What Did Biden and Congress Mean for Our Wallets in 2021?

©Michael Brochstein/SOPA Images/Shutterstock

President Joe Biden’s massive infrastructure bill was one of the most talked about parts of his presidency this year, but it won’t have much of an immediate impact on the lives and wallets of regular Americans. Many other Biden administration programs, however, already have. With the year coming to a close, it’s time to look at what the president and Congress did that changed your financial situation — and a few things they didn’t do, but that happened on their watch just the same.

Social Security Schedule: When the First COLA Checks Will Arrive in January 2022
Social Security 2022: How the COLA Will Increase Benefits for the Average Senior Couple

The American Rescue Plan Was a Historic Transfer of Wealth

Possibly the biggest achievement for President Biden and Congress so far has been the American Rescue Plan, a massive $1.9 trillion pandemic relief bill that was the third major COVID-19 stimulus package since the start of the pandemic.

Make Your Money Work for You

Read: Here’s How Stimulus Money Changed Everything in 2021

Nothing the government did had a bigger or more immediate impact on the wallets of more average Americans in 2021. The legislation’s two signature direct-payment programs delivered:

  • 90 million Economic Impact Payments worth more than $242 billion. Individuals received $1,400 as a direct deposit, check or debit card. Married couples got $2,800 and qualifying dependents each brought another $1,400 into the household. That’s $5,600 for the average American family of four.
  • An expansion of the Child Tax Credit from $2,000 to $3,600 for children under the age of 6. Older minors — now 17 years old and younger instead of 16 and younger — received $3,000. Perhaps most importantly, half of the fully refundable credit was paid out in advance monthly installments so struggling families could get the cash when they needed it instead of waiting until the 2022 tax season.

Related: 8 Surprising Facts About Stimulus Checks in 2021

The Act Had Indirect Financial Impacts, Too

The American Rescue Plan transferred lots of money to people indirectly by funding state-administered programs, too. Among them were:

  • State and Local Fiscal Recovery Fund: This program provided $350 billion in emergency funding for state, local, Tribal and territorial governments.
  • Capital Projects Fund: This was a $10 billion allocation to help governments fund broadband infrastructure and other capital projects.
  • Homeowner Assistance Fund: This set aside $10 billion for states to help vulnerable residents pay for housing.
  • Emergency Rental Assistance: This gave $21.6 billion to the states to help at-risk residents pay their rent and utilities.
  • Unemployment compensation tax relief: This part of the act waives $10,200 of unemployment benefits that middle- and lower-income taxpayers received in 2020.
  • State Small Business Credit Initiative: This program provided $10 billion for states to protect vulnerable small businesses, particularly the smallest businesses with fewer than 10 employees and businesses owned by economically disadvantaged people.
  • Employee Retention Credit: Finally, this indirect benefit allowed many workers to keep getting paid who might have otherwise been filing for unemployment benefits. It gave qualifying small businesses $7,000 per employee per quarter up to $28,000 to help ease payroll burdens.
Make Your Money Work for You

Don’t Qualify for SNAP? The Commodity Supplemental Food Program Could Help Seniors Get Food

Inflation Made Everything More Expensive

Many factors have contributed to the rising inflation that’s been making headlines for months, and many of those factors were in place before Biden took office, such as the COVID-19 pandemic. Even so, the current inflation rate of 6.2% is the highest it’s been in decades, according to the Brookings Institute. Although inflation isn’t always bad and often accompanies economic growth, many economists have sounded the alarm over how quickly and how dramatically prices have risen in 2021.

Keep More of Your Money: All the States That Don’t Tax Social Security

The Stock Market Has Gone Up, Up, Up

The stock market is affected by a number of factors, but it’s impossible to ignore the impressive gains the market has enjoyed over the last year.

  • The S&P 500 — which produced 50 record highs by Aug. 28, according to MarketWatch — is up about 22% year to date.
  • The Nasdaq composite — which topped 16,000 in November — is up more than 18% year to date.
  • The Dow Jones Industrial Average — which topped 36,000 in November — is up nearly 14%.
Make Your Money Work for You

Check Out: The Average Social Security Check the Year You Were Born

But So, Too, Have Gas Prices

Few outcomes impact Americans more directly than the price of gas — and it has been an unpleasant year at the pump. According to the U.S. Energy Information Administration, the average price of gas nationwide across all grades was $2.42 in January when Biden took office. By November, that price had risen by more than a full dollar all the way up to $3.49.

More From GOBankingRates

Share this article:

Make Your Money Work for You

About the Author

Andrew Lisa has been writing professionally since 2001. An award-winning writer, Andrew was formerly one of the youngest nationally distributed columnists for the largest newspaper syndicate in the country, the Gannett News Service. He worked as the business section editor for amNewYork, the most widely distributed newspaper in Manhattan, and worked as a copy editor for TheStreet.com, a financial publication in the heart of Wall Street's investment community in New York City.
Learn More