Matt Katz: Welcome back to The Takeaway, I'm Matt Katz in for Tanzina Vega. Today, the House of Representatives is expected to pass a $1.9 trillion stimulus package marking the one-year anniversary of the start of the coronavirus pandemic. The American Rescue Plan, which passed the Senate over the weekend along strictly partisan lines, is President Biden's first significant legislative initiative. In an attempt to fight the economic downturn caused by the pandemic, the bill will inject the economy with an unprecedented amount of federal aid that targets families in need of assistance. With me now is economics correspondent for The Washington Post, Heather Long. Heather, welcome back to The Takeaway.
Heather Long: Hi, good to be back.
Matt Katz: Heather, talk to me about the most significant pieces of this $1.9 trillion aid package.
Heather Long: Certainly, everyone and many people in America are buzzing about another round of these $1400 checks coming out, those could go out within a matter of days of this package being signed by the President. We're expecting 150 million households to get the checks this time. That's down a little bit from the 168 million households that received the December package and the one last spring, but there's so much attention to checks, people forget that there's a lot of other things in this bill. It extends unemployment insurance through Labor Day with an extra $300 a week.
A lot of people are talking about it as a big anti-poverty move, and the reason they say that isn't because of the checks, but because of about $200 billion in new tax credits that are specifically directed towards lower-income families. Just to say briefly, that's the child tax credit, the earned income tax credit in the childcare, the Child and Dependent Care tax credit. When you put all those together, that is another big boost to families. The other two biggies in this bill are $350 billion to states and cities, we did not see anything like that in prior bills, and of course, more money for vaccine distribution.
Matt Katz: You've reported some startling numbers related to what this means for people in poverty. The bill would take nearly 13 million Americans out of poverty, reduces the number of children living in poverty by 40%. My first thought of reading this was, the pandemic is, ironically, really expanding the social safety net in a way we haven't seen in a generation maybe, isn't it?
Heather Long: It is. What we know is when you look at who's been hurt the most by this pandemic, it's basically families who were earning $14 an hour or less, and they've just been decimated. Sitting here in March of 2021, that's still a great depression-like scenario for people who earn $14 or less, whereas people who earn $20 or more, have actually seen their jobs increase in the past year, which is mind-boggling to think about.
Matt Katz: Wow, wow. The reason why there's such a dent in poverty that this bill is expected, is it because of the child tax credit? Is that the major reason for that?
Heather Long: It's really a combination. It's a very comprehensive package. So many people email me and they say, "How can you say $1400, the check is going to lift somebody out of poverty?" I say you're right, it's not, but it's not just the $1400 check. On top of that is this expanded child tax credit that will give $3,000 this year to people for every child of the age 6 to 17, and it'll give $3,600 for every child under six. Also, now the expanded child care credit, so many people, obviously, who are trying to get back to work or search for jobs, they need to put their child in some sort of childcare, particularly young kids, and now that is going up to $4,000 that you can get back from the government for that.
Matt Katz: Wow. Heather, I want to just get back to one thing you mentioned earlier about the partisan split on this bill, not a single republican in the Senate voted in favor of it. Why did Senate Republicans not get behind the pandemic aid package even when they supported the last few rounds of federal relief?
Heather Long: Some of it is politics, but the arguments they make publicly are that it's too big. The final price tag is $1.9 trillion. They also argue that a lot of this aid is not directly tied to COVID, so they would have supported things like more unemployment insurance and more money for vaccines, but there was a lot of pushback about all the money going to state and local. I had to say it, but there was a lot of pushback about the anti-poverty program now that Republicans didn't think that that's a valid thing to do, but they were questioning why it's an emergency relief bill.
Democrats obviously said, "Look, you tried to play the same game in 2009 coming out of the Great Recession, we made the bill smaller." As Schumer said yesterday, "We cut back on the stimulus, and it resulted in five more years of recession." Democrats were not buying any of this "Let's cut the bill down" argument.
Matt Katz: They did cut out of the bill a $15 federal minimum wage mandate, and that's something that 59% of Americans support. Is this something, the minimum wage, that could come back later on in the Biden administration? Are Democrats going to keep pushing this?
Heather Long: They're certainly indicating they're going to try. I think the hardest debate for the White House is there's fairly widespread support to raise the federal minimum wage from $7.25 an hour to something like $11 or $12 an hour, they could probably get bipartisan support and even business support for that. The question is, do they try to go to $15? Can they actually do that? That's where you see a lot of pushback as the $15 number is pretty high in certain parts of the country in West Virginia, and places like Mississippi. That's where the pushback comes. I think it's going to be a really hard choice for Biden.
Matt Katz: The expanded child tax credit is only expected to last the year and families can use it to pay rent, buy groceries, pay for babysitters, but what could taking away this benefit after just one year mean for those families? Are members of the Democratic Party hoping that the expanded child tax credit will last beyond this year? Is that something that's possible?
Heather Long: You've hit on one of the biggest problems, if you will, with this bill, and that is, yes, it's arguably the biggest anti-poverty action from the government in decades, but most of the aid only lasts for 2021, for one year. Sitting here a year from now, in 2022, a lot of families are suddenly going to feel like they are taking a hit on their income, that suddenly their income is $3,000 or $4,000 or $5,000 less. There is certainly a lot of hope among Democratic leaders in the White House that a number of these programs can be expanded and made permanent, particularly that child tax credit, and the expanded earned income tax credit, and some of the health care subsidies in this bill, but that's not guaranteed.
Matt Katz: Before I let you go, Heather, we know that Black and Hispanic families have borne the brunt of the Coronavirus and then the resulting economic downturn. What is this pandemic aid mean for Black and Hispanic families specifically? Are you able to drill down on that?
Heather Long: Obviously, Black and Hispanic families have seen some of the slowest rebounded jobs, particularly Black women, even sitting here in March of 2021, when some of the economy has recovered. Because of the focus on the bottom 40% of Americans, the Black and Hispanic families in some ways would get a bigger boost from this bill. When we talk about 13 million Americans being lifted above the poverty line doesn't mean that everything will be fine, but they would be above the poverty line. It would really, really boost a lot of Black and Hispanic families above that poverty line.
Matt Katz: Heather Long is an economics correspondent for The Washington Post. Thanks, Heather.
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