Bigger Child Tax Credits Can Pay Dividends for U.S.
As debate over President Biden’s spending plan continues in Washington, here’s a rundown of the benefits of government aid to families.
Maybe people would have more children if they got more help.
Photographer: George Frey/Getty Images
That the Covid-19 pandemic would bring a big decline in poverty in the U.S. is not something a lot of people were predicting back in March 2020. But that’s what seems to have happened, at least if you go by — as most poverty researchers do — the Supplemental Poverty Measure introduced by the Census Bureau in 2011 to take into account both government assistance programs and unavoidable expenses that are not reflected in the official poverty rate. The percentage of Americans below the SPM poverty line fell to a record low 9.1% in 2020 from 11.8% the year before, the Census Bureau reported in September, while the Urban Institute projected in July that the rate will drop to 7.7% in 2021.
The chief cause of this poverty drop was the unprecedented gusher of federal social spending that began with the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act of March 2020 and continued through the $1.9 trillion American Rescue Plan of March 2021. The success of all that spending in keeping the Covid-caused recession short and stimulating a quick recovery should hold lessons for government policy in future downturns, but as a way to fight poverty year in and year out, it’s probably not sustainable either economically or politically.