The 1.9 trillion-dollar COVID relief bill, known as the American Rescue Plan, is the largest government support program in more than fifty years. Some have called it transformational; however, experts discuss its benefits and shortcomings.
Congressman Raja Krishnamoorthi, who represents the 8th district of Illinois and serves on the Select Subcommittee on the Coronavirus Crisis states his thoughts on the relief bill: “I think it’s fair to say this package is a game changer. It will help our economy and will help America heal. This is a big win for the American people. Eleven million people will have their unemployment insurance extended. Businesses will have access to new grant programs. Schools will be able to safely reopen. Housing and nutritional assistance is being put forward as well. One of the biggest components, which I helped spearhead is state and local aid. It fell on deaf ears during Trump administration, but we know it is necessary for a few reasons. Sales tax revenue has declined for many states and cities. Those governments are faced with one of two options: either hike taxes or cut services, but none of those are acceptable during a pandemic. Giving these municipalities support they need through funding is very essential.”
Chad Stone, the chief economist at the Center on Budget and Policy Priorities, adds his own comments about the bill: “The plan addresses three issues: getting the virus under control, relieving the hardship and uncertainty, which is acute among the Black and communities od people of color. And third, it provides stimulus for economic recovery. It also includes critical housing assistance and needed funds for communities that are facing evictions and other hardships. Almost all of these are short term provisions, but they provide guidance on the kinds of policies we may want to pass later on. Turning to unemployment insurance, there is an additional $300 per week as a federal supplement for all unemployment insurance programs. These measures assure no one is at risk to run out of benefits. We believe the number of people who are actually unemployed may be higher than what is reported. Because of the pandemic, the Census collection of data for calculated unemployed was impaired to a degree.”
Elaine Maag, a research associate in the Urban-Brooking Tax Policy Center at the Urban Institute, adds: “I want to set the scene for low-income families. Two pieces of the rescue plan are very important for them. One is the economic impact payments and the other is the increase of the child tax credit. These are two cash benefits that will affect a very large share of low-income families. White families are projected to have a poverty rate of under 10%. Black families were projected to have a poverty rate of 18% and Hispanic families are projected to have a poverty rate of 22%. The American rescue plan cuts those rates substantially. The poverty rate for White families would drop to 6.4%, for Black families to 10.5% and Hispanic families to 13.3%. The group most positively impacted is children under eighteen.”
Dr. Sekou Siby, the president and CEO of ROC (Restaurant Opportunities Center United), which is building restaurant worker power and promoting policies that improve the lives of service low wage workers adds: “Over 75% of the nation’s restaurant workers are women, people of color and immigrant. Over a third do not have enough of an income to make ends meet, living below the poverty line. Seventeen percent of all service workers rely on public services, like food stamps and Medicaid, while working long hours to make ends meet. Living wage in California is $18.66, while minimum wage is $12.00 per hour. The living wage for a single parent with one child is $40.00 an hour in California. There is a huge gap between the amount of income people need to live on and what they are actually making, which is why dependence on government is so high. In California, 88% of children under 18 will benefit from the package and 553,000 children will be lifted out of poverty. A solution to this, we believe, is to pass the Raise the Wage Act, which was passed in the house in 2019 and if passed this year, would increase the minimum wage by 2027. Too many workers still depend on public assistance and this is a good first step to combat this.”