Last week, President-elect Joe Biden proposed his American Rescue Plan. This $1.9 trillion so-called coronavirus relief package would continue to increase the federal deficit with the intention of helping to spark economic growth, support Americans and increase vaccination distribution. But some of the ideas could have unintended consequences. Here are a few items included in the American Rescue Plan:

• Another Round of Direct Payments
  Included in the package would be additional direct payments of $1,400 to each American earning less than $75,000 annually. The payment amount increases based on marital status and number of children. This payment comes shortly after Americans received a $600 relief check. These direct payments are meant to encourage economic fluidity, while giving Americans a short-term cash advance.

• Extended Unemployment Benefits
  The latest stimulus package extended unemployment benefits of $300 per week through March 2021. Biden’s American Rescue Plan would increase these payments to $400 per week and continue to provide the benefit through the end of September 2021.

  Extending unemployment benefits could discourage some Americans from returning to work. Therefore, the policy proposal could have a dragging effect on the unemployment rate. Public policy should encourage Americans to return to work, not become dependent on taxpayer dollars to survive.

•  $15 Minimum Wage
  Tucked into the American Rescue Plan is an increase to the federal minimum wage, more than doubling it from $7.25 to $15 per hour.

  Overwhelming evidence indicates raising the minimum wage to $15 an hour would have a severe impact on small businesses. Already, mom and pop shops are struggling to keep their doors open due to COVID-19 restrictions and regulations. Increasing the minimum wage could be the final nail in the coffin for many small businesses. Moreover, according to the nonpartisan Congressional Budget Office, 1.3 million Americans could lose their jobs if the minimum wage was increased to $15 per hour.

• Expanded Child Tax Credit
  The stimulus package also includes a temporary increase in the child tax credit from $2,000 to $3,000 for all children under 18 years of age and $3,600 for children under six years of age. The plan would also make the tax credit refundable. In other words, those who don’t owe any income tax can claim it and still receive the money.

• Vaccine Distribution
  In the American Rescue Plan, President-elect Biden set a goal of administering 100 million doses of the COVID-19 vaccine within his first 100 days in office. Under his plan, this would allow for the majority of kindergarten, elementary, middle and high schools to reopen within the same time period. The package includes about $400 billion to assist in vaccine production and distribution. 

If passed, the American Rescue Plan, designed to help ease financial burdens and promote economic growth, could have reverse effects on small businesses. With the vaccine, Main Street is finally seeing the light at the end of the tunnel. However, with the potential of workers making more on unemployment and an increased minimum wage, this light could soon dim.