Select Subcommittee Analysis Shows American Rescue Plan Helped Alleviate Poverty and Provide Equitable Relief to the American People
Washington, D.C. (September 22, 2021) – Today, the Select Subcommittee on the Coronavirus Crisis released a staff analysis outlining evidence that the American Rescue Plan’s (ARP) relief provisions have alleviated economic hardship, reduced poverty, and supported economic recovery in the wake of the pandemic. The report comes ahead of the Select Subcommittee’s September 22 hearing examining the effectiveness, efficiency, and equity of multiple pandemic relief programs.
Today’s new staff analysis found:
“American Rescue Plan’s (ARP) Direct Relief Payments contributed to a 17% decline in food insufficiency and a 19% drop in housing instability in the weeks following the ARP’s passage, and that these declines in hardship have been maintained many months after the relief payments were distributed as the recovery has progressed and other relief measures have been delivered.”
Earlier this year, Congress and the Biden Administration moved to deliver bold relief and recovery measures through the American Rescue Plan Act, including several measures intended to provide direct relief to Americans affected by the coronavirus pandemic and its economic fallout. Those measures included direct relief payments, an expanded Child Tax Credit, extended unemployment benefits, emergency rental assistance, increased nutrition assistance, and more generous subsidies to buy health insurance.
Select Subcommittee staff analyzed Census Bureau Pulse Household Survey data across a number of indicators of hardship from the time period immediately preceding the passage of the ARP, the period following the delivery of the ARP’s first benefits, and the most recent period for which there is available data (extending into late August 2021). This analysis shows that the ARP contributed to significant, immediate progress in reducing hardship as direct relief payments were made in March and April 2021. Even though these were one-time payments, much of that progress has been maintained months after their distribution and as the economic recovery has progressed.
More specifically, Select Subcommittee analysis of current evidence shows:
- In the weeks following the ARP’s passage, as relief payments were disbursed, the number of Americans reporting that their households lacked enough food to eat dropped by 4.2 million.
- The number of Americans owing back rent declined by more than 2 million in the weeks following distribution of the ARP’s relief payments.
- Black and Hispanic Americans saw sharp declines in financial hardship following ARP direct relief payments as the share of Black adults reporting significant difficulty paying basic expenses declined by nearly one third between March and late April 2021, and the share of Hispanic adults reporting such difficulty declining by nearly 40%.
- This progress has been largely maintained months after direct relief payments were disbursed, as the economy has recovered and other ARP relief measures—including expanded Child Tax Credit advance payments—have rolled out.
The Select Subcommittee’s analysis comports with other emerging evidence and analysis, including:
- The Urban Institute estimates that the ARP will cut annual poverty by 45% in 2021.
- The Center on Budget and Policy Priorities’ analysis of Census data showing sharp declines in hunger following Child Tax Credit advance payments.
- The University of Michigan’s report showing a decline in numerous hardship measures following passage of the ARP.
- Columbia University’s estimate that the first expanded Child Tax Credit advance payment lifted 6 million children from poverty.
As the nation continues to grapple with the pandemic, today’s report re-emphasizes economic progress made from the ARP and the need for additional legislation.
The Select Subcommittee reviewed data from the U.S. Census Bureau and the Urban Institute in compiling this report. Click here to read the full report.
Click here to watch the Select Subcommittee’s hearing, “Recognizing and Building on the Success of Pandemic Relief Programs.”