What’s in Biden’s Economic Stimulus Plan?

President-elect Joe Biden announced the details of his $1.9 trillion COVID-19 relief plan Thursday night. The relief package — entitled the American Rescue Plan — increases many of the benefits detailed in Congress's $3 trillion coronavirus relief bill from March and in December’s $900 billion legislation, which was scaled back to garner support from Senate Republicans. 

Biden’s proposal features additional $1,400 stimulus checks, increased unemployment benefits and a raise in the federal minimum wage. Additionally, the bill outlines specific support opportunities for small business owners, including a few key components that may impact the franchise world.

Support for Small Business Owners

Biden’s plan includes a new $15 billion grant program for struggling small business owners, separate from the existing Paycheck Protection Program. The grant program is designed to aid “more than one million of the hardest hit small businesses,” including Black- and Brown-owned small businesses, and those in struggling industries like restaurants, hotels and the arts. 

This grant program could act as a much-needed lifeline for the foodservice industry, which has seen 110,000 restaurants closing since the start of the pandemic.

The bill also proposes a $35 billion investment in some state, local, tribal and non-profit financing programs that make low-interest loans and provide venture capital to entrepreneurs. 

Unemployment Benefits

The President-elect’s bill would increase federal unemployment benefits from $300 to $400 per week on top of existing unemployment uninsurance for the more than 10 million Americans still looking for work, and it would extend the deadline through the end of September. 

Biden also looks to extend financial assistance for unemployed workers who do not typically qualify for unemployment compensation benefits, such as ride-share workers, grocery delivery workers, independent contractors and more.

Bigger Stimulus Checks

In April, the White House issued stimulus checks for a maximum of $1,200 per adult and $500 per child. An economic package passed by Congress in December provided fresh $600 stimulus payments, which started rolling out this month. Biden's American Rescue Plan calls for adding up to $1,400 to the payments, totaling $2,000 for those eligible.

This time, Biden has also proposed some changes to provisions from the first round stimulus checks, including payment eligibility for some adult dependents over 17 and households with mixed immigration status.

While Biden’s plan is likely to receive push back from the other side of the aisle, the increased relief checks seem to be one area that Republicans are getting behind. Sen. Marco Rubio (R-Fla.) said in a Tuesday letter to the president-elect that legislation that would increase direct payments to $2,000 “would send a powerful message to Americans.”

The $15 Minimum Wage

Biden’s proposed bill also details a plan to raise the minimum wage to $15. Although many businesses and advocacy groups have already showed their support, others are more concerned. 

In response to Biden’s new plan, the IFA expressed concern that “a requirement to more than double some workers’ wages will harm struggling businesses and likely slow the recovery,” according to National Restaurant News.

Increased Support for Vaccines and Testing

The plan calls for investing $20 billion in a national vaccination program, including launching community vaccination centers around the country and mobile units for more remote areas. Biden would also increase federal support to vaccinate Medicaid enrollees. This vaccination plan could help businesses keep their staff safe and open their doors faster.

The proposal would also invest $50 billion in testing, providing funds to purchase rapid tests, expand lab capacity and help schools implement regular testing to support reopening.

What This Means for Franchises

In addition to round two of the PPP loans, Biden’s proposed $15 billion grant program for struggling small business owners could be a major boon for many franchisees if they happen to qualify. The low-interest loans and financing programs may also be able to help some prospective franchisees or business owners secure funding.

Stimulus checks, increased minimum wages and additional rent support could increase the spending power of American consumers. The bill’s vaccination plan could also help get American consumers back in a place where they feel comfortable going out to eat or visiting stores.