The American Rescue Plan to be signed into law by President Biden this week is projected to reduce the poverty rate by one-third, the Urban Institute estimates. The think tank originally estimated that around 13.7 percent of U.S. households would be in poverty for the year 2021; the new stimulus package would take that rate down to 8.7 percent. It would reduce child poverty by half.
People of color will benefit the most, they added, and that would address one of the grimmest trend lines of the pandemic. “Poverty would fall about 42 percent for Black, non-Hispanic people, 39 percent for Hispanic people, and 34 percent for white, non-Hispanic people, reducing the disparities in poverty rates for Black, non-Hispanic people and Hispanic people relative to white, non-Hispanic people,” they continued.
Researchers identified four key elements that will reduce poverty: extending an additional $300 per week in unemployment insurance, expanding Supplemental and Nutritional Assistance Program by 15 percent, $1,400 checks per individual, and increasing the child tax credit from $2,000 to as much as $3,600. But there’s a caveat: The ARP’s benefits are only good for one year. Once they expire, poverty could rise again.
As the economy struggles to revive itself, certain stressors threaten its future prosperity. A grotesque concentration of wealth widened racial disparities and placed certain households close to the brink by the time the pandemic shut down the country. The ARP reverses a tired old dogma: Bet on households at the top, and the rest of the economy will benefit. Cut their taxes, and they’ll create more jobs, and a bit of wealth will eventually trickle down. Instead, the ARP invests in the poor. Lift households out of poverty, and they’ll have more to spend, and not just on their own needs. It’s good policy, as the Urban Institute’s analysis helps substantiate. It’s just not permanent policy, at least not yet.
That has to change. The act of preparing the country for another pandemic-scale disaster requires more than a substantial investment in public health or disaster prevention. When the officials responsible for our national recovery consider insulation — a buffer between the country’s most vulnerable people, and the consequences of our next tragedy — they should consider welfare, too. A nation with less child poverty is necessarily more able to withstand inevitable stressors like another recession or pandemic. Households would be further from the brink of ruin and thus have further to fall before they hit bottom.
There are significant obstacles to making the provisions of the ARP permanent, such as the filibuster. As long as moderate Democrats and Republicans hang on to old Senate rules in the face of a massive crisis, the road to a more humane future will be a difficult one. The ARP, though, shows us what’s possible when Democrats allow their political imagination to work. Within the ARP are a series of tacit admissions: America doesn’t have to be a country with a child-hunger crisis, with racial wealth disparities, with breadlines. We are as unequal as we allow ourselves to be.
Policy doesn’t necessarily change ideology, at least not right away. But perhaps it can move the needle. The ARP is broadly popular with all Americans, regardless of political affiliation. Only 21 percent of all voters polled by Politico and Morning Consult believe the plan offers “too much” support. Forty-five percent believe it offers the right amount, and an additional 24 percent believe it offers too little. Republicans are more likely to say the plan is too generous: 35 percent believe it goes too far. But that figure isn’t exactly a resounding condemnation of the plan’s welfare benefits. Public opinion may change as lockdowns lift and the economy continues to recover, but people tend to get used to benefits once they’re in place. The Affordable Care Act is more popular now than it was at its introduction. Seventy-five percent of people polled have a very or somewhat favorable view of Medicaid, the Kaiser Family Foundation tracking poll found in 2019 — a far from cry from its divisive birth a half-century ago.
The ARP’s provisions ought to be permanent. Now is the time to consider bold policies it hints at, like a universal basic income or, at minimum, an expanded child tax credit and improved unemployment benefits. The worst-case scenario might just be a more equitable country.