On March 11 President Biden signed into law the American Rescue Plan Act as a multi-faceted response to the COVID-19 pandemic and the widespread economic dislocation which it has caused.
There are so many provisions in the $1.9 trillion-dollar law that a short treatment like this cannot possibly cover them all. For three primary reasons, I am focusing on the impact of the law on lower-income individuals and families. First, lower- income families have suffered the most from the pandemic-devastated economy. Second, lower-income families will benefit more from the Rescue Plan because more benefits are targeted on those at the bottom of our economy. Third, there is a special concern in Catholic social thought for those who are the poor and marginalized in any society.
The Urban Institute has analyzed four components of the Rescue Plan which together have a demonstrable impact on the projected poverty rate for 2021 and on the racial disparities of poverty in this country. The four provisions are: (1) extension for 25 weeks through Sept. 6 of the pandemic-related unemployment insurance benefits; (2) extension for three months until Sept. 30 of higher Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp Program); (3) one- time $1,400 direct recovery payments to individuals, $2,800 to married couples, and $1,400 for each dependent; and (4) provision of monthly advance payments beginning in July 2021 of the increased child tax credit for the 2021 tax year. The second half would be paid monthly in 2022.
Without these new benefits, the projected level of U.S. poverty for 2021 under what is called the Supplemental Poverty Rate is 13.7%. The combined effect of these four provisions alone is to reduce the poverty level by more than a third to 8.7%. This would reduce the number of people living in poverty by 16 million people, from 44 million to 28 million.
In terms of racial disparities, these four provisions combined would reduce the poverty rates as follows: for Black, non-Hispanic people by 42%, from 18.1% to 10.5%; for Hispanic people by 39%, from 21.9% to 13.3%; for white, non-Hispanic people by 34%, from 9.6% to 6.4%.
Many other provisions of the new law will benefit lower-income families, as well as others. There are improvements and increased funding for WIC,
energy assistance, water bills, COVID-19 relief, vaccinations, school and child care reopenings, state and local governments, the Earned Income Tax Credit, Head Start, the Community Development Block Grant, Medicaid expansion and premium assistance under the Affordable Care Act.
The sponsors of the $1.9 trillion law project that the combined effect will be a strong stimulus to the economy, in addition to all the targeted effects for low-income families and particular people, programs and state and local government services.
Concerns about the law include: the complete absence of Republican congressional support, elimination of a minimum wage increase to $15 an hour as well as any moratorium on evictions and foreclosures, exclusion of undocumented people from most benefits, failure to include the long-established, bipartisan Hyde Amendment language to prevent federal funding of abortions and the temporary status of many improvements. In addition, despite the four highlighted programs which reduce poverty, there still will be tens of millions of Americans living in poverty this year.
Father Kammer is a Jesuit priest, attorney and director of the Jesuit Social Research Institute who also served as executive director of Catholic Community Services of the Diocese of Baton Rouge from 1984-89. This column is reprinted with permission from the Jesuit Social Research Institute, Loyola University, New Orleans.