2021 Poverty Projections: Assessing Four American Rescue Plan Policies

2021 Poverty Projections: Assessing Four American Rescue Plan Policies

Four key elements of the American Rescue Plan Act enacted in March could reduce the number of people living below the poverty line from more than forty-four million to twenty-eight million, an issue brief from the Urban Institute finds. According to 2021 Poverty Projections: Assessing Four American Rescue Plan Policies (15 pages, PDF), the collective impact of the extension of pandemic-related unemployment insurance benefits, the extension of Supplemental Nutrition Assistance Program benefits, the $1,400 stimulus payments, and the advance portion of the increased child tax credit could lower the projected poverty rate for 2021 by more than a third, from a projected 13.7 percent without the four measures to 8.7 percent, with the child poverty rate dropping to 6.5 percent. The brief also suggests that the poverty rate among Latinx individuals could fall from a projected 21.9 percent to 13.3 percent, that among African Americans it could drop from 18.1 percent to 10.5 percent, and that among white Americans it could decline from 9.6 percent to 6.4 percent. The analysis also found that the four measures could cut the share of those living in deep poverty — below 50 percent of the poverty line — from 4.4 percent to 2.9 percent and the share of those with low incomes — below 200 percent of the poverty line — from 45 percent to 38.1 percent.

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