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Brief #111

Biden Progressive Poverty Policies

Rosalind Gottfried    

March 12, 2021  

Policy

President Biden’s 1.9 trillion dollar American Rescue Plan contains the most comprehensive anti-poverty program since President Johnson’s War on Poverty in the 1960s.  The program will reduce overall poverty by one third and child poverty by one half.  Poverty is expected to be reduced to 8.7% for the year compared with 13.7% previously.  The effect on Black and Hispanic families will be even greater bringing 38% of Black families and 43% of Hispanic families out of poverty while affecting more than one half of the children in these demographics.  This wide ranging program attacks poverty from multiple sources though it contains one time payments and policies which will expire at the end of 2021; nothing in the program extends into 2022 at this time.

The plan includes stimulus checks of $1400 per person, including children under 18, and will go out rapidly. The payments are available to individuals with incomes of less than $80,000, couples with income of less than $160,000, and heads of households with less than $120,000 of income. Though this infusion of cash is a lifeline for struggling families, other plan elements represent changes which could have a greater impact if they are extended beyond the year.

One program, heralded as the most innovative in addressing child poverty, is the extension of the child tax credit to $3600 for children under 6 and $3000 to children under 18.  These tax credits can be taken in monthly installments from July through December, the rest to be credited in 2021 tax filings.  This will give households up to $300 a month and extends the benefit to 23 million children whose families previously were ineligible due to their incomes being too low to qualify.  Some observers consider this the most effective innovation in all of the anti-poverty programs since it will bring extra cash into the household before the end of the tax year.

Childless workers will also get a tax break in the form of an expanded Earned Income tax Credit of $1502, the largest increase since 2009, and increase of almost $1000.  This program also drops the age limit to 19, from 25, and eliminates the upper age limit altogether.

The food supplement assistance program will be increased by 15% which would amount to close to $100 a month more for a family of four, and would extend through September.  This is an effort to help families like those who reported being food insecure during the last two weeks of February.

State unemployment insurance will be federally subsidized by $300 a week through September 6th, and the first $10,200 of benefits will not be taxed.  Federal pandemic assistance programs for freelance, gig workers, and private contractors will be extended.  Housing assistance and healthcare aid will also be extended.   Federal subsidies for purchasing health insurance under the ACA will be increased.

These programs provide a significant impact for struggling families and are widely supported by American voters.  Not a single Republican in either chamber of Congress voted for Biden’s bill.

Analysis

Biden’s American Stimulus Plan represents a more comprehensive effort to address poverty than anything past administrations have done.  A reduction in poverty, though it increases the annual budget, can be a cost saving measure in the long run.  It is well documented that impoverished children sustain decreases in education, income, and stability as adults creating costs in lost revenue and government expenditures.  Addressing poverty is the humane path to promote well-being in the present; America has a high rate of hunger and poverty when compared to other developed nations.  Extending these programs beyond 2021 is one way to make a significant long term impact on poverty.  Biden and the Democrats want to extend these programs but their battle is an uphill one if the stimulus vote is emblematic of the opposition.

Learn More

https://www.cnn.com/2021/03/11/politics/stimulus-package-poverty-child-tax-credit/index.html

https://www.businessinsider.com/stimulus-biden-trillion-could-drastically-cut-poverty-studies-children-2021-3

Engagement Resources

https://www.jwj.org/  Jobs with Justice supports workers and increasing their wages and standard of living.

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