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Just the Facts...

Just the Facts…. The U.S. versus Britain in the race to reduce child poverty. They are winning, we are losing. Here’s what could change the balance.

This is a post written a few months ago, just after the passage of the American Rescue Plan Act (ARP). At the time, I was delighted by the legislation's mandates regarding the reduction of child poverty. Something frankly that I’ve been waiting to see for years! However, like all other advocates, my mind quickly moved on to the next policy, the next bill, the next legislative promise. And admittedly, I became rather myopic about what came next, fixating on the growing child and adolescent mental health epidemic and becoming rather disappointed in the lack of policy activity attempting to mitigate this life-or-death situation. However, I listened to a webinar yesterday on the impact that the ARP could have on reducing child poverty-which, by the way, costs this country 1 trillion dollars a year-and was reminded of the many groundbreaking provisions in this bill So, to the extent that I can, I would like to draw attention to those provisions and help explain how the U.S. could achieve what Britain has already accomplished.

Let's begin with what has been happening across the pond for the last twenty years. In March of 1999, then Prime Minister Tony Blair committed the British government to a 20-year program to reduce child poverty by half of its current level. The plan focused on tackling societal dilemmas that contribute to child poverty, such as lack of health care, lack of adequate education, un/underemployment, as well as broader issues such as the need to restore a sense of mutual responsibility like that of the post-war era. Now -- twenty years later -- Britain's child poverty rate is half of what it was when Blair announced the initiative, and children across all income levels are faring better when measured for social and educational achievements. Back here in the U.S., advocates looked on with envy wondering why our government couldn't/wouldn't do the same thing. After all, our childhood poverty rates are embarrassing at best and tragic at worst. Finally, however, it appears as though our government has recognized not only the need for intervention but a comprehensive policy plan that could have a tremendous positive impact in this critical area. But can we really reduce poverty in this country? Haven't social welfare policies and programs been working towards this for centuries? The answer to these questions is, cautiously, a "yes" and a "yes." Let me explain.

On March 11, 2021, President Biden signed the American Rescue Plan Act (ARP) of 2021 (H.R. 1319) into law. The $1.9 trillion package, based on President Biden's American Rescue Plan (his proposal versus what became the modified bill), is intended to combat the COVID-19 pandemic, including the public health and economic impacts. Buried in the 600-page bill and obscured by the debate over the removal of the $15 minimum wage provision, the recent $1.9 trillion stimulus bill contains an "extraordinary increase in safety net spending in the largest anti-poverty effort in a generation." In fact, the Center for Poverty and Social Policy at Columbia University estimated that the package could reduce child poverty by 57% in just one year. So, just how would this happen?

The plan's most obvious anti-poverty measure is the "stimulus checks" or "direct" payments to families. Families who qualify and have children under the age of five will receive a total of $3,600.00 for one year through monthly payments. Families with children over the age of five will receive $3,000 per year and distributed in the same manner. While over the course of the pandemic the federal government has issued stimulus checks at other points in time, one of the critical distinctions between these checks versus others is the structure of the payment. By spreading the funding out over the course of the year, the hope is that families will plan their monthly income and expenses knowing that a fixed amount of funding will be available each month. This stability will enable those families to both purchase and save for basic needs and unexpected expenses.

However, the bill's benefits are much more comprehensive than just these payments. The American Rescue Plan also includes expanded funding for rental assistance and food stamp programs, a broadening of eligibility under the Affordable Care Act, and an increase in subsidies for unemployment benefits and childcare, and a significant commitment to early childhood education programs. To advocates working with this population, this bill holds tremendous promise. However, once enacted a bill goes through many processes that can alter its effect once implemented. So how so we know if this bill will succeed? We don’t. Much depends on the politics and the willingness of our government to continue to commit to these critical provisions. The success of Britain's commitment to ending child poverty was directly tied to support across the aisle. In 2010, the Child Poverty Bill, which re-emphasized Tony Blair's plan and established a non-governmental Child Poverty Commission to monitor progress, passed with the full and vocal support of both liberals and conservatives. On the other hand, the American Rescue Plan required congress to use a budget process known as reconciliation to increase the potential for its passage in a very narrowly divided Senate. In fact, the bill passed in that chamber by a vote of 49-50, meaning that no Republicans voted in support of the bill.

However, to be fair, the bill contained many controversial policy changes for both parties, so we cannot say with certainty that congressional members were voting against child poverty policies if they opposed the bill. And as far as voter and constituent support for the bill goes, as I mentioned earlier, the anti-child poverty provisions were not necessarily as visible as other aspects, nor frankly understandable to those who weren't looking for them and familiar with the issues. Still, the bill represents a sharp reversal of Trump's 2017 tax-cut package that mainly benefitted corporations and wealthy Americans. The ARP’s supporters hope that the American Rescue Plan represents Biden's commitment to stoking economic recovery through investing in low and middle-income Americans. "The American Rescue Plan is the most ambitious proposal to reduce child poverty ever proposed by an American president," Jason Furman, a Harvard economist, told Nicholas Kristoff of the New York Times.

Columbia University researchers are hopeful that this could turn out to be one of the most effective anti-poverty laws in a generation, able to cut poverty overall by a third and child poverty by half in 2021. Tax credits for struggling parents, expanded medical care, and putting food in children's mouths could truly transform the country. Taken together, Biden's economic team is hoping that the benefits will power a rapid increase in economic growth made possible by directing money to people in need of immediate help versus those with the ability to save the funds for later use. "Focusing on marginalized workers," said Janelle Jones, the chief economist at the Labor Department, "is really the way to make sure we are lifting all boats."

Before the pandemic, the United States had one of the highest rates of child poverty in the world, and the economic devastation felt over the last year -- primarily by low and middle-income earners -- has only exacerbated this already dire situation. By enacting policies that impact a family's financial stability and therefore enabling the opportunities that follow, the U.S. may do what our allies have already done-- recognize that child poverty is the barometer of a nation's well-being, and at present, we are not a "well" nation.

*Contributing author: Lauren O’Neil


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