The widespread increase in government aid prompted by the coronavirus pandemic will cut poverty nearly in half this year from pre-pandemic levels and will change the share of Americans in poverty to the lowest number on record.
The number of underprivileged Americans is anticipated to fall to 20 million from 2018 levels, a decline of almost 45 percent
This is the most substantial decrease in the poverty rate the country has ever seen, in such a short period of time. This drop defies the economic headwinds since the economy has almost seven million fewer jobs than it did before the pandemic.
The three programs that cut poverty most were stimulus checks, increased food stamps, and expanded unemployment insurance which have either ended or are scheduled to soon return to their pre-pandemic volume.
The Biden administration has started to make monthly payments to most families with children through an expansion of the child tax credit. The child tax credit offers families up to $300 per child a month, regardless of parental employment status.
Progressives said that the new numbers we are seeing, reflect government programs and political choices that could reduce the economic needs.
On the other hand, conservatives say that pandemic-era spending is unsustainable and has the potential to ultimately harm the underprivileged long term. Arguing that continuous aid will discourage work.
Democrats and Republicans remain divided over federal aid and future safety net spending. However, on Wednesday, a bipartisan group of senators agreed on approximately $550 billion in new spending for roads, bridges, and infrastructure projects.
Measuring poverty is litigious. Many conservatives accuse the left of exaggerating the recent poverty decrease, to justify an increase in spending. They claim that the government’s methodology undercounts the benefits people receive and overstates what it takes to meet basic needs.
The Urban Institute changed the government’s approach to correct the undercounting but still found that the methodological issues did not alter the conclusion that poverty fell. “We are applying a consistent measure to both years”, said Laura Wheaton of the Urban Institute.