working people all over the West, people are not refusing to go to work because somehow they like living on unemployment benefits. The reason people, a lot of people aren’t going back to work, they’re being asked to go to part-time jobs. All that fast food, nobody wants to employ someone more than 30 hours a week because then you’d have to pay them medical benefits. So people are being asked, come back to your part-time job with terrible pay and awful work conditions. It’s easy enough to get people back to work, make for good work conditions and good pay, people will be happy to come back to work, but to come back someplace where folks are not wearing masks and they cough on you and they give you a hard time and you’re barely making enough hours to get by. Again, it’s lousy miserable work. Give me a break. It’s not about unemployment benefits.
So what else is in this? This one is really big. This is an extension of something that already existed. People can get up to 12 weeks. Think about that. 12 solid weeks of emergency paid leave, paid to care for children because their schools are closed or to care for someone who suffered from COVID-19 or for those who have COVID-19 or had to quarantine for it, or for the time you have to go get the vaccination, you can be paid, recovering from a vaccination if you have a strong reaction, you miss a day or two of work, or if you’re told because of there’s been some contact, stay at home and quarantine, you’re eligible for this extended paid leave. It’s equal to what you’re being paid when you’re working.
Now, there’s a catch here. You see at the top, it says voluntary. What that means is, it’s up to the employer, no employer must do this. They can do it if they want. And if they do it, every dollar they pay out will be fully reimbursed by the government, either as a tax credit or reimbursable check, refundable check if their taxes are too small. In other words, this is free to the employer and it helps workers get through COVID 12 paid weeks.
In addition to those 12, there are another additional two paid weeks of sick leave. This is for anyone who’s been employed 30 days, right? Must be employed first 30 days. And then you can get two weeks of paid sick leave. This two weeks is also up until now, it’s been only for certain range of employers who had more than 50, less than 500. Now any employer, less than 50 employees, more than 500 doesn’t matter. Also, all federal employees are eligible. Again, it’s voluntary, provides a refundable tax credit. Whoops, that’s the FMLA. Here’s what I’ve been talking about and using the wrong slide. Okay. Crank it. Here’s this extended paid sick leave. Okay. For up to $511 a day, right? So we’re going to try to get you up to your full pay for the time you’re using to care for yourself. If you’re caring for your children, up to $200 a day, okay? Again, voluntary, up to the employer.
Now that was by way of introduction. I’ve told you about, okay, here’s all this wonderful $1,400 checks, here’s 12 weeks of paid leave, two weeks of sick leave in a way enough already. We have just begun the real heart of this bill, the part that’s most important, I’m going to talk about now. This is aid to help children out of poverty. I don’t know what to say. The fact sheets that came out from the White House say that if all these aspects of this law are fully taken advantage of, this will lift at least half of the children in America who now live in poverty out of poverty.
So let’s look at what it does for children. Number one, there’s a child tax credit. It was yet when you do your taxes, you could deduct $1,700 for each child you had. Now that’s been increased to $3,000 per child or $3,600 if your children are under six. But here’s the part of this that’s most wondrous and newest and most unexpected. Many of the people who are eligible for this, families earning less than $75,000 a year are eligible, many of them don’t do itemized taxes, get no advantage out of the tax credit. And so what the government has said is this is a fully refundable and advanceable child tax credit. In other words, they’re going to look at your tax returns, they’re going to say, okay, we’re going to estimate what your taxes are going to be. And if this isn’t going to help you as a tax credit, we aren’t going to send you a monthly check for up to 3,600 a years, $300 check for each month, you’re going to be getting that check. Okay.
So, what we’re looking at is families for the year of 2021 only earning less than $75,000. Literally hundreds of thousands of them will be getting checks for either $112 to $3,000, 275, 280 a month, or 300 a month to help them with the kids. In addition, there’s an expanded childcare tax credit, okay? The child care. Now we’re not talking about directly for child, but for childcare, it expands the child dependent care tax credit. So, if your family earns up to $125,000 a year, it allows the family to take a tax deduction for up to 50% of their childcare expenses. That’s up to $4,000 for one child, 8,000 for two children. Again, that’s only through 2021. Now the Biden-Harris Administration said, we want to make all these benefits of having to do with children permanent, but all they could get through is for one year, let’s start thinking about choices people when they go into the election cycle in 2022.
There’s more. That’s not all. $39 billion more for help to children and families in need. $15 billion is going to go in cash grants to low income families of essential workers, direct money to them. $24 billion will go directly to the states so that they can improve childcare provider’s salaries and benefits so that we not only have childcare available to the families, we have decent wages and benefits for the people who will provide the childcare. In addition, that extends what I call the food stamps program. It’s now called Supplemental Nutritional Aid Programs, SNAP, automatically. Anybody’s getting food stamps gets a 15% increase in what they get via this law.
In addition, I’ll talk more about this in a bit, $30 billion for rent assistance, 10 billion for mortgage assistance. Now I know by this time, if you’re like me, we’ve been inundated with dollar amounts, different kinds of benefits, different dates for them. The point here isn’t take this all in and remember it. You don’t have to take notes. This’ll be posted. This PowerPoint will be posted for OLLI. We’ll make it available to you. What I want you to get a sense of in this hour we spend together is how broad, how deep and how remarkable this piece of legislation is. And I say that as somebody who for many years in my youth used to say, Democrats, Republicans, Tweedledee and Tweedledum. Obviously, no longer a Tweedledee, Tweedledum situation. How do we summarize what serves the kids? Refundable and advanceable child tax credits, that’s checks you get each month, childcare tax credits, direct grants of money to low-income workers who are essential, grants to the states to pay childcare providers, expansion of food stamps, rent and mortgage aid. That’s extraordinary.
And now look at this. I drop this footnote. This one is, it knocks me out anyway. You start thinking about that family in need, $1,400 checks. Let’s take a family of four. Let’s assume they have two kids under six. They’re going to get those $1,400 checks. Not just for dad, not just for spouse, but for both spouses and each of the children. So that’s $5,600. In addition, they’re going to get 3,600 a year for each of the two kids. That’s another $7,200. That’s $12,800 a year. Plus there’s a childcare tax credit so they can use some of this so they can have some childcare. It’s starting to look a little bit like what we call UBI, universal basic income. The Andrew Yang flag that he was waving during the presidential election. It’s only good for one year. Biden-Harris wants to make it permanent. I would imagine we’ll hear a good deal more about this as we roll into the election season. That may be part of the reason the drums aren’t rolling loudly right now. Maybe some of the firepower is being kept for later.
Now, remember I was saying help for rent and help for mortgages. Here’s the way that works. $22 billion in this bill for emergency rental assistance on top of $25 billion that was made available in December. To get it, if your income is no more than 80% of your area median, at least one person is at risk of homelessness, one must qualify for unemployment benefits or suffered COVID-related hardship. In other words, if someone in your house is in risk of homelessness or someone’s getting unemployment benefits, or someone had suffered some kind of COVID-related hardship, you’re entitled to help with rent so you’re not evicted. In addition, there’s $10 billion to help with mortgages and utilities for homeowners so that they don’t face foreclosure. So those who are paying off their homes, lost their jobs, desperate to make sure they can make that monthly mortgage, $10 billion is there and ready to help them. That’s a brief. That’s part one, just a brief look. And I’m really just hopping, skipping and jumping along the surface. There’s a lot more, but that’s a little taste of what’s available directly to workers and their families.
Now I want to talk about healthcare and pensions, workers benefits, what this law does in this neighborhood. Once again, big changes, big benefits. First of all, a lot of free healthcare what’s called extended COBRA Coverage. COBRA, by the way, people know there’s such a thing as COBRA Coverage, but they often think, oh, it’s got something to do with a snake or a snake of healthcare, it extends. No, no, no. That simply stands for, I’m sorry to say, Consolidated Omnibus Budget Reconciliation Act. It was an act passed way back when Ted Kennedy pushed it through the ’90s.
And what it said was when you lose coverage from your group health plan, most Americans still get their healthcare through an employer sponsored plan or through a union employer sponsored plan. It’s a group health plan. And if you lose it because you lose your employment, your substantial reduction hours or you’re just laid off through no fault of your own, you can get up to 18 months of coverage if you pay for it yourself. Now, it’s great, but it ain’t that great because what usually has happened is not many workers can take advantage because when they lose their job, they don’t have the money to pay for the healthcare.
What this law said is, look, we understand that situation and we know that millions of workers have lost their jobs through no fault of their own, had their hours substantially reduced. They really need healthcare in the midst of a pandemic. This is when they need it most. And so the government has said to all of those group healthcare plans, employers, unions plans, offer free six months of healthcare from your plan for April through September, April, May, June, July, August, September, give them free health care. And the federal government will reimburse you for any free health care you deliver to all of those people who lost work anytime really from November 2019 onwards. Okay. That’s all going to be reimbursed by the federal government. So anyone who was on an employer health care plan, lost it, couldn’t afford it, when they first were offered COBRA said, sorry, can’t afford it, new notices have to go out and they have to be given the opportunity to get the six months free. Okay.
That’s one piece of health care. A whole other piece in this law has to do with the Obamacare marketplaces. You know that, well, let me go through this. I have in the slide, let me spend a minute on it just to help out. Here, you’ll recall is what Obamacare is about, what those marketplaces that are available. In California, we call it Covered California. You can look at it at coveredca.com.
For anyone whose employer does not provide them healthcare benefits, and that’s millions of people because Obamacare doesn’t require employers to provide it for part-timers, temporaries, early retirees. There are whole other lists of people who can’t go to the marketplace. The most important being those literally millions of part-timers who work in jobs, where employers deliberately throughout the retail industry, restaurant, hotel industry keep them below 30 hours so they’re part-timers, they can go to the Obamacare marketplace.
And how much you pay is tied to the federal poverty level, which is right now about $13,000. If you were below 138% of the federal poverty level, you could get free Medicaid except in the 12 states, the Confederacy plus a few others, or if you made over the federal poverty level, but less than 400% of, in other words, less than about $52,000 a year, then you could get tax credits and subsidies that would make healthcare much less expensive if you bought it at those marketplaces. So what are we saying? No healthcare from your employer, go to the marketplace with subsidies and tax credits, you can buy a very inexpensive policy if you made between somewhere in the neighborhood of about $13,000 and $52,000 a year.
Here’s what this law does. It says, number one, anybody can go and buy their healthcare at the marketplace. Doesn’t matter what your income level is. If your employer doesn’t provide it, you can buy it and take advantage of the tax credits and the subsidies. Now, some people said, wait a minute, that means really rich people can go get the deal. Not really, because they’re going to have to pay at least 8.5% of their income, it’s easier and cheaper for them not to use Obamacare if they’re wealthy.
But here’s the killer part. If you are unemployed, getting unemployment benefits, or you earn below $19,000, 150% of the federal poverty level, free, zero cost 70/30 Silver plan at Obamacarecoveredcalifornia.gov. And the enrollment period, what the Trump folks did is they said, okay, go to the Obamacare marketplaces, but during this very narrow 30-, 60-day open enrollment period. Now the open enrollment goes through August 15, anyone unemployed or earning less than $19,320, free healthcare, go to coveredca.com, get the Silver 70/30 plan. Now that has been extended for two years. That’s going to go through the November 2022 election and millions of people are coming onboard, okay? The Obamacare altogether serves about 15 to 20 million people. They’re going to have a choice to make come November 2022. You want to continue to have free healthcare, you want to continue to have low priced healthcare, your choice. You’ll have a very clear choice on this.
Pensions. I’m going to do this one quickly. It’s pretty obscure stuff, but there’s one important part about it. $86 billion goes to the treasury, it’ll give it to the Pension Benefit Guarantee Corporation, the PBGC. They’re going to use the money to fill up underfunded defined benefit plans. Those are mostly union employer joint plans that got in trouble in 2008 when the market crashed, suddenly they were deeply unfunded. And what this does is put the money into, there’s somewhere between 185, 260 pension plans that are in deep trouble. And those plans are going to get enough money out of this $86 billion. So that number one, they can give their participants full pensions through the year 2051, 30 years. Number two, if they had their pensions cut sometime in the last six years, that’s going to be restored, they’re going to be reimbursed a fat check for all the cuts they suffered during the last six years.
Now, why does this matter? The single largest most disastrous joint pension fund in America is that what’s called a Teamsters Central State Pension Fund. That’s Jimmy Hoffa’s old funds. Throughout the Midwest, all those thousands of truck drivers who were union, the fund shrank and got worse and worse. Didn’t really have to do with the fact that he loaned money to Vegas and bowling alleys and all that. Definitely happened, very old business. The reason it got in trouble is because when Ronald Reagan deregulated the trucking industry, we had “independent contractors” driving trucks all over America no longer putting money into the fund. So what you had was a group of pensioners that didn’t have actors putting in more money because of the deregulation. What is happening is literally tens of thousands of retired truck drivers across the Midwest are going to be seeing their pensions restored by the Biden administration.
And I ask you what happens in 2024 when, they’re out there in the Midwest. These are white working class folks by and large, mostly men. We’re talking about Wisconsin, Michigan, Pennsylvania, Indiana, Kentucky, Tennessee. It’s going to be interesting to see how they vote. Not an accidental part of this law, me thinks. Okay.
Let’s go onto the third piece of this law. If you’re like me, you’ve already lost track of what I was talking about in the beginning. It’s so deep. It’s so broad. It’s so wide. You can see why I’m saying. This really is quite a sensational piece of legislation, one which I think we have to grasp, we have to figure out what it’s about, because for example, with the money available for rent and mortgage, there’s articles recently saying people aren’t getting the money because they don’t know about it. So we’ve got to get the word out. I’ve been doing this the best I can and hope you will too, to share with everyone you can, look, all of these benefits are available, you got to know about the American Rescue Plan Act, ARPA.
Part three. Now we’re going to look at big chunks of change for entire groups. I’m going to move through it quickly, but you’ll see it’s ridiculously broad and deep. Number one, there are these things called Earned Employee Retention Credits, okay? Well, that’s wrong. It shouldn’t say Employer Retention Credits, it should say Employee Retention Credits, okay? Those have been extended through the year of 2021. Very briefly what it says is any business that had a decline in its gross receipts of 20%, compare the first quarter, second quarter, third and fourth quarter of 2021. Compare that to the quarters in 2020. In other words, all those businesses that took a hit because of COVID and their receipts went down at least 20% and they’re smaller businesses, less than 500 employees. This is not for the big dogs, big corporations making money hand over fist. This is about the smaller corporations and companies, businesses that are really hurting.
The idea is if you keep someone on, if you retain an employee, you can get up to a $7,000 tax credit, for each of those two quarters, get 70% of their wage and health costs. What we’re really saying is you can get $7,000 per quarter. That’s up to 14,002 quarters. It’s going to be extended throughout the year. Translation without all the fine print that you can look at later on the slide show, translation, small businesses, including nonprofits, if they keep someone on the payroll, they can get this recovery of up to $7,000 per worker per quarter, based on what they’ve paid them for wages and benefits. That’s a chart that you’re going to look up later that tells you all the details.
More aid for small businesses. And here, that last one and this one, when we talk small businesses, we’re also talking about the many nonprofits. Many of us have worked with or are on boards of or help with or volunteer for nonprofits. And we know what big trouble they’ve been in trying to get contributions and donations in this very difficult time. There are now $15 billion available for quick emergency grants to small businesses. It’s called the economic injury disaster loans, EIDLs.
In addition, that Paycheck Protection Program. That was what happened in CARES Act in a big way. Billions and billions, hundreds of billions of dollars literally, I think it was $360 billion or so, would be given to corporations. And the theory was you will get, basically if you use this money for people’s wages and benefits, your rent and utilities, the federal government will let you write that off of your taxes. Well, this time you’ll see there’s only $7.25 billion in the Paycheck Protection Program. But what they’ve done is they’ve expanded it so that it includes small businesses, and in particular non-profits 501 C3s, 501 C5s, and we all know what a disaster is happening for small restaurants and bars, $28 billion, just for grants to small restaurants and bars that have had a hard time making it through COVID, including $5 billion for the smallest of those with less than $500,000 revenue in the good year of 2019. So this one has focused on that part of the economy and said, let’s help that sector especially.
In addition, money to finally improve workplace safety, $200 million to the Department of Labor for pandemic related protection programs, $100 million is going to go to OSHA. So there can be OSHA enforcement worker training, especially emphasis on enforcement in high-risk sectors like meat processing, those plants, where it ran wild out there in places like Nebraska, as well as in healthcare, prisons and agriculture, money that’s focused with OSHA to make sure that those places keep their workplaces or prisons safe.
Now we know that state local governments have been hammered, just completely hammered by losing so much in the way of tax revenue. We found out yesterday and today, California has managed to do very well the state, but various municipal budgets if you look at a city like Oakland in big trouble. $350 billion of this bill is going to go to state and local governments, territories and tribes. This, the Republicans fought tooth and nail. They use this as the reason to oppose the bill so that none of them would vote for it. They said, governments don’t need the money. It’s to address the negative economic impacts of COVID-19, to replace lost revenues, delayed revenues, recover costs they had to pay to deal with COVID, more police, more first aid and so on, but it also says it can’t be used for public pension contributions, is for immediate economic disaster caused by COVID-19 over the last year.
More about the public sector. $30 billion to transit agencies so that the money is specifically so they can keep drivers, mechanics, employees on the payroll and use it to buy more personal protective equipment for all the workers on public transit routes. In addition, $1.7 billion for Amtrak, so they can bring back employees and restart more routes. $50 billion for the federal emergency, FEMA disaster relief fund, because we know part of what this bill recognizes is there are going to be more climate disasters, hurricanes, tornadoes, fires, floods. It’s coming this year, just like it did last year. $50 billion was set aside knowing that climate change is upon us and must be dealt with. $8 billion set aside just for airports so they can keep people employed. $15 billion for wages and the benefits of airline employees, because they’ve been so disastrously hit by COVID. $3 billion for airplane manufacturers payroll support. What does that mostly mean? $3 billion to Boeing so they can keep all the employees on the payroll while they wait to rev up production again, okay?
Supporting education. This is a special one, especially now as we talk to lots of people in the UC Berkeley community, $125 billion that goes to K-12. That money is to help with heating, ventilation, air conditioning, personal protective equipment, all the additional supplies, the special needs of teachers, of classrooms and schools so they can open up again. And as you know, most children are going back to school again, the schools have reopened across the country and it is in good part because this money was made available immediately from the federal government to school districts throughout the land so they can pay to make the changes that have to made to get children back into the classroom. And additional $40 billion is going to higher educational institutions to colleges and universities. At least half of that has to go to emergency financial aid grants directly to students. In other words, $20 billion of this has to go to students who need it for food, for rent, schools, just surviving.
And I was saying to you at the beginning, thousands of pages of regulations coming down every day. Today’s news, today, I just put this in the slide show today. It was announced by the Department of Education, Federal Department of Education that these $20 billion in emergency grants will be available to undocumented students and international students, as well as students who are born and raised in America. The short of it being the Secretary of Education said, “Look, COVID didn’t pick people based on what passport they carry, okay? So we have to help all these students survive this experience.” And then there’s a little bit of minor student loan relief, not what we’re really looking forward. If you get forgiveness, you get some tax relief on that, not going to spend any time on it.
Support for essential workers, a whole other sector that has a special chunk of change. $7.6 billion are going to be used to hire a 100,000 full-time employees into the public health workforce. We are going to have here in the United States 100,000 new public health workers because of this law. $46 billion plus $20 billion to address COVID directly, testing, contact tracing, PPE, personal protective equipment, vaccine distribution and administration. This is the money that is being used and has been used immediately and widely to begin to vaccinate everybody in America who’s willing to be vaccinated. And now the money, some of it’s going to be used to encourage people who haven’t wanted to be vaccinated to be vaccinated, small mobile units, going to be small vaccination places set up where people can go in without an appointment, just stop by and get vaccinated. This money is helping do that. And there’s so much more. I could go on and on this way.
There’s funding to support purchase and distribute vaccine to everybody, there’s funding for the Veterans Administration to meet the health needs of veterans, including waiving co-payments for treatment, there’s funding to enhance what’s called the earned income tax credit. It was tripled. That’s for low income people get an income tax credit and actually a refund, money in the bank, money in their own pockets. Funds for family farms, including $5 billion for farmers of color, the recognition that there are Black farmers throughout the South trying desperately to hang on to their family farms, $5 billion to help them. Funds for community healthcare centers, funds for community mental health service centers and funds to strengthen cybersecurity. We know in this week’s news needed more than ever. I could go on and on this way.
As I’ve said, there’s no end to the depths of social legislation packed in this bill. At some level, I feel like I’m seeing what all of those students in schools of public policy and the law schools and social work schools, all those college kids coming out, here’s what they’ve been working on. All the folks who are left adrift after the Obama administration lost everything they could think of packed into this, but we may go further, okay?
First let me summarize. Here’s what I’ve covered for you. A lot of cash in hand for people who need it most, and will spend it immediately to kickstart the economy, a direct massive attack on COVID-19, overcoming all the miserable errors and mistakes and deliberate and willful misconduct of the last administration, expansion of healthcare for workers, the expansion and protection of pensions, massive direct aid to small businesses and nonprofits, support for state and local government, public transit systems. You see why I describe this as federal aid on an unprecedented level to sustain those in need kickstart our crippled economy money from the bottom up, not from the top down. This is very much not a result of the trickle-down theory.
Now I could stop now and say, are there any questions, but I’m going to ask for your forgiveness and I’m going to apologize because what I want to go on to as briefly as I can in the few minutes remaining, I want to show you now what’s aspirational, I want to show you the next two bills, the next two gigantic pieces of legislation that the Biden-Harris Administration is trying to move through Congress right now. There’s spirited debate about it. It could be, these are going to be 50 plus one bills, where there’s going to be negotiation really among Democrats. And anything that all 50 will vote for in these acts, we’ll go through.
But I want to show you the American Families Plan very briefly and the American Jobs Plan Act. These ones, we don’t know what’s going to happen to them, but I want you to see as these development, we see more news, a broad overview of what may be coming. $2 trillion more to help working families, much more for childcare. Okay. Universal preschool for all three and four year olds, that’s joint state federal program, call it 50/50, prioritize high need places, more money for kids’ meals. Make that child tax credit permanent, make the childcare tax credit permanent.
Much more for higher education. $109 billion in this bill. So there’ll be two years of free community college for anyone who makes it through high school, right? Five and a half million students would be eligible for this money for two years of subsidized tuition for low-income families, students enrolled in our historically Black colleges and other minority serving colleges, enhanced Pell Grants, billions of dollars to help teachers earn specialty credentials, billions of dollars for teacher mentorship programs, scholarships for people becoming teachers, 12 paid weeks of family medical leave as a permanent part of our social structure, whatever you want to call it, safety net.
This is the reintroduction. As you can see this act and the one we just talked about and the next one I’ll talk about, the reintroduction of the idea for new generations that the government is here to help. You know that when Ronald Reagan came in, he just pounded government. He and the Republicans pounded government for 40 years, they talked about, “Oh, government is the most terrible thing.” And for some reason, Americans again and again elected CEOs who were determined to destroy their own businesses, presidents who didn’t want to build the government and make it better for people. We now have new generations who are not particularly interested in that.
And there seems to be for the American Rescue Plan Act that I talked about, ARPA, it appears by polling that more than 70% of Americans who are polled about it like what it stands for, including 60% of Republicans, which helps explain why Republicans are saying nothing about the act. They’re far too concerned about Dr. Seuss to say anything about this, because they know their own voters like this stuff. So anyway, they want over a 10 year period, make family and medical leave, 12 paid weeks a permanent part of employment in America, continued temporary free Obamacare for as long as necessary.
How to pay for it? Part of it, there’s the taxations you’ve been hearing a lot more about that than about the benefits and it’s inevitable manner. Our major media seem to read the Wall Street Journal and non-economic matters, reprint whatever the Wall Street Journal has to say. So we’re hearing all about how the top tax rate would be raised, capital gains taxes will be raised, hedge funds carry forward. They call it loophole. I call it scam, would be knocked out. The loophole for real estate investors like Donald Trump would be eliminated, and $80 billion to the IRS so they can actually enforce the tax code against high income earners. In other words, there’s a plan to actually not just spend, but actually collect money as part of this. And that’s a little taste, just the smallest taste of the American Families Plan Act, which is now being hustled, pushed through Congress.
Here’s the next big one beyond that. This is the infrastructure program we keep hearing about. A lot of talk about that during the last four years and nothing happened. The Biden-Harris Administration has already rolled out the broad overlay, a broad contextual paper on what the Jobs Plan would look like. It’s being filled in now by all of those people in Washington and the young folks who write specific language, it’s almost indecipherable to translate these ideas and concepts in a specific legislation.
This one, it may be largely aspirational, but I call it two-thirds aspirational. One third may be real because the Republicans are desperate to get as much pork as possible into their states. I mean, let’s be honest about it, are going to come on board the infrastructure. They walked in with a plan to spend about 650 billion, Biden wants about 2 trillion. So they’re already ready to spend about one third of what Biden’s willing to spend. So now there’s going to be a lot of horse-trading, but I think one third is already there and we’ll see how far beyond we go.
Very brief overview. A lot of money for transportation, repair roads, bridges, airports, seaports, trains, buses, climate change mitigation, creating, hopefully restoring clean water and clean air, expanding broadband to everyone in the country, particularly in rural areas, the same way we did with the postal service and the telephone, somehow expanding the electrical grid, updating it and make it available to all in cyber secure, a huge program to plug up abandoned mines and abandoned oil wells. It turns out there are literally millions of abandoned oil wells and thousands of mines that have been abandoned. Think about how that might play in a state like West Virginia, Joe Manchin country, that this bill has billions of dollars for people to basically plug up the mines and then restore the area.
Lots of money to do affordable housing, to refurbish and build new schools, refurbish and update our hospitals. Then a whole thing that’s called caregiving infrastructure, money for caregivers in our society, home service workers. Lots of money for research and development, R&D. Lots of money for the manufacturing sector for the small business sector, billions of dollars for job training. That’s just an overview. That’s my quick one slide. I could go on a long time. I’m going to just say to you, I think the better way to find our way through this so we can leave a few minutes for questions. If you want to type your questions into the chat, that might be the easiest way to do it. If you have any questions about anything I’ve said, I don’t know that I’ll be able to answer your questions, but I will at least try.
So here we go, just in the quickest way possible, $600 billion for transportation infrastructure and what’s called resilience. Infrastructure repairing, resilience, getting it to be green. That’s evidently is how we’re going to describe green, okay? Funding American electric vehicles supplies. Okay. Trying to build 500,000 chargers across the country for electric cars so that wherever you go in America, there’s always an electric charger close by. Imagine the work that generates for people to build those. We have to replace 50,000 of our diesel vehicles with electric vehicles. The plan includes electrifying 20% of all those yellow school buses all over the country. It includes electrifying the entire federal fleet, including the post office. Upgrading airports and water ports with an emphasis on climate improvement.
Resilient $22 billion was spent, lost as they say on climate disasters in 2020. They cost to deal with them $95 billion. So this plan includes let’s build back better, let’s create an electrical grid system, food supply system, urban infrastructure, health, hospitals, transportation assets that will actually be able to survive climate change, focus on above-code building in low-income communities, focus on better air, water. After a while, I begin to feel as I go through this, okay, it’s almost like a political pitch. This is all very nice, but you just make that up a lot of fancy language. The incredible thing is all of this has already been developed as proposed legislation. The wording is being written as Republicans and Democrats hassle about it. And frankly, as Democrats hassle with themselves, something’s coming out the other end. I’m showing you, if you will, all the raw meat, we’ll see some sausage coming out the other end. I can’t say quite what the sausage will look like.
Water, broadband, the grid. More on that, more on infrastructure targets. There’s just so much here. I’m just going to basically say a few words on the care economy. They want to expand in-home long-term care services via Medicaid, assuring union rights, higher wages for in-home service workers, because what we discovered in the COVID crisis, nursing homes, skilled nursing facility, those long-term homes, they don’t work well. When you take elderly, all of our elderly relatives and you pack them into those little places, we know that’s kind of a, and COVID has proved those are disaster zones. So the idea is we’re going to spend a lot of money so that our elderly relatives can stay at home and have home care workers come to them in their homes as a way to actually cost less because of all the healthcare costs attached to those skilled nursing facilities, it’ll cost less, provide better healthcare. A lot of money for research and development, particularly in biotechnology and artificial intelligence. A lot of money, $35 billion for climate science innovation. It just goes on and on.
Bringing manufacturing back to America. So much of our manufacturing is done in small companies with less than 200 employees. The idea is to give them as much money as possible to move as quickly as possible. And lots of money for job training, $48 billion to create up to $2 million new apprenticeships. I think I’m going to stop there because there’s also a Tax Plan to pay for all of that, okay? It’s on the slides, there’ll be at the OLLI site.
I think I’m going to stop there and say, I hope I haven’t exhausted you as much as I’ve exhausted myself, just trying to describe what’s in the American Rescue Plan Act, ARPA. All of that, that whole first part of slideshow, that’s real. That’s already happened. It’s in the law. It’s our job to make sure that all those who can take advantage of it know about it. As for the Family Plan Act and the Jobs Plan Act, you’re going to have to decide whether you want to participate actively and trying to get those enacted by writing, emailing, talking with your congregational representatives. Susan, I think I have probably exhausted everyone. There’s just so much there. I hope everyone’s learned a little bit of it anyway.
Susan Hoffman: Bill, thank you. Yes, it’s very comprehensive. And for me, I want to ask you a question I think that draws upon your American history and since I know you are a historian, did FDR when he rolled out many of these kinds of relief packages, what was the apparatus, the communication plan that began to really make people understand how really essential it was to the economy to beginning to balance the fact that so many things are off balanced right now around the income gaps, the infrastructure hasn’t been paid attention to because it hasn’t been seen as an essential service? I mean, there’s just so many ways that this plan has to be communicated. So I’ll ask that and then I’m going to look at the chat room and give you another question after you’ve answered that. Thank you.
Bill Sokol: Okay. Sure. Folks, if you do have any questions or comments or thoughts, you just tap on chat on the bottom of your screen and pumping what you want to, and we’ll get to as many of those questions as possible.
With respect to what happened in the first 100 days that FDR was president, let me try to answer your questions in this way. Number one, nobody knew what was going to happen, nobody was prepared really to oppose what was going to happen. And what they did initially, once again, was just roll out everything they could think of. Harry Hopkins, who was his right-hand man on social policy, a social worker, actually set up a table at the White House and was writing checks to get money out to help people survive, to developers, to builders, to contractors, they were making it up as they went along. To communicate what they were doing, you remember that was the era of the introduction of radio. And radio captured the nation. And FDR captured that form of communication, that format and mastered it with his regular weekly radio talks.
And so all America, millions of Americans, whatever their politics were, would tune in to hear the president tell all of them in the most personal way imaginable right there in their own living room, his voice, here’s what we’re going to do for you, here’s what the program is, here’s what the plan is. And at least the history I’ve read suggested that people could capture understanding either before or against it based on what they were hearing.
And we also have to remember in addition to that, there were newspapers in every community across the land, whether they were for or against what FDR was doing, every town had its newspaper, every little place in America had the newspaper. So the coupling of all those papers plus radio, we have a very different situation today. I’m not going to go into it because I know everybody has thoughts and opinions about what happens when you have such a plethora of sources and so many determined to do misrepresentation, create lies, false facts, fake news. What’s really happening now is not, oh gosh, there’s no way to communicate. The problem is there’s too many ways to communicate and you can’t get any single message through or so it would seem so. There’s a long answer to short question.
Susan Hoffman: No, no, no, no, it was a cumbersome question for sure. Bill, can you exit the slideshow so that the gallery gets populated with blackness?
Bill Sokol: Sure. Yeah, we can actually see people.
Susan Hoffman: That would be great. And then people write me the questions that are very much-
Bill Sokol: You want me to walk through them, Susan? I’ve got it here on my screen if you want.
Susan Hoffman: Okay. Well, since we only have five more minutes, let me ask you one question that I see that’s not related to the communication plan. Actually, now I see that there are two, how easy would it be for the GOP to reverse all of this if they win back the Senate in 2023?
Bill Sokol: Well, the best I can say is this, at least for starters, ARPA, is a piece of legislation that had been passed. That piece of legislation says, we’re putting this money out here, the money is being spent. Anything that hasn’t been spent by the beginning of 2023, the Republicans could introduce legislation and roll those programs back. They could in the same way that they went on the attack against Obamacare and tried to undermine and destroy it, they could try to do it with ARPA. And if there’s a Jobs Plan and a Family Plan, they could go after those two.
However, Susan, I think it’s really important to note with respect to Obamacare, they took one serious shot at it where John Kane turned it down. The rest of the time, they talked anti-Obamacare, but it was way too popular for them to really vote it down. I think the kinds of things that are in ARPA, would they really try to take all that money away from voters? They’ll talk smack, if you will, but I don’t think they’ll do much to actually take that away from people. I may be totally wrong. We’re just speculating about future politics. Anything else you want to touch on?
Susan Hoffman: Yeah, inflation. With this level of government spending, what’s likely to happen there?
Bill Sokol: Yeah, thank you. I’ll refer you to 1,000 economists, all of whom have 1,000 opinions on inflation. Here’s what I expect. I mean, this is time honored. We know this, that pigs are at the trough. If there’s money there, there will be lots of corporations that will be raising their prices any which way they can. We will see if that really is effective or longterm. What’s happening right now, the Republicans are often saying, oh my God, there’s going to be inflation, will be out of control. The Democrats are saying, Paul Krugman is the leading Democrat economist, you can read regularly. He’s saying, look, there’s going to be irregularities as we come back from pandemic, there’ll be some price increases here, there, everywhere. Copper’s a problem right now, microprocessors are a problem right now, some raw material, Procter & Gamble announced or raising all of our prices come September.
So there will be lots of companies, major corporations trying to take advantage of more money in the economy to try to get as much of it as they can. Will that lead to inflation? Depends on how fast the economy takes that money and does productive growth with it, right? If it’s used to create jobs and create productive growth, we’ll keep up with it, there won’t be major inflation, but I think nobody knows. And I’m the last one in the world to ask, what will really happen? It’s all up for grabs is my opinion.
Susan Hoffman: And the jobs report in April was not great.
Bill Sokol: Yeah, but again, one month job report, we thought there were going to be 250,000 jobs and only 66,000 jobs, one month’s report, we’ve lost track. It’s like the stock market, everybody wants to know every hour how’s the stock market doing. The truth of the matter is if people listening have any money in the market, it’s really for pensions and they need to know what’s it going to be like 10 years from now or 15 years from now. By the same token, I want to know how employment is doing over the next two years, not any one report. I think there’s a lot of, let’s go into the casino and bet on one number, and it’s not a good way to look at the economy. Anything else?
Susan Hoffman: Yeah. I’m going to squeeze in two more questions if I can. So these benefits are coming through the IRS, many of these initially, but other agencies are going be, other providers. So do you have any sense at all how the application, if there’s been a review of the application process to make sure that it says-
Bill Sokol: This the big problem certainly. There’s an infinitely difficult to get this money out to the people who need it. So that, for example, the Department of Education announces today, we’re going to use this $20 billion make grants available to students in need. We have to get it to them fast because they need it for food and for school supplies and rent. So that’s Department of Education. There’s going to be public information, I think, on campuses all over America, here’s the application you filed with the Department of Education.
Meanwhile, in the world of labor, for example, OSHA has a $100 million, so that they can do enforcement in workplaces. It’s going to be incumbent on union activists and worker activists to go to OSHA to file complaints to say, here’s where you’ve got to go, here’s the problems. There’s going to be money at the Department of Energy. There’s going to be money at the IRS. All these agencies are going to have their own processes. And we’re going to have to figure out those who need the aid, how do I get to the right agency to get the money I need? My hope, Susan, is that the feds as time goes on, will do a better job of publicizing for us one program at a time, here’s where to go and here’s how to get it. The other question.
Susan Hoffman: And the final question is, is there any way to know how soon the electorate is going to feel the impact?
Bill Sokol: Oh gosh. Yeah. That’s a good question. Look, 1.1 million checks have already been sent out. We know that that’s being felt, right? Lot of folks, I think the number is so far because of the extended application period, 800,000 new people have signed up for Obamacare at the marketplaces. So we’re looking at a million people who didn’t have healthcare before. And it’s impossible to say when a million people get healthcare, let’s say one person in a family is eligible and signs up, the neighbors find out, the relatives find out, you talk to people across the country about it. It’s impossible to know when someone gets that $1,400 check.
Silly story, Susan: I was at a pool. We get our 45-minute lanes, you reserve your pool lane, and you go in, you’re swimming. And as I was getting out, one guy is yelling to another across the pool, “Hey, did you get your $1,400 check yet? I just got mine.” Well, all of a sudden, everybody at that pool who was there knows, “Oh, $1,400 checks are being handed out,” right?
So, we don’t know how soon or how much the impact will be, but I think, if you will, it’s going to build over time. Right now, we see, oh, there’s all these different benefits and all these different programs, what the hell is going on? As time goes on, people begin to understand, “Oh, there’s money here for this and there’s money there for that.” And, “Oh, my friend got money for their rent, how I do that?” “My mortgage is a problem, how do I do this for my mortgage?” I think it’s going to be rippling and rippling.
And I think part of what the plan may be, we’re a long way from Washington. So our ignorance is quite profound. I think the idea is to let this stuff ripple out so that it hasn’t all done a big bang before November, 2022. If it ripples and expands, one can imagine that by the middle of 2022, there are going to be literally millions of people rethinking their voting patterns. I know right now everybody says, “Oh, it’s totally partisan. All Republicans always vote Republican, all Dems will always vote Dem.”
I don’t know what happens to tens of thousands of truck drivers in the Midwest seeing that their pensions are restored. What does that do to their families and their friends? Stay tuned, stay tuned. It’s going to be a very exciting. If nothing else, we have ringside seats on one of the most exciting social economic times of our lives. I know it’s been a terrible time, but it’s also a very exciting time. As they say, you can’t let a good crisis go to waste. The people in Washington, I think, are not letting this go to waste. And it’s going to be a very thrilling time for us to maybe watch major changes happen in our country that we’ve many of us at any rate have wanted to see happen for a long time. Maybe that’s a good place to stop.
Susan Hoffman: It is. Well, thank you very much.
Bill Sokol: Stay tuned folks, it’s going to be really exciting. It’s going to be a great ride, a bit of a roller.
Susan Hoffman: We’ll have you back in a few months.
Bill Sokol: We’ll do the next two laws if we can get them through.
Susan Hoffman: Absolutely. Okay. Thanks a lot. Thanks all the OLLI members who are here today.
Bill Sokol: Thank you. Thank you.
Susan Hoffman: Take care.