A new study released this week shows the tremendous impact of the American Rescue Plan, which was passed earlier this year with not a single Republican vote in favor.
That $1.9 trillion economic stimulus package was projected to reduce the annual poverty rate to 8.7% for 2021—it had been 13.9% in 2018—and to cut child poverty by more than half. The new study shows that, in fact, the poverty rate for 2021 looks to be even better — it is on track to hit 7.7%.
Still, the study’s authors project the 2021 poverty rate to be highest for Hispanic people (11.8%), non-Hispanic Asian American and Pacific Islanders (10.8%), and Black, non-Hispanic people (9.2%). For white, non-Hispanic people, the rate is projected to be 5.8%.
The study pointed to federal stimulus checks as the more important piece of this development. Those checks alone raised 12.4 million people out of poverty. Taken all together, recent antipoverty measures reduced child poverty from 30.1% to 5.6%. The child tax credit checks that have just begun to land in parents’ bank accounts this month are a huge part of that. Now we must make those credits permanent — they last only through the end of this year.