On Thursday, March 11, President Biden signed the $1.9 Trillion American Rescue Plan ("ARP") into law. The use of Budget Reconciliation allowed a narrow majority in the Senate (50-49) to enact the legislation. Also, any effort to raise the federal minimum wage to $15 was dropped.
What are the immediate ARP opportunities for French and foreign businesses?
Anti-COVID: As the U.S. passes 100 million vaccinations and at 2 million per day, is on its way to 200 million by the end of June, the U.S. will use at least $60 Billion in ARP funds to continue the fight against COVID. When we add this funding to the $400 Billion in direct checks of $1400 each to persons making up to $75,000 per year or $150,000 per couple, the basis for continued economic recovery is established. The boost from spending under the ARP is forecast to support 8% growth in GDP (PIB) in 1Q 20212 and over 6.5% for the year 2021. Meanwhile, the EU, including France, “ lags behind the U.S. in its COVID recovery” (Wall Street Journal 03/13/21) and by consequence, in its economic recovery efforts, whether measured by growth in GDP (PIB), hospitalizations, deaths per capita, or vaccinations. This means that the U.S., the largest Western economy, is more than ever an attractive target for foreign investment, whether by establishing a new U.S. subsidiary or entering the market through an acquisition or joint venture.
Stimulus Spending: The ARP contains additional government spending that creates new markets that foreign and domestic businesses can capture to sell their services, technologies, and products. Unlike past stimulus legislation, the ARP will send over $155 Billion directly to local governments, bypassing the States and bureaucratic red tape. Cities, towns, and counties will want to spend those dollars quickly, particularly for new equipment, technology, and services. This will create a boom for companies with a local presence that can cash in. Schools likewise will receive $170 billion in federal funding to spend as they like to reopen, or modernize and make safe their facilities. A special Restaurant Fund of $28 billion in the ARP will allow restaurants to apply for grants to reopen or transform their facilities, using the latest in products and technologies. And the list goes on...
Meanwhile, President Biden announced that the ARP is "just the beginning" as he gets ready to submit a trillion dollar+ (1000 billion+) infrastructure and climate change plan to Congress. His "Build Back Better" will push clean energy, EVs (electric vehicles), and other green projects along with repairs and improvements to the infrastructure (everything from more 5G to tunnels and bridges, etc.). We expect that if Build Back Better is to pass Congress, President Biden will need to offer a "sweetener" or inducement to each Republican Representative or Senator -- namely an opportunity to sponsor special projects for his or her home district. A return to the "horse-trading" in "Earmarks'' from years gone by? Please stay tuned for more developments.
We would be happy to discuss with you how your company could capitalize on the ARP's huge and unprecedented expenditures.
With Best Regards,