The Biden administration’s $1.9 trillion American Rescue Plan is a complex legislative prescription for the economic hardship COVID-19 has inflicted on families like Shawn’s. The plan aims to affect a massive economic recovery by putting more money into the hands of more Americans in need.
The Center on Social Policy at Columbia University has estimated that the American Rescue Plan will cut the child poverty rate by as much as 56% this year, which would affect children of all races. The poverty rate for Black, Hispanic, and Indigenous children, who are disproportionately affected by both poverty and COVID-19, would decline by 52%, 45% and 61% percent, respectively. However, as the Children’s Defense Fund’s Director of Poverty Policy, Emma Mehrabi, cautions, “Th[is] data will only live up to its projections if families—especially the hardest to reach—know about the benefits [offered through the plan] and can easily access them. So we need to make sure that families and communities on the ground are aware of this program, and we need to work aggressively to get them signed up.”
Effectively, parents who receive the CTC under the Rescue Plan are getting a small taste of what it would be like to have a guaranteed minimum income to support their children. According to a recent UNICEF report, at least 23 countries guarantee a minimum income for families with children.
Payments in support of children have appreciably reduced child poverty in real time, but have also produced more benefits. For instance, in Canada, research has shown that children with a guaranteed income improved their performance in school, had better health outcomes, and earned more income as adults.
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