Essential California March 11, 2021 Good morning, and welcome to the Essential California newsletter. It’s Thursday, March 11, and I’m writing from Los Angeles. On Wednesday, the House passed a sweeping $1.9-trillion COVID-19 economic aid package that President Biden is expected to sign on Friday. [Read the story: “House sends $1.9-trillion COVID-19 economic relief bill to Biden’s desk” in the Los Angeles Times] As my D.C. colleague Sarah D. Wire reports, the bill includes pandemic-related $1,400 checks, expanded unemployment benefits, the biggest-ever expansion of Obamacare and hefty new tax credits to combat child poverty. It also includes money for vaccines and hospitals, to help schools reopen, expand broadband access and keep ailing industries such as airlines and music venues afloat. Here’s a look at the COVID-19 stimulus relief bill and what it could mean for Californians. Let’s start with the checks. Who gets one and how soon will it arrive? Individuals whose annual income is less than $75,000, joint filers who make less than $150,000; and heads of household who earn less than $112,500 will receive the full $1,400. (Those filing jointly would receive $2,800.) Dependents, including adult child dependents, are eligible for $1,400 as well. From there the amount quickly phases out, so individuals with annual incomes of $80,000 or more, joint filers with annual incomes of $160,000 or more and heads of households earning $120,000 or more would not receive anything. [Read more: “Who gets a $1,400 check, and other ways the COVID-19 relief bill may affect your pocketbook” in the Los Angeles Times] Within a few weeks of the bill being signed, the IRS is expected to issue the bulk of the money directly into Americans’ bank accounts, using direct-deposit account information on file. Unemployment insurance is set to expire for millions of Americans on Sunday. Does this bill do anything for them? Yes, the bill includes $300 a week in supplemental federal unemployment through Sept. 6. There will also be some major tax relief for Americans who’ve received unemployment benefits during the pandemic. Unemployment compensation is usually taxable as income. But thanks to a last-minute revision in the Senate, workers will not be required to pay taxes on up to $10,200 of unemployment benefits received in 2020, as long as their annual incomes are under $150,000. If you’ve already filed your 2020 return and paid taxes on the unemployment benefits, you can file an amended return to get the money back. Was the bill passed with bipartisan support? No, not a single Republican in the House or Senate voted for the final package. The bill was heavily politicized and, as Sarah reports, both parties are primed to use it against each other in 2022 midterm elections. [See also: “Biden’s early win on COVID-19 relief could be hard to repeat. Or he could be FDR” in the Los Angeles Times] Here’s how Sarah explains the political ramifications, which we’ll probably see plenty of in the months (and years) to come: “Biden and Democrats are embracing what they say is delivering on their 2020 campaign promise to help struggling Americans. Republicans are betting that the currently soaring popularity of the bill will wane and that they’ll be able to hang its costs on Democrats.” What does the bill mean for local and state government in California? California is in line to receive $42.6 billion, with $26 billion going to the state government and differing amounts going to various localities. The city of Los Angeles is expected to receive $1.35 billion — a figure that will help reverse the city’s pandemic-driven financial crisis. Los Angeles Mayor Eric Garcetti said he was “ecstatic” about the coming funds when I asked him about the pending passage of the bill earlier this week. While making clear that this was “not going to be excess money,” Garcetti predicted the funds would help the city cover coronavirus expenses, pay off key debts and possibly free up money to provide additional help for struggling workers, businesses and others.