Biden's COVID relief plan will elevate 12 million Americans out of poverty

A new report by the Tax Policy Center shows that Democrats’ American Rescue Plan, the $1.9 trillion COVID relief bill passed by the Senate on Sunday, would drastically increase the income of the poorest Americans — even as Republicans in Congress falsely claim the bill is wasteful and unnecessary spending.

The Tax Policy Center report found that the poorest 20% of Americans will receive approximately a 20% income increase from the bill, while middle-class families will receive approximately a 5 to 9% increase.

According to the Center for American Progress, this is largely due to $1400 direct payments to families, with an additional $1400 per minor child and an unprecedented expanded child tax credit in the form of monthly direct payments to families.

Other line items that will help American families include extended unemployment benefits and reductions in health care premiums for those who are jobless or on marketplace insurance, CAP reports.

Children will be especially helped by the bill, which has been projected to reduce child poverty by half.

Indivar Dutta-Gupta, who serves as Georgetown Center on Poverty and Inequality’s co-executive director, told the Washington Post, “This legislative package likely represents the most effective set of policies for reducing child poverty ever in one bill, especially among Black and Latinx children. The Biden administration is seeing this more like a wartime mobilization. They’ll deal with any downside risks later on.”

A study by Columbia University’s Center on Poverty and Social Policy also found that the bill will decrease the overall poverty rate by almost 4%, elevating some 12 million Americans out of poverty — and making the poverty rate lower than it was before the pandemic.

Experts have touted the specific numbers by which the incomes of ordinary working-class Americans will increase.

The Center for American Progress notes that a childless worker making minimum wage will receive a total of $2,309 from the package, while a single parent who makes minimum wage with two young children under 6 will see $9,525 from the package, including direct payment for the taxpayer and two minor children, as well as the expanded child tax credit.

The Committee for a Responsible Federal Budget’s senior policy director, Marc Goldwein, told the Post that a family with two parents, one of whom is employed with a $53,000 income, the other unemployed, with two minor dependents, will ultimately see an extra $22,000 once the relief bill is signed into law.

The Post report notes that the amount received will vary based on the state in which they live, their household income, the number of children they have, and parental employment status, among other factors.

Experts say the bill could make a world of difference to American families in offsetting lost income due to the pandemic and staving off poverty, and polls show the bill enjoys broad popularity among Americans.

Morgan Stanley’s chief economist Ellen Renter said, “History and a strong body of research would tell us the only way to avoid more lasting scars on households and the economy is by not doing too little.”

But Republicans continue to slam the $1.9 trillion bill, criticizing it as wasteful and excessive spending.

“We can’t let the federal debt destroy our economy and the livelihoods of American families,” Sen. Rick Scott (R-FL) tweeted Tuesday. “@POTUS needs to admit his wasteful $2T ‘COVID’ spending bill only exacerbates this problem [the federal deficit] and start caring about what the debt means for future generations.”

Rep. Diana Harshbarger (R-TN) tweeted Tuesday morning, “It’s sad that this story is circulating when everyone’s attention should be on the Democrats ramming through the most partisan spending bill in the history of Congress.”

The Tax Policy Center’s study shows that the American Rescue Plan increases the income of the highest-earning Americans by 0%. Not a single House or Senate Republican voted for the bill.

Published with permission of The American Independent Foundation.