Trump's (and Biden's) Federal Pandemic Aid Has Cut Poverty nearly in half, Study Finds

https://www.npr.org/2021/07/31/1023243870/federal-pandemic-aid-has-cut-poverty-dramatically-study-finds

Federal Pandemic Aid Has Cut Poverty Dramatically, Study Finds

Though it's unclear whether bans on evictions will be extended past today's deadline, federal aid programs that were expanded during the pandemic are having a significant impact on poverty in this country. A study out this week from the Urban Institute found that these programs are on track to cut poverty nearly in half from prepandemic levels, bringing the percentage of Americans in poverty to the lowest level on record.

To put that in perspective, in 2018, the annual poverty rate was 13.9%. This year, it's at 7.7%. But many of these programs are set to expire. So what happens then? For that, we've called Greg Acs. He's the vice president of income and benefits policy at the Urban Institute. Greg Acs, thank you so much for joining us.

GREG ACS: Good morning.

SNELL: So poverty in America has fallen by nearly 45% over the course of the past three years. That shift, as your work points out, is due largely to a vast expansion of government aid programs, many of which were long-standing ideas that were applied or expanded during the pandemic. What shifts are you seeing?

ACS: In response to the unprecedented unemployment and dislocation that came as a result of COVID in the pandemic, Congress and the president - both presidents, actually - substantially increased support, at least in a temporary fashion, to American families, from stimulus checks to expanded unemployment to increased support through food stamps in the SNAP program.

SNELL: The drop in poverty among children specifically has been significant. The child tax credit is one of those pandemic expansions that Democrats say will cut the poverty rate even further. The program itself isn't new, but it was expanded during COVID to make it a monthly payment and allow very low-income people to access the benefits. Democrats, including Treasury Secretary Janet Yellen, want to make it permanent. What kind of effect does the child tax credit in particular have on these low-income families and on the poverty rate?

ACS: So the child tax credit was expanded in several ways. The benefit increased from $2,000 to $3,000 for kids ages 6 to 17. It increased to $3,600 a year for kids from zero to 5. And 17-year-olds can now get the benefit. Now we have some additional research that looks at what would happen in this type of expansion of the child tax credit in a normal year. And we find that this expansion would reduce child poverty by over 40% in a typical year. So if this program continues, even when all the other extra programs fade away - no stimulus checks, no enhanced unemployment, SNAP benefits go back to their previous levels - just expanding the child tax credit would reduce child poverty by over 40%.

SNELL: There is some bipartisan agreement that there should be a focus on bringing children out of poverty. But some conservatives argue that the child tax credit - the way it's structured right now, not requiring parents who receive the benefits to be employed, is an inefficient way to address the issue of poverty. How do you respond to those claims?

ACS: So it's a question of how you view what it takes to get people stably employed. And so if you are providing a basic floor of income, you know, $250, $300 a month, does that stabilize families and let parents work? Rather than saying, oh, we've got money, we don't have to work, it actually allows them to deal with all the issues that keep them from being stably employed.

If they have a car repair, if they have an emergency expense, they will have the money to pay for it now. And that can keep them employed. If they in the short term decide not to take a job that has rotating hours so they can commit to a training program or a community college course, this money lets them do that, and it can lead them to be stably employed in better and better jobs.

So, yes, we have the argument, you know, you give people money, it reduces their incentive to work. On the other hand, if you don't have a basic floor, you know, that floor provides the platform from which you can work in advance.

SNELL: So this is not just an issue of extending benefits for people during an extraordinary economic time of this pandemic. This is about, you know, creating a long-term changes for families that were struggling.

ACS: The changes to the child tax credit is a new fundamental approach to reducing child poverty and to help families who are struggling in the long run move more permanently out of poverty.

SNELL: Many of these programs, as we've said, from rent relief to expanded unemployment and the broader child tax credit we've been talking about - they're all expiring in the coming months. Does that mean that all of the progress we've seen and we've been discussing in reducing poverty could be temporary?

ACS: So we'd expect to see as these programs - the unemployment insurance, the stimulus checks, which were particularly strong at reducing poverty, go away, we would expect to see poverty go up. What we have achieved, however, is that we kept families from going off the rails. We prevented extreme hardship and extreme instability that would take potentially years to unwind. It was a life raft, and it got people through. And we'll see where they go from there.

But what this did demonstrate is that, you know, for years, we've heard that while we have more will than wallet to combat poverty, we opened up the wallet and we can see what the effects are. And we can see that even if all these programs, extra programs go away, if we maintain at least the child tax credit expansions and particularly full refundability so the lowest-income families can access the child tax credit, we can have a sustained impact on child poverty. And by reducing child poverty, we should start seeing benefits accrete as children have more stable homes, more resources, get through school and move up into the labor market and into successful adulthood.

SNELL: That was Greg Acs, vice president of income and benefits policy for the Urban Institute. Thanks so much for being with us.

ACS: Sure thing.

Edit:

My phone is a bit weird with its compatibility with gamespot forums.

Second, I truly think credit belongs to Trump on this for passing the pandemic aid relief program. It's perhaps the best case anyone has made for a UBI in America ever, regardless of whether it was intended or not. Thirdly, Biden deserves some credit for continuing the aid, albeit not as strongly as when Trump passed it initially, but he did get the child tax credit going so that does help parents at least a bit."

If you're going to create a topic, provide linkage to the source (if there is one) and not copy/paste an entire piece with no context.

Edit: Fixed topic, open for discussion!

Ugh, tell me about it. Even when forcing it into Desktop mode from a mobile device I sometimes have to manually alter the markup.

Man, I completely agree. A lot of people want to skirt around giving credit to either Trump or Biden on this specifically or the economic recovery writ large, but effective policy is effective policy and we should cheer it regardless of the source.

Yup.

It's important to remember that Trump is not a Republican, does not stand for traditional Republican values; we should be surprised if he did things that seemed very un-Republican, and means even some positive things like welfare stuff that the GOP would traditionally balk at.

But yeah, who cares where it's coming from. In the end they're both politicians and therefore both scumbags, as long as we get what we need from them.

Now only if prices would go back down to where they were, heck, even at the start of the beginning of the pandemic because inflation seems like it picked up as it dragged on.

@Serraph105: its not a surprise, that $3 trillion in debt driven stimulus packages will drive down poverty.

The question is who's paying for it? And I mean yes I feel it was fine for a while with the pandemic but now things are heading towards normal. The only ones paying for this debt will be the children and grandchildren and beyond, who will be taxed to no end in order to just service the interest on the existing debt.

Trump did a lot of bad, but the good stuff he did should not be overlooked.

Damn socialist!

Nobody has cut poverty in half. With the debt skyrocketing all you've managed to do is pass that poverty onto your children.

That’s great news! But, always a but, will this last?

The stimulus programme is set to run out and I think that plus the relatively high level of inflation could reverse much of these gains in the coming months.

@eoten: Yeah, we would definitely have to increase taxes to pay for this long term, and I would be okay with that. Overall it would be a benefit for people that are struggling, while not being a terrible burden on those of us who aren't. Plus, as the interview points out, this kind of money opens leeway for people to takes steps that would get them out of poverty long term. One of the unintended consequences of wellfare-to-work is that, while people would find jobs faster, they tended to be dead end jobs that rarely got them completely out of poverty and off public assistance.

Maybe you would, but a lot of people wouldn't. Raising taxes in the long run means less income to pay bills, those bills will probably go up, that means less money to buy stuff for yourself, for your family, home ownership goes down, and the poverty comes back ten fold. Sure, government will tell you they'll make the rich pay it if you vote in those to support a tax hike on the rich, but then, being rich, they have the money to move elsewhere and do, then who pays for it?

Those struggling now just end up struggling harder later. You are effectively denying your children and grandchildren a better quality of life to pay for self interest today. when you consider out of all that money changing hands, how much is taxed, how much goes to which programs, and the large amount the bureaucracy/politicians skim off of that, the costs of those programs go up, while the amount of money people receive will stay the same or go down. It's basic wealth redistribution.

The reality is, UBI is a fantasy that the bureaucracy ran by those politicians tell people to buy their votes.

Not surprising economically things go better with Dems in WH historically.

@eoten: "The reality is, UBI is a fantasy that the bureaucracy ran by those politicians tell people to buy their votes."

Trump sure made it work during his last year in office for it to be a fantasy.

@judaspete: You pay as much in taxes as you want, me, I don't want to pay another dime, hell I don't want to pay what's asked of me already.

@vfighter: Enjoy prison.

@vfighter: Based. Another ancap?

@Serraph105: It didn't work, and Trump's an idiot for not having more of a backbone against the bleating garbage in Congress that pushed for it. Even refused to sign spending bills if he didn't. And if you assume this "worked" then you can't seem to think ahead past the present. Someone will pay for all that money sent out, and it won't be "the rich."

@eoten: This results in lower taxes for parents. It's a tax credit.

You're only thinking of the immediate future.

I am not sure what to make of this topic. In theory, I could make everyone a millionaire by sending them a cheque. And I certainly don't see how this makes a case for UBI. One needs a funding mechanism that doesn't depend 100% on debt.

Honestly, I don't see how this is anything more than a statement of the obvious. Gee guys, I made poverty go down temporarily by giving money to people via debt, including to a whole bunch of people who didn't need it.

It was obvious only my genius that realized 70% of the economy is consumer driven. I did what every no other leader of a major economy did and propped up the people. Including the poverty stricken. Their lives are changed for weeks, if not months. I be awesome.

Tax credits aren't sent out.

That's because you aren't an American. We have a cottage industry dealing Ayn Rand bullshit about stating things like minimum wage increases don't help workers and that anti-poverty programs hurt the poor and shrink the economy.

I know it's obvious to anyone with two brain cells to rub together and who is being honest. Unfortunately, we live with a lot of people who lack one of both of those requirements, and hence are dealing with a major political party that passes legislates and governs contrary to what it is obvious.

We are not a healthy, functioning country politically speaking.

Not at all. You're assuming I am.

I, and I presume Serraph as well, is viewing this as a pilot to simply empirically show that the most obvious way to decrease poverty is to directly lift them out of poverty. I know that that's how a bunch of economists are viewing it, because they're waving it around in papers saying, "See?! We told you it was this simple!"

If something were to be implemented long term it would need to be paid for via taxes, but since inequality continues to grow in the US and economists are urging for it to be tamped down.... kill two birds with one stone.

They're largely viewing it as a UBI pilot, but I'm more flexible. A UBI is simply the more direct comparison (and is the mechanism traditionally preferred by right wing economists such as Friedman).

WH is already letting eviction protections expire. This wont last long at all.

It’s a fact that the US government overspends. It simply needs to cut back in some areas and spend it on those who really need it.

Spending less on the military is the obvious choice.

2019 Budget

It's a fact that it is a revenue problem more than a spending problem.

Three quarters of spending is on mandatory social programs like social security, medicare, unemployment (65%) and debt (10%).

Of the remaining 25%, roughly half is defense and the other half is all other departments.

Even if you completely eliminated every cent of defense spending the US would still run a deficit.

If you completely eliminated all discretionary spending by shutting down the entire gov't except running the social programs you would only have a minor surplus.

The problem cannot be solved by "simply cutting back on some areas and spending on those who need it".

That doesn't mean they couldn't cut a few hundred billion here and there including defense, but that won't solve the problem.

It doesn't work that way. You cannot spend people out of poverty. This has contributed significantly to debt which means it no more lifted them out of poverty than they would have been maxing out a credit card. And who is going to pay for those taxes? The 1% aren't, they'll move and you won't even be collecting the taxes they pay now. It'll fall to the middle class not only failing to live others out of poverty, but dragging millions right into it.

UBI is a fantasy told to buy votes from people who do not want to get a job.

@eoten: Economists > Eoten

@mattbbpl: You have a few economists that may agree with you, and there's a **** ton that agree with me. You're being selective of the ones you listen to and using them in an "appeal to authority" argument ignoring the ones that disagree, as well as ignoring basic common sense.

@eoten: And yet empirical evidence has proven you wrong

@mattbbpl: Really? Empirical evidence? You mean your silly little interview published by NPR that is disingenuously trying to equate Covid relief to UBI? That was an op-ed.

@eoten: Why is that? What's the difference between giving people money and reducing poverty this year and giving people money and reducing poverty next year?

On that same point, why is it that when debt financed tax cuts primarily benefitting the wealthy are introduced they're worth it and pay for themselves through growth, but when such cuts are introduced primarily benefitting the middle class and poor it's the end of the world?

@SUD123456: It is clearly a spending problem, everything you listed is spending.

If you cannot afford it then reduce expenditure and live within your means.

Giving people isn't going to reduce poverty. Again, it results in increased taxes and inflation, both of which increase costs of living and results in more poverty. What is so hard to believe about the concept that money doesn't grow on trees? Government cannot give you a $1000 check today and not have to take that money from someone who actually worked for and earned it tomorrow. There's no way tax increases and devaluing currency is going to benefit the middle class. The middle class is the ones who will be paying for it.

Surprising to say I actually agree with this guy for once.

Or they could increase taxes/close loopholes on those who abuse the system.

Social aid and social security is not equivalent to socialism. I guess some people never get it.

@palasta: One thing I've learned here is that everything is socialism and nothing is socialism depending on the wind direction.

He was being ironic.

@eoten: I equated the covid relief aid to UBI. The article really didn't do that, but I consider it to be a good comparison because the unemployment money gave people a guaranteed weekly income that people could count on for a time regardless of whether they had a job or not and, unlike normal unemployment, its enough to actually pay bills.

Mh, no. Actually its easy to understand once you get the jiszt of it.

Agreed the GOP really has to stop using that word incorrectly.

But hey when you can keep scaring your poor voters into harming themselves with a buzzword.....

Re-examine what he described. Discretionary vs. Non-discretionary. 'Live within your means' is a fairly hollow phrase as it implies a static revenue stream. Governments have the ability to expand and contract their cash flows at will. It isn't comparable to a household.

If I set an arbitrary 100 dollar limit a year on government spending with a 1 trillion dollar dollar GDP, you wouldn't say I have a spending problem if I only brought in 50 bucks via taxation. The US easily has the means to bring in increased revenue, A LOT MORE in fact.

@HoolaHoopMan: You're not keeping the Laffer curve in mind. Anytime you raise taxes, revenue goes down.

Your 'analysis' is amazing.

I give you a link to the 2019 budget that gives you both spending and revenue in detail. You ignore the revenue side.

I point out that 75% of the spending side is fixed/statutory/mandatory. You don't grasp what that means.

You apparently want 'to spend money on those that needit'but don't seem to grasp that you can only balance the budget on the spending side by cutting significant money to those that need it.

I give a link that shows Revenue as a % of GDP lower today then 20 yrs ago in every tax category

I give a link that shows a major mis-match between payroll taxes and corporate taxes vs the mandatory program spending that they should fund.

I give a link that shows just how pitifully small corporate taxes actually are both in terms of revenue and effect on program funding.

I assume you can remember Trump's tax cuts in 2017 in the midst of a red hot economy. Reducing revenue.

I assume your 'logic' is that further hypothetical tax cuts in 2022 wouldn't be a revenue problem...but rather it would be a 'spending' problem.

I assume you are at least dimly aware that mandatory funding for social programs at the Federal level in the US are already bottom tier vs comparable countries and that cutting them would be a material hardship on tens of millions or people.

And I assume you are at least honest enough to acknowledge that I said the US could partially address the problem through spending, but that it is more of a revenue problem then a spending problem.

Other then the foregoing, your analysis is spot on. It clearly just means 'cutting back in some areas and giving it to people who need it.'

It's amazing. Imagine if you lost your job and survived on the bare essentials, then someone told you, 'You have a spending problem', simply because you ended up in the red each month.

@SUD123456: Thanks for your condescending tone, it’s highly smart of you to do so. I can imagine how others enjoy your company.

Mandatory programmes are not actually mandatory when you cannot afford them, which is the case in the US.

Other governments have run austerity policies in history to better manage their finances.

If you can’t seem to accept such a simple concept, then there really isn’t much to discuss here.

@kadin_kai: You'll have to forgive, SUD. He's a smart cat, but he's getting a crash course in how half of our population ignores the obvious in favor of simplistic bumper sticker slogans pushed by their propaganda outlet of choice.