President Joe Biden and congressional Democrats said the American Rescue Plan would cut poverty in the U.S. by a third and cut child poverty in half by the end of this year. Turns out, they were being too modest. The poverty rate, thanks to the programs in the federal COVID relief packages, have dropped child poverty by 61% compared to 2018 levels.
Overall poverty, Urban Institute researchers say, will be nearly cut in half by the end of the year. Nearly 20 million fewer people will live in poverty compared to 2018, the Urban Institute finds—a nearly 45% decline. The poverty rate in 2018 was 13.9%, and they project it will be 7.7% this year. In real numbers, an estimated total of 50 million Americans are being kept out of poverty by the programs.
That's the lowest level of poverty on record, and the fastest decline the nation has ever experienced in the poverty rate, thanks to the investment the Biden administration has made with COVID-19 relief. So far. But the critical caution is that most of the programs that have achieved this are temporary, and disaster looms for many in the form of the expiring eviction moratorium.
But the accomplishment remains huge. "These are really large reductions in poverty—the largest short-term reductions we’ve seen," said Laura Wheaton of the Urban Institute, who produced the estimate with colleagues Linda Giannarelli and Ilham Dehry, told The New York Times, which requested the analysis.
"Wow—these are stunning findings," said Bob Greenstein, founder of the Center on Budget and Policy Priorities and current Brookings Institution fellow. "The policy response since the start of the pandemic goes beyond anything we’ve ever done, and the antipoverty effect dwarfs what most of us thought was possible." For the "both-sides" of the story, the Times let the Heritage Foundation talk about the fundamental danger of allowing poor people to not suffer, and to do so as offensively as possible. "There’s no doubt that by shoveling trillions of dollars to the poor, you can reduce poverty," the very smug and totally never-been-poor Robert Rector said. "But that's not efficient and it's not good for the poor because it produces social marginalization. You want policies that encourage work and marriage, not undermine it." Right, "social marginalization." That’s totally unlike what the White supremacist overlords of the right have been striving for for decades. The programs that made the most difference in reducing poverty—stimulus checks, increased SNAP benefits, and expanded unemployment insurance—were temporary, have expired, or are about to expire, so this is unfortunately going to be reversed without further action by Congress. The researchers estimate that without government assistance, including "unemployment insurance (UI), government means tested programs (either standard benefits or benefits increased because of the pandemic), pandemic-related stimulus payments or state payments, or the advance child tax credit," poverty will rebound. They believe the poverty rate in 2021 would be 23.1% without further intervention.
The Times provides a real-world example of a family saved this year. Kathryn Goodwin is a single mother of five in St. Charles, Missouri, who lost her job managing trailer parks in the pandemic. The salary was $33,000 per year. She would have been forced into poverty without the assistance—to $29,000 for her family of six—and below the poverty line. Instead, with the stimulus checks, bumped-up SNAP benefits, and enhanced UI, her income rose to $67,000. "Without that help, I literally don't know how I would have survived," she said. "We would have been homeless."
They also spoke with Jessica Moore of St. Louis, a single mother of three who lost her position as a banquet server in the pandemic. Between UI and her stimulus payments, Moore was able to enroll in community college and buy a car. She's now studying to become an emergency medical technician, at a 50% higher salary than her previous job. "When you lose your job, you don’t expect benefits that are more than you were making," she said. "It was a pure blessing." The relief gave her the opportunity to lift her family out of poverty permanently, but probably since she's a single mom, the Heritage Foundation couldn't appreciate that.
The Child Tax Credit expansion and monthly payments need to be made permanent. The USDA needs to follow Biden's directive and revamp the food assistance program to make it adequate without special funding from relief packages. And to seal the deal, Congress absolutely needs to pass the budget reconciliation bill that would provide an economic boon for millions to make sure that this achievement isn't lost.
Overall poverty, Urban Institute researchers say, will be nearly cut in half by the end of the year. Nearly 20 million fewer people will live in poverty compared to 2018, the Urban Institute finds—a nearly 45% decline. The poverty rate in 2018 was 13.9%, and they project it will be 7.7% this year. In real numbers, an estimated total of 50 million Americans are being kept out of poverty by the programs.
That's the lowest level of poverty on record, and the fastest decline the nation has ever experienced in the poverty rate, thanks to the investment the Biden administration has made with COVID-19 relief. So far. But the critical caution is that most of the programs that have achieved this are temporary, and disaster looms for many in the form of the expiring eviction moratorium.
But the accomplishment remains huge. "These are really large reductions in poverty—the largest short-term reductions we’ve seen," said Laura Wheaton of the Urban Institute, who produced the estimate with colleagues Linda Giannarelli and Ilham Dehry, told The New York Times, which requested the analysis.
"Wow—these are stunning findings," said Bob Greenstein, founder of the Center on Budget and Policy Priorities and current Brookings Institution fellow. "The policy response since the start of the pandemic goes beyond anything we’ve ever done, and the antipoverty effect dwarfs what most of us thought was possible." For the "both-sides" of the story, the Times let the Heritage Foundation talk about the fundamental danger of allowing poor people to not suffer, and to do so as offensively as possible. "There’s no doubt that by shoveling trillions of dollars to the poor, you can reduce poverty," the very smug and totally never-been-poor Robert Rector said. "But that's not efficient and it's not good for the poor because it produces social marginalization. You want policies that encourage work and marriage, not undermine it." Right, "social marginalization." That’s totally unlike what the White supremacist overlords of the right have been striving for for decades. The programs that made the most difference in reducing poverty—stimulus checks, increased SNAP benefits, and expanded unemployment insurance—were temporary, have expired, or are about to expire, so this is unfortunately going to be reversed without further action by Congress. The researchers estimate that without government assistance, including "unemployment insurance (UI), government means tested programs (either standard benefits or benefits increased because of the pandemic), pandemic-related stimulus payments or state payments, or the advance child tax credit," poverty will rebound. They believe the poverty rate in 2021 would be 23.1% without further intervention.
The Times provides a real-world example of a family saved this year. Kathryn Goodwin is a single mother of five in St. Charles, Missouri, who lost her job managing trailer parks in the pandemic. The salary was $33,000 per year. She would have been forced into poverty without the assistance—to $29,000 for her family of six—and below the poverty line. Instead, with the stimulus checks, bumped-up SNAP benefits, and enhanced UI, her income rose to $67,000. "Without that help, I literally don't know how I would have survived," she said. "We would have been homeless."
They also spoke with Jessica Moore of St. Louis, a single mother of three who lost her position as a banquet server in the pandemic. Between UI and her stimulus payments, Moore was able to enroll in community college and buy a car. She's now studying to become an emergency medical technician, at a 50% higher salary than her previous job. "When you lose your job, you don’t expect benefits that are more than you were making," she said. "It was a pure blessing." The relief gave her the opportunity to lift her family out of poverty permanently, but probably since she's a single mom, the Heritage Foundation couldn't appreciate that.
The Child Tax Credit expansion and monthly payments need to be made permanent. The USDA needs to follow Biden's directive and revamp the food assistance program to make it adequate without special funding from relief packages. And to seal the deal, Congress absolutely needs to pass the budget reconciliation bill that would provide an economic boon for millions to make sure that this achievement isn't lost.