WASHINGTON — Poverty fell to a new low last year thanks to new federal spending passed in response to the coronavirus pandemic, according to new federal data released Tuesday.
Extra unemployment benefits, stimulus checks and a monthly child allowance helped push the poverty rate to 7.8% in 2021, according to an annual Census Bureau poverty measure that accounts for tax benefits and stimulus payments. The rate had been 9.1% in 2020.
Democrats included the various relief policies in a $1.9 trillion bill called the American Rescue Plan, which passed Congress on a party-line basis in March 2021. The bill represented Democrats’ vision of a more humane political economy that better supports parents and laid-off workers.
Republicans pilloried the Rescue Plan as too much spending on an economy that was already improving, and they have blamed it for the record price inflation that has tanked consumer sentiment this year.
Economists have said that yes, the bill did contribute to inflation, though there’s an ongoing debate over how much prices would have risen anyway due to pandemic-related supply chain problems.
Democrats have celebrated early estimates suggesting that their temporary changes to the child tax credit, which provided monthly payments to parents in the second half of last year, produced a record decline in child poverty. But inflation has remained a top concern for voters.
This is a breaking story that will be updated.
