Biden Administration Plan Will Likely Cut Child Poverty in Half in 2021

Poverty & Family Economics

President Biden’s American Rescue Plan pledges emergency relief for those affected by the public health and economic crises caused by COVID-19. It is also likely to quickly — if temporarily — cut child poverty in half.

According to analysis from Columbia’s Center on Poverty and Social Policy, Biden’s plan is likely to cut child poverty by at least in half in 2021 (51%, or 5 million children). This analysis measures child poverty using the Supplemental Poverty Measure and incorporates the effect of the December 2020 COVID relief package, as well as assumes a 6% average unemployment rate for 2021. 

The Center’s experts examined the following specific policies contained in the American Rescue Plan:

  • A fully refundable Child Tax Credit valued at $3,000 (ages 6-17) and $3,600 (under 6);
  • Extension of Supplemental Nutrition Assistance Program (SNAP) benefit increases through the end of 2021;
  • A one-time direct payment of $1,400 per eligible adult and child recipient;
  • Extension of current unemployment insurance expansions through September 30, 2021 (with a $400 per week national supplement);
  • An expanded Earned Income Tax Credit for workers without children.

Note that the plan includes other forms of relief, such as emergency Temporary Assistance for Needy Family (TANF) funds, rental assistance, a minimum wage increase, and more that the Center did not take into account for this analysis, so the impact on child poverty is likely to be even greater than the projected 51% reduction in 2021.

We recently urged the incoming Biden-Harris Administration and the 117th Congress to prioritize child poverty reduction in any upcoming COVID-19 relief efforts and so we are encouraged to see this fairly robust relief package that would provide immediate aid to support the healthy development of children impacted most significantly by COVID-19. If implemented, this package provides a good start to making more significant and sustained progress to reducing our high rate of child poverty in the United States

First Focus Campaign for Children has long advocated the establishment of a national target to cut child poverty in half within a decade as well as a permanent child allowance, and will continue to work with Congress to a) codify a child poverty target through the Child Poverty Reduction Act and b) pass the American Family Act so we can ensure progress on reducing child poverty beyond 2021. It is our hope that we will gain bipartisan support for this relief package and additional efforts to reduce child poverty through critically important investments in all our nation’s children.