American Rescue Plan Act of 2021
Floor Speech
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Ms. WATERS. Mr. Speaker, I thank President Biden and all of the Democratic leadership for this wonderful, historic piece of legislation that we are voting on here today. This indeed responds to the needs of the American people during this pandemic. This is why I came to Congress to do this kind of work, and I am so proud to be a Democratic Member of Congress at this time.
This bill not only supports education; it gives stimulus checks to put food on the table and unemployment assistance. Small businesses will be able to reopen and stay open. Then everybody will have access to the vaccines that will be made available because of this bill.
It has been said more than once that this bill will take children out of poverty. They will be able to depend on regular assistance to them and their families every month.
I am so pleased that as the chair of the Committee on Financial Services, I have, in my jurisdiction, $77 billion to deal with some very critical issues.
This bill includes critical funding for emergency rental assistance, providing $22.5 billion to pay the back rent and future rent payments owed by millions of struggling families. That is in urban communities, rural communities, Black, White, and Asian. All folks will have access to this rental assistance.
Mr. Speaker, combined with the funding for emergency rental assistance I negotiated in the December stimulus package and the $5 billion for 70,000 new housing vouchers that are included in this package, this bill is truly historic and will help people across the Nation to remain safely housed.
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Ms. WATERS. Mr. Speaker, since March 2020, when the COVID-19 pandemic plunged this country into a public health emergency and wreaked havoc on the U.S. economy, House Democrats have worked around the clock to advance robust legislation to address our public health needs and to provide real assistance to those who have been affected by this deadly pandemic.
That day has finally arrived. The American Rescue Plan Act is the culmination of a year-long effort by Democrats to tackle the pandemic crisis and provide assistance to struggling individuals, families, small businesses and communities. Under the leadership of President Biden, Democrats in the House and Senate are taking action to deliver robust relief across the country.
With millions out of work, facing eviction, experiencing hunger, and struggling to make ends meet, this legislation is urgently needed.
The Committee on Financial Services drafted key recommendations that are contained in the legislation under consideration today, and as Chairwoman I am providing an explanatory statement of these provisions to guide the Administration's implementation of these provisions. Section 3101. COVID-19 Emergency Medical Supplies Enhancement.
Subsection (a) of section 3101 provides $10,000,000,000 to carry out titles I, III, and VII of the Defense Production Act of 1950 (50 U.S.C. 4501 et seq)(DPA) to boost the production of essential medical equipment and supplies related to combating the COVID-19 Pandemic. The Committee expects that in implementing this section, the President will seek to make investments in both urban and rural areas to the extent this is consistent with the country's health needs.
Subsection (b) sets out the purposes for which the $10 billion provided by this section may be used. Paragraph (1) provides that the funds may be used for the purchase, production or distribution of medical equipment and supplies related to combating the COVID-19 Pandemic, including funding for all types of COVID-19 tests, personal protection equipment, including N95 masks, and vaccines and drugs for preventing or treating COVID-19 or its symptoms. Subsection (b) also provides for using such funds for acquisition of material, including raw materials, equipment and technology needed for such purposes. The Committee notes that testing is critical to ensure that we can stamp out the pandemic, and the provision includes in-vitro diagnostic testing, intended to be interpreted as that term is defined in section 809.3(a) of title 21, Code of Federal Regulations), for the detection of SARS-CoV-2 or the diagnosis of the virus that causes Covid-19. The Committee expects that such tests will include inexpensive rapid at- home antigen tests that will allow individuals to identify new infections quickly and safely. This subsection also provides for vaccines, which are described in this section as biological products, intended to be interpreted as that term is defined by section 351 of the Public Health Service Act (42 U.S.C. 262). The Committee also notes that ``drugs'' and ``medical devices'' as used in subsection (b)(1)(C) are intended to be interpreted as those terms are defined in the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.))
Subsection (b) also provides that after September 30, 2022, funds appropriated by subsection (a) may be used to combat future pathogens that the President determines have the potential for creating a public health emergency. This additional flexibility can be used to address the current or future pathogens. Given this flexibility, the Committee expects that if the President exercises this authority, the President will consult with the relevant committees, including providing information on the amounts the President anticipates the administration would spend to combat such a pathogen prior to exercising this authority. Because of the wide ranging interests in these matters, in addition to the Committee on Financial Services, information should be provided to the Senate Committee on Banking, Housing and Urban Affairs, the House and Senate Appropriations Committees, the Committee on Energy and Commerce, and the Senate Committee on Health, Education, Labor and Pensions.
The Committee also expects that the President will provide timely information regarding the use of these funds, whether for the COVID-19 Pandemic or for future pathogens. In particular, the Committee expects that the President will provide information on any commitment of more than $50 million, whether in the forms of expenditures or loans under the Defense Production Act of 1950, prior to making such commitment. Because of the wide interest in these matters, the Committee expects that all such information, shall be provided not only to the Committee but also to the Committees described above.
The Committee also expects that the funds provided by this section will primarily be used by the Secretary of Health and Human Services (HHS). The DPA allows the President to delegate his authority under the DPA to various agencies, and he has delegated DPA authority under Title III of the Act to HHS. While the DPA has been administered by the Department of Defense, the funds made available by this section are not for support of the Defense Industrial Base, but are for medical supplies and equipment related to the COVID-19 Pandemic. However, the Committee recognizes that the President may determine that it is important that other agencies, such as the Department of Homeland Security, have a role in either producing or distributing key supplies with respect to the Pandemic or a future pathogen that has the potential to cause a public health emergency. If the President delegates this authority to any agency other than HHS because it is important to do so, the Committee expects the President to consult with the relevant Committees prior to take such action, and notify the relevant Committees of which agency would exercise such authority, the amount and the purpose for which the funds would be used.
Finally, the Committee notes that the Senate Amendment removed references to section 304(e) of the Defense Production Act of 1950 (relating to limits on carryover funds remaining in the Defense Production Act Fund established by section 304 of the Act). The Committee believes by eliminating this reference, the $10 billion provided by section 3101 is no longer intended to be deposited into the DPA Fund. The statutory framework established by section 3101 clearly provides that the funds provided by this section are for any purpose in titles I, III and VII (including paying for critical infrastructure under section 107 of the Act and for experts and other personnel under Title VII of the Act). By its terms, amounts in the DPA Fund are available only for purposes of Title III, so funds from section 3101 should not be deposited into this Fund. This is also consistent with the provision free standing nature, as opposed to referencing the existing ``DPA Purchases'' account, which is a proxy for deposits into the Fund. Moreover, the fact that the funds have a specific duration until September 30, 2025 demonstrates that these funds have a special status that is not consistent with the statutory frame of DPA Fund. Thus, in agreeing to the Senate Amendment, the Committee intends that the President establish a new account to allow these funds to be used for the purposes of titles I, III, and VII of the Act and to available until September 30, 2025, without reference to section 304 of the Act. In order to ease execution of these funds, the President may use existing delegations and structures to carry out this provision, including current mechanisms for execution of the DPA Fund.
The Committee notes that this section draws from H.R. 1720, introduced by Representative Juan Vargas of California.
With millions of individuals and families struggling to pay their rent, action is urgently needed to prevent an eviction crisis. According to the latest U.S. Census data, nearly 1 in 5 renters are behind on paying rent, with renters of color disproportionally struggling, while Moody's Analytics recently estimated that renters collectively owe over $57 billion in unpaid rent, utilities, and additional fees. Section 3201 provides $21.6 billion for states, localities, and territories to provide emergency assistance to renters. This funding supplements the $25 billion in emergency rental assistance funding provided by Congress in December (Section 501 of the Consolidated Appropriations Act, 2021 (Public Law 116-260) (Section 501)) but includes additional flexibilities to ensure grantees can better stabilize renters. The Biden administration should again extend the federal eviction moratorium that expires on March 31, 2021 so that grantees have time to distribute assistance to renters in need.
Renters would be able to receive up to 18 months of financial assistance, including future rent and utility payments (including pad rents in manufactured housing communities), and unpaid rent or utility bills that have accumulated. Renters can also receive assistance for other housing-related expenses necessary to promote housing stability, such as, but not limited to:, security deposits; relocation and rental fees for displaced households; late fees related to a former or current rental unit; and internet service provided to the rental unit. Section 3201 does not preclude grantees from continuing payment processes provided in Section 501. These processes are the provisions that govern payments of rent and utility assistance either to property owners and utilities or directly to tenants, and the application for assistance by landlords and owners under subsection (f). Additionally, funds can be used to provide housing stability services, such as, but not limited to: case management; tenant-landlord mediation; legal services related to eviction and housing stability; housing counseling; fair housing counseling; and specialized services for people with disabilities, people with chronic health conditions, seniors, or survivors of domestic violence or human trafficking. Similar to Section 501, Section 3201 permits grantees to use a certain percentage of their funds on administrative costs to support eligible program activities, including the provision of financial assistance and housing stability services. Grantees may also use up to 10 percent of their funds on providing housing stability services. As in Section 501, funds are provided to states to assist renters throughout the state, including in rural communities, as well as cities and counties that receive a direct allocation.
The Committee expects the Department of the Treasury (Treasury) (the agency implementing the program) and grantees to implement Section 3201 swiftly and not create any artificial barriers to assistance. In particular, we have seen with some benefits provided by the CARES Act, that documentation requirements to prove eligibility have erected artificial barriers that have cut people off from the benefits Congress intended them to receive. Indeed, diverse stakeholders, including tenant advocates, landlords, and state and local government agencies have raised concerns that such requirements that have been applied in existing emergency rental assistance programs have prevented renters from completing applications and are overly burdensome for program staff. It is critical that any renters who are struggling to pay their rent during the pandemic are not barred from accessing this assistance due to cumbersome documentation requirements or other barriers. An applicant's simple attestation should be the only documentation required to meet program eligibility requirements. Additionally, grantees may continue the income assessment procedures pursuant to Section 501 to determine eligibility. It is also the intent of the Committee that Treasury and grantees broadly read the requirement regarding the connection between a renter's hardship and the coronavirus pandemic when determining the eligibility of the renter. As the language states, the hardship must have occurred ``during or due, directly or indirectly, to the coronavirus pandemic.'' The economic effects of the pandemic will be felt long after the virus is contained. Certain industries and communities have been particularly hard-hit from the pandemic and will likely take years to recover. Treasury should issue guidance that makes this point clear to ensure renters are not cut off from needed assistance as they try to recover from economic downturns caused by the pandemic.
Section 3201 also provides that after October 1, 2022, certain grantees may expend funds on ``other affordable rental housing and eviction prevention activities'' that benefit any very low-income renter household. Such activities can include affordable housing development, preservation, or acquisition, and other forms of rental assistance and eviction prevention activities targeted to very low- income renters.
To ensure continuity in monitoring funds provided by Section 3201 and Section 501 and ease of grantee implementation, Treasury should maintain the same reporting requirements that were included in Section 501.
The Committee encourages the Administration to create and maintain a central public repository of information on state and local rental assistance programs, which at a minimum identifies the program's administering agency and contact information, so that renters and landlords can more easily identify available assistance.
Finally, to the extent there is any confusion with regard to the taxability of assistance, Treasury, in consultation with the Internal Revenue Service, should provide guidance to clarify this for grantees and program participants.
During this public health emergency and financial crisis, millions of homes are threatened by foreclosure, with over 8 million homeowners behind on their mortgage payments, and an estimated $90 billion in missed mortgage payments. Targeted, direct assistance to homeowners through the Homeowner Assistance Fund (HAF or Fund) is an essential tool that will help avoid a repeat of the 2008 foreclosure crisis, which upended the lives of millions of Americans and eviscerated the generational wealth for many communities, namely for families and communities of color.
Although the CARES Act provided a foreclosure moratorium and forbearance for federally-backed mortgages, many homeowners will lose their homes to foreclosure in the absence of additional assistance. Approximately 30 percent of the mortgage market is not federally-backed and, therefore, ineligible for CARES Act forbearance relief provided in March of 2020. Elderly borrowers with reverse mortgages (known as Home Equity Conversion Mortgages or HECMs) will need assistance paying their taxes, insurance, and utilities on time to avoid foreclosure. Low-to- moderate income homeowners may need more payment assistance after forbearance than is possible through loss mitigation programs. Single- family rental property owners and other homeowners without a mortgage will also need assistance to avoid losing their homes due to foreclosures. The HAF would be able to help with other housing costs beyond mortgage payments, and can be used for things like principal reduction that are not offered through loss mitigation for federal mortgage programs but can provide deeper payment reductions for homeowners who need it.
Administered through the Department of the Treasury (Treasury), the HAF would provide nearly $10 billion for states, territories, and tribal governments to address the ongoing needs of homeowners struggling to afford their housing because they have experienced a financial hardship associated with the coronavirus pandemic. Designed to work alongside CARES Act mortgage forbearance relief and federal loss mitigation programs, the HAF will prevent foreclosures by providing homeowners direct assistance with their mortgage payments, property taxes, property insurance, utilities, and other housing related costs. The funding would be administered similar to the Hardest Hit Fund (HHF), which was a homeowner relief program created in the aftermath of the 2008 crisis that was administered primarily through State Housing Finance Agencies. While HHF funding was available to select states, the HAF has been calibrated to be available to all states, territories, and tribes, and to account for significantly higher rates of unemployment today as compared to 2008.
Of the nearly $10 billion dollars provided through the HAF, 60 percent of funds are required to serve homeowners making at or below 100 percent of the area median income or the national median income, whichever is higher. The flexibility in income determination between AMI and national median income is intended to ensure resources reach localities where the area median income may be too low to adequately serve struggling tribal homeowners and other homeowners living in rural areas. The remaining 40 percent of funds are not income limited and must be targeted to socially disadvantaged individuals, which the Committee expects will capture homeowners of color, including Black, Latinx, Asian, and Native American homeowners across the income spectrum who have been shown to be at disproportionate risk of being delinquent on their mortgages and at risk of foreclosure due to having lower savings and less wealth on average compared to White homeowners. According to the U.S. Census Bureau's weekly Pulse Survey data, Black, Latinx, and Asian homeowners have consistently been more than twice as likely as White homeowners, despite age, sex, income, and geography, to be behind on their mortgage payments. Similarly, a survey conducted by Fannie Mae found that 51 percent of Black homeowners and 65 percent of Latinx homeowners were not familiar with forbearance relief options provided through the CARES Act, despite being the populations with the greatest need.
The Committee expects that Treasury's implementation and administration of the Fund will include proper oversight and reporting requirements to monitor and ensure HAF funding properly reaches and serves the populations that have been documented to be experiencing disproportionate need during the current crisis. Adequate reporting should be made publicly available on a quarterly basis and include the types and amount of assistance provided, the terms of such assistance, with the data disaggregated by locality, race, ethnicity, sex, and other factors that provide transparency and oversight in accordance with the law. Such reporting will also be essential in Treasury's ability to implement the HAF Reallocation provision.
While the Department of Housing and Urban Development, in coordination with the Department of Justice, is responsible for the enforcement of the Fair Housing Act (FHAct), the FHAct requires that all federal housing programs and funds be administered in ways that affirmatively further fair housing and do not perpetuate historically inequitable distribution of housing funds. Therefore, both Treasury and eligible entities have a legal responsibility to affirmatively further fair housing through HAF, and to ensure that the administration of housing relief funds do not have a disparate impact on protected classes under the FHAct. The federal government must avoid its mistakes of the past that have resulted in the lopsided, inequitable provision of housing relief that fails to meet the needs of hardest hit communities that are often the lowest income communities and communities of color. In support of these efforts, Section 3208 provides $20 million for HUD's Fair Housing Initiatives Program to support housing discrimination complaint intake and on-the-ground fair housing investigations.
Additionally, Treasury must provide eligible entities with clear and standard guidance early on in its administration of HAF to facilitate proper and expeditious implementation. The Committee expects Treasury to clarify that assistance provided through HAF should not be considered income for a homeowner receiving relief. Additionally, Treasury should make sure it is made clear as early on as possible that eligible entities can utilize a portion of their HAF funds to establish and administer their programs, similar to what was allowed through HHF. The Committee also expects that the Treasury will allow eligible entities that overestimate funding needs for administrative purposes to transfer and use such funds in the provision of assistance to homeowners.
Following the 2008 financial crisis and Great Recession, Congress established the State Small Business Credit Initiative (SSBCI) that provided $1.5 billion to the Department of the Treasury (Treasury) to fund various state, territory, and local small business loan and investment programs. This program was leveraged to support $10.7 billion in new financing to small businesses, helping to create or save more than 240,000 jobs. The median small business size supported by SSBCI had 3 full time employees, and the median loan or investment amount was $33,000. Approximately 41 percent of SSBCI supported transactions went to women or minority-owned businesses. This successful program expired in 2017.
In light of the widespread challenges small businesses, especially minority-owned businesses, have faced during the COVID-19 pandemic, Section 3301 would effectively reauthorize the SSBCI, providing $10 billion in federal funds to support up to $100 billion in new loans and investments for small businesses through state, territory, tribal, and local small business programs. This amount includes up to $2.5 billion in federal funds to support business enterprises owned and controlled by socially and economically disadvantaged individuals, including minority-owned businesses. This amount also includes up to $500 million for tribal government programs, and $500 million to provide technical assistance to small businesses that need legal, accounting, financial and other kinds of advice in applying for small business support programs.
As the renewed SSBCI is stood up, the Treasury should provide adequate support to small businesses, especially very small businesses and those owned by socially and economically disadvantaged individuals. Socially and economically disadvantaged individuals may include racial and ethnic minorities, women, indigenous people, veterans, or others who have been marginalized by their social or economic conditions. Additionally, through the program requirements Treasury is authorized to establish and through other means, the Committee expects Treasury to closely oversee states' expenditure of $2.5 billion funds that are to directly support businesses owned by socially and economically disadvantaged individuals, including establishing a minimum level of support states and other jurisdictions receiving funds provide to these businesses.
In addition, the Treasury should require states to provide a specific plan to engage minority depository institutions (MDIs), community development financial institutions (CDFIs) and other mission-driven lenders who have a strong track record of supporting small and minority-owned businesses. Treasury should also require states to a COVID-19 pandemic response plan with their application, describing how the state will expeditiously utilize funds to support small businesses, including business enterprises owned and controlled by socially and economically disadvantaged individuals, in responding to and recovering from the economic effects of the COVID-19 pandemic. Moreover, Treasury should also require states to agree that no lending activity supported by SSBCI funds would result in predatory lending, including charging interest rates in excess of 36 percent annual percentage rate under the Military Lending Act.
With respect to the technical assistance funds made available under Section 3301, Treasury should maximize the ability to deploy these funds to the Minority Business Development Agency (MBDA) at the Department of Commerce, which could expedite support to a network of business counselors, minority chambers of commerce and non-profit organizations that are already providing such services in their communities. Further, given research demonstrating that increasing employee ownership is one way to help narrow gender and racial wealth gaps, the Committee encourages Treasury to provide funds to states that use the funds to support state employee ownership centers that provide technical assistance to businesses, including providing resources on how small businesses can offer workers employee stock ownership plans.
Furthermore, the Committee expects that the Treasury will provide timely information regarding the use of these funds. The Treasury should require the gathering of data on program implementation, including but not limited to, demographics on program participants and interest rates assessed by lenders and investors. This data should be reported to the public and the appropriate congressional committees of jurisdiction, as well as shared with appropriate federal audit agencies, such as the Inspector General's office and the Government Accountability Office, for review.
The CARES Act, signed into law on March 27, 2020, established the Payroll Support Program (PSP), which provided $32 billion in payroll support for workers employed by airlines, cargo air carriers, and contractors servicing air carriers at airports. Through the Consolidated Appropriations Act of 2021, Congress approved the Payroll Support Program Extension (PSP2), which provided short-term relief to the same class of workers as PSP until March 31, 2021. According to some estimates, major U.S. airlines lost over $35 billion in 2020, and require additional assistance to support their workforce. Therefore, Section 7301 would provide $15 billion to further extend the Payroll Support Program (PSP3) through at least September 30, 2021, to provide payroll support for airline workers and related contract workers. Specifically, PSP3 would provide $14 billion to support workers of eligible air carriers, and $1 billion would be available to support workers of eligible contractors. Given the budget reconciliation process and the need to rely on the PSP2 distribution framework, the Committee urges Treasury to implement this program in a robust and fair manner so that all entities eligible for PSP2 and PSP3 are able to access the program and provide ongoing support for its workforce.
Like other businesses, airports and airport concessions have been hit hard during the pandemic. To help ensure those businesses and their workers get the support they need until the public health emergency is over and normal activity resumes, Section 7102 provides $8 billion in relief for airports, including at least $800 million to support airport concessions. In administering the program, the Federal Aviation Administration (FAA) should implement this program along with the relief program Congress enacted into law through the Coronavirus Response and Relief Supplemental Appropriation Act on December 27, 2020, holistically and prioritize support for minority-owned businesses, including Airport Concession Disadvantaged Business Enterprises (ACDBEs). Moreover, Section 7102 recognizes the interconnected ecosystem that many airport concessions operate in, including through joint ventures and other partnerships with large airport concessions they receive indirect support from. As such, the FAA should support the full ecosystem while taking all necessary steps to ensure small and minority-owned concessions, regardless of the contractual arrangements those entities are a party to as an airport concession (e.g. joint venture, sub-tenant under a master lease or master developer, etc.), receive robust rent and fee abatement as expeditiously as possible. While Section 7102 provides airports with critical funding to support airport concessionaires, the amount appropriated is less than what stakeholders have indicated is necessary to support workers and promote stability during this difficult time. Given the key role concessionaires of all types provide to the traveling public and to airport finances, I encourage the FAA and other federal agencies to find ways to provide additional financial and other support to the airport concessions ecosystem during this challenging time.
Mr. Speaker, individuals, families and small businesses are in urgent need of assistance. This legislation delivers robust relief to communities across the country during this pandemic crisis. Colleagues, please join me and vote yes for H.R. 1319.
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