While the impacts of the $1.9 trillion American Rescue Plan (ARP) will be debated for years to come, Colorado’s congressional representatives are beginning to sort out what it will mean for small towns and rural communities impacted by the COVID-19 pandemic and recession.
For Colorado, the share of the ARP stimulus, according to independent analyses and estimates provided by members of its congressional delegation, is projected to be $17 billion in direct aid to individuals and government entities in this state. Billions more will flow to the state through other conditional or indirect programs funded by the bill.
“This historic legislation is about rebuilding the backbone of this country,” said President Joe Biden, “and giving people in this nation — working people, middle-class folks, the people that built the country — a fighting chance.”
A recap provided by the offices of Colorado’s U.S. Senator Michael Bennet and Senator John Hickenlooper covers the highlights of the American Rescue Plan. Both say the plan provides a broad range of investments to combat COVID-19 impacts in small towns, support families and businesses, and to help rural communities, in the words of President Joe Biden, “build back better”.
The American Rescue Plan was signed into law after passing both houses of Congress on March 6. The narrow passage in the Senate was via a budget maneuvering action that required a simple majority. But not before two major changes were made to the House bill: dropping a provision to gradually increase the minimum wage to $15 per hour, and reducing the number of people who will qualify for a $1,400 stimulus payment by lowering the income thresholds.
But the good news is the focus placed on assistance for a swath of the country that rarely receives help: rural families and communities. Among the key assistance to rural areas all across the country:
- $39 million in mortgage assistance for rural homeowners, and another $100 million in rent help for those living in USDA-assisted rural housing;
- $8.5 billion for rural health care providers to increase vaccine distribution, provide medical supplies, and support grants to expand access to telehealth;
- $7.6 billion for community health centers, 55 percent of which serve uninsured and underinsured residents in rural communities;
- $3.88 billion to invest in mental health and substance use disorder services, including in rural areas where these issues disproportionately affect both adults and children; a critical need given the mental health crisis intensified by the COVID-19 pandemic;
- $50 million in FEMA funding for first responders, including grants for emergency managers, firefighters, and frontline response organizations like food pantries and shelters in rural areas;
- $3 billion to aid communities in rebuilding local economies, including $750 million for the travel, tourism, and outdoor recreation sectors, which drive many rural economies such as Chaffee and Lake counties;
- $7.17 billion to improve high-speed internet connectivity through schools and libraries, and another $200 million in funding specifically for community libraries;
- $900 million for Tribal community assistance and public safety programs;
- $4 billion for purchases of PPE for farmers and food workers; and financial support for farmers, small and medium-sized food processing companies, farmers markets, and other food businesses;
- $5 billion in debt relief and assistance to socially disadvantaged farmers and ranchers;
- $800 million in direct purchases of farm products for food aid programs.
The American Rescue Plan Direct Payments to Families
The ARP provides a $1,400 payment to supplement the $600 already provided in December, for rural families and seniors who have been hard hit economically by the pandemic. These direct payments help boost small-town economies through the purchase of food and groceries, rent, and other essential needs. This additional payment is already rolling out to individuals and families.
At the beginning of the pandemic in April 2020, nearly 3 million rural Americans were unemployed. The ARP extends this critical enhanced unemployment insurance until September 6, 2021, as well as other unemployment programs passed in the CARES Act and Families First Act. The ARP also ensures that the first $10,200 of unemployment insurance received in 2020 is tax-free for individuals who earn less than $150,000 per year.
Tax Credits for Workers and Families with Children
The ARP significantly expands the Earned Income Tax Credit and the Child Tax Credit, two of the most powerful and effective anti-poverty tools. Improvements to these tax credits will help more than 10 million rural Americans and will lift nearly 10 million children across the U.S. above or closer to the poverty line.
Roughly half of all children who live in poor, rural areas will benefit from this enhanced Child Tax Credit. A list of the state-by-state impact of an expanded Earned Income Tax Credit and Child Tax Credit is available here.
Help Putting Healthy Food on the Table
Around 86 percent of the U.S. counties with the highest rates of hunger are rural, and the highest percentages of recipients of the Supplemental Nutrition Assistance Program (SNAP) live in rural areas and small towns. This budget is administered by the Dept. of Human Services within counties.
Meanwhile, the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) serves 46 percent of rural families, higher than the percentage in either urban or suburban communities. Pandemic-related job losses and economic damage have made the hunger crisis worse.
The ARP extends the 15 percent increase in SNAP benefits through September 30, 2021, and commits millions for states to accommodate the increase in demand for SNAP. The ARP also provides funding for WIC outreach and modernization to make the program more user-friendly and increases the WIC Cash Value Voucher benefit so expecting moms and those with young children can buy more fruits and vegetables.
Help with Rent and Bills:
Prior to the pandemic, more than one-quarter of rural counties saw a rise in the percentage of households that already struggled to pay their bills. Rural renters typically have lower incomes, and less savings, and now higher unemployment due to COVID-19. With fewer protections. historically, they are less able to weather economic shocks. The ARP provides $39 million to help rural homeowners in USDA’s mortgage programs who have fallen behind on their payments get back on track, as well as $100 million to support households living in USDA-assisted rural housing who are struggling to pay rent.
Overall, the ARP includes $21.55 billion in Emergency Rental Assistance to help families pay their rent and utilities. It also provides almost $10 billion to homeowners for mortgage assistance and help to catch up on utilities and other housing-related costs. A state-by-state impact of the Emergency Rental Assistance provision is available here.
History has shown that when families hit financial hardship, they often stop paying their utility bills. According to the ARP documentation, rural Americans spend a larger percentage of their income than their urban and suburban counterparts on household utilities. The ARP includes $4.5 billion for the Low-Income Home Energy Assistance Program and $500 million for low-income water assistance. A state-by-state look at the impact is available here.
Featured image: United States Capitol. Photo by Jan Wondra.