President Joe Biden signed the $1.9 trillion American Rescue Plan on Thursday, a day ahead of schedule, to provide needed relief to tens of millions of Americans "as fast as possible," Chief of Staff Ron Klain said.
An official signing ceremony with members of Congress will still be held Friday.
The massive 628-page COVID-19 relief bill covers a wide range of goals for recovering from the pandemic, including more vaccinations and getting immediate relief to people impacted by the pandemic.
Moody's Investors Service's forecasts of 4.7% real GDP growth in the US this year and 5% next year because of the financial assistance and an expected rebound in demand for services. "This latest relief bill is the equivalent of about 8.5% of our forecast 2021 U.S. GDP," Moody's said.
State and local governments are slated to receive $350 billion in direct aid, but are prohibited from spending it on public pension costs or local tax relief.
The package also creates an $86 billion federal assistance program for struggling multiemployer pension funds, and offers some funding relief for single-employer plans, through extended amortization periods and pension interest rate smoothing changes.
Mr. Biden is expected to next focus on a recovery and infrastructure package that could have more bipartisan appeal than the just-enacted relief package supported solely by Democrats.
"There will likely be a more robust attempt to pass the 'recovery' package on a bipartisan basis outside of budget reconciliation and also to pay for at least part of the bill," said Andy Blocker, Invesco's head of U.S. government affairs.
"First in line in the 'pay for' bucket is increasing the tax rate for corporations and high-income earners," Mr. Blocker said. "Next in line would be an increase in the capital gains tax rate, and there is more and more discussion of instituting a financial transactions tax if it can be structured in a way that does not negatively impact retirement accounts, especially public pensions."