Biden’s COVID Spending Plan Could Cut US Child Poverty in Half

Biden’s COVID Spending Plan Could Cut US Child Poverty in Half

The $1.9 trillion spending plan signed into law by United States President Joe Biden Thursday provides more than just aid for the coronavirus health crisis. Some experts say it could cut the country’s rate of child poverty in half.

“This historic legislation is about rebuilding the backbone of this country,” Biden said as he signed the bill in the Oval Office.

More than half of the money will go directly to Americans. Some will receive as much as $1,400. Others will receive payments related to job losses, food, housing, health and child care. The rest will assist businesses, schools and state and local governments affected by the coronavirus health crisis.

A change in policy

In addition to the direct payments, the legislation, called the American Rescue Plan Act of 2021, would create a refundable tax credit of $3,600 for one year for children under 6 years of age, and $3,000 for children between 6 and 17.

Beginning in July, money will be sent to some families in monthly payments. The law also expands existing tax credits for people with costs related to the care of children and dependents.

The research organization Urban Institute estimated that it will reduce poverty by more than one-third and by more than half for children in the year 2021. The Center on Poverty and Social Policy at Columbia University estimated that the law will cause nearly 12 million Americans including more than 5 million children not to be considered poor.

"It's a huge change," said Sarah Halpern-Meekin of the Institute for Research on Poverty. She compared the legislation to the Social Security Act of 1935. That law established the system of retirement payments for older Americans which is paid for by the social security tax.

A study from the Tax Policy Center estimated that the law will raise the income of the poorest Americans by about 20 percent after they have paid taxes. The center noted that 70 percent of the tax savings will go to those making $91,000 or less.

The bill received no support from Republican lawmakers. However, a public opinion study from the Pew Research Center suggests a large majority of Americans, 70 percent, support the legislation.

Speaking after the House of Representatives’ vote on Wednesday to pass the bill, House Speaker Nancy Pelosi said, “This is the most consequential legislation that many of us will ever be a party to.”

She added, “We celebrate because we are honoring a promise made by our president, and we join with him in promising that help is on the way.”

House Republican leader Kevin McCarthy denounced the bill as an attempt to expand “socialism” in the country. He said it is a list of liberal proposals that existed before the coronavirus health crisis. He said it did not meet the needs of American families.

U.S. Speaker of the House Nancy Pelosi (D-CA) wields her gavel ahead of the final passage in the House of Representatives of U.S. President Joe Biden's $1.9 trillion coronavirus disease

Permanent or temporary?

As it is written, the law will be in effect until the end of the year.

Robert Doar is president of the research organization American Enterprise Institute. He said sending money to families will not solve the problems related to child poverty.

Doar wrote, “by sending out regular checks…the new proposals would undermine the structures in our safety net that have promoted greater parental involvement, increased work and training, and stronger parenting by both parents.”

Supporters of the new policy say the payments would help children’s development. They say it is better to create a permanent policy to help the poor similar to those offered in many European countries.

Indivar Dutta-Gupta is the co-executive director of the Center on Poverty and Inequality at Georgetown Law School. He said, "the president and those who have supported expanding the child tax credit are putting Congress in the position” of permitting the new law to end. He said: “…if they do, child poverty rates will roughly double on their watch…” He added, “…or they can find a way to extend the provision.”

I’m Jonathan Evans.

Hai Do wrote this story for VOA Learning English. Mario Ritter, Jr. was the editor.

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Words in This Story

backbone - n. the most important or strongest part of something

refundable tax credit –n. a tax credit that people can claim that is not tied to how much tax they have to pay

consequential –adj. important

check –n. (often) a piece of paper representing a payment from someone to someone that is carried out through a bank

promote –v. to make people aware of something; to make something more popular

provision –n. a condition that is included as part of an agreement or law

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