The federal government’s latest COVID relief package, the American Rescue Plan, could be a potentially game-changing step toward fighting poverty in America and lifting up lower-income families.
In a new Brookings Institution brief, researchers Megan Curran and Christopher Wimer identify a group of executive actions and Congressional proposals that might support low- and moderate-income families and reduce poverty. Using the newest data available from the Census Bureau’s annual Supplemental Poverty Measure, they try and quantify how effective each action or policy would be at lifting people, especially children, out of poverty.
The research checked out executive actions that would remove barriers to family assistance programs, further policies that might increase food assistance, tax credits, and student loan forgiveness; improve access to health care; expand housing assistance programs; raise the earnings, and increase the recruitment of young adults through federal hiring programs.
Here’s a glance at several key anti-poverty measures the Biden administration could take and their assessed impact on people’s financial well-being.
By reducing the value of food, this important intervention reduces both food insecurity and poverty. In 2019, a median of 36 million individuals participated in SNAP monthly. However, Brookings researchers found that the formula it’s supported doesn’t reflect the particular cost of a contemporary family’s food budget or updates to nutritional guidelines.
Making Earned Tax Credits and Child Tax Credits easier to file
The Earned taxation Credit and Child diminution are highlighted as a number of the foremost important anti-poverty tools at the government’s disposal. Together, the tax credits keep scores of people out of poverty every year.
Brookings researchers found that some families and individuals who are eligible don’t receive the credits because of complexities in tax filing. Executive action could encourage the IRS to create claiming these credits easier for families and increase participation rates among eligible families. Ensuring these credits reach all who are eligible but don’t currently receive them could move a minimum of 1.2 million more people out of poverty.
Canceling student debt
Ultimately, canceling $10,000 in student debt per person — at a price to the national of $376 billion — would only raise disposable incomes among poor families by $23 per annum, and “near poor” families by a median of $37 each year. Researchers caution that given the tiny sample size and also the dearth of knowledge on this subject, estimates may vary. They’ve needed more research and better data collection to produce a more accurate assessment of the impact of student debt cancellation for poor and “near poor” families.