For a few fleeting months in 2021, it looked like President Joe Biden was making great strides in his promise to even the playing field for more Americans.
Even before his inauguration, he laid out a $1.9 trillion vision that called for bigger stimulus checks, more aid for the unemployed, the hungry and small businesses. As part of his American Rescue Plan proposal, Biden wanted to increase the child tax credit and make it available to more lower-income families, as well as help make child care more affordable. And he called for greatly expanding subsidies for Affordable Care Act plans and reinstating pandemic paid sick and family leave benefits.
With the Democrats in control of both chambers and the White House, Biden felt he could push for big steps he said were needed to address immediate needs. But it also would put in place – if even temporarily – many unprecedented social supports that party leaders had been trying to institute for years and might, they hoped, be hard to unravel.
In mid-March of that year, Biden signed the $1.9 trillion American Rescue Plan Act that mirrored much of what he had proposed with a few notable changes, including leaving out the paid sick and family leave provision and an increase in the federal minimum wage to $15 an hour.
“This plan is historic,” he said that month. “Taken altogether, this plan is going to make it possible to cut child poverty in half. Let me say that again – it’s significant, historic. It will cut child poverty in half.”
And it did – for a year.
On Tuesday, the Census Bureau reported that the child poverty rate skyrocketed from a record low 5.2% in 2021, when families were receiving the enhanced child tax credit and third round of stimulus checks, to 12.4% last year. What’s more, the share of children in poverty is roughly back to where it was prior to the pandemic in 2019, based on a broader alternative measure developed by the Census Bureau. It was the largest jump in child poverty since the Supplemental Poverty Measure began in 2009.
Overall, the supplemental poverty rate was 12.4% last year, up from 7.8% last year and higher than it was prior to the pandemic. It’s the first increase in the rate since 2010.
Temporary measures and internal resistance
Although the federal government spent a record amount of money in 2020 and 2021 to help the nation contend with the Covid-19 pandemic, there were limits. The hefty price tag of the Democrats’ ambitions forced them to make many of their measures temporary – notably the enhancement to the child tax credit, which boosted payments to as much as $3,600 per kid and made more low-income parents eligible.
The cost and concerns about swiftly rising inflation ultimately cratered the party’s attempt in the fall of 2021 to push through Congress a sweeping $3.5 trillion package that would have massively broadened the nation’s safety net as envisioned in Biden’s jobs and families proposals. It would have established a universal Pre-K program, further boost support for child care, make community college tuition-free for two years, create the first federal paid and medical leave benefit and extend the expansion of the child tax credit and other credits.
The Democrats wanted to pay for it by hiking taxes on the companies and well-off Americans, but the plans were scuttled by West Virginia Sen. Joe Manchin, a key moderate who worried about the legislation’s impact on inflation, and Arizona Sen. Kyrsten Sinema, who later left the party to become an independent.
A whittled down version of the proposal passed in August 2022, which extended a key Affordable Care Act subsidy enhancement through 2025, provided for a record investment in the climate and made major changes to Medicare, including allowing it to negotiate the prices of certain drugs for the first time.
More supports that helped Americans get by during the pandemic are expiring this year.
Already more than 6.4 million people, including at least 1.3 million children, have lost their Medicaid coverage since April, when states were once again allowed to start trimming their rolls of residents they deem ineligible, according to KFF. At least 15 million enrollees are expected have their coverage terminated by the end of the process next spring – undermining Biden’s pronouncements that more Americans have gained health insurance under his watch.
Also, a pandemic boost to food stamps ended nationwide this spring, and work requirements for certain recipients will kick in this fall. The expiration of the emergency allotments, along with the hike in grocery prices, has sent more Americans to food banks in an effort to feed themselves and their families.
And $24 billion in child care stabilization grants expires on September 30. More than 70,000 programs could close and about 3.2 million kids could lose their spots, according to The Century Foundation.
What’s more, in October, as the pandemic-related pause on federal student loan payments expires, borrowers will be required to pay their monthly bills for the first time in more than three years. Biden extended the payment pause six times since coming into office, but Congress has prohibited him from pushing back the date another time.
Though Biden’s administration has canceled more student loan debt than any other, the president’s signature effort to forgive up to $20,000 for millions of low- and middle-income borrowers got blocked by the Supreme Court this summer.
The steep rise in poverty – coupled with a drop in median household income – will make the president’s 2024 campaign message that his policies are helping Americans a tougher sell.
Already many people are not buying his “Bidenomics” pitch. They have a dour view of the economy in part because of the toll high inflation has taken on people’s finances, though the pace of price increases has slowed.
Some 51% of the public say they think the economy is still in a downturn and getting worse, according to a CNN poll released last month.
What’s more, only 24% of US adults said Biden’s policies have improved economic conditions, according to another CNN poll released last week, while 58% said his policies have worsened economic conditions.
Biden and some congressional Democrats are still trying to build support for restoring the enhanced child tax credit, a task made much tougher by Republican control of the House.
The president responded to Tuesday’s grim poverty report by blaming the GOP.
“The rise reported today in child poverty is no accident – it is the result of a deliberate policy choice congressional Republicans made to block help for families with children while advancing massive tax cuts for the wealthiest and largest corporations,” he said.