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Biden’s Rescue Plan Will Cut Child Poverty in Half!

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Joe Biden just signed the most sweeping economic relief package since the New Deal. He has addressed poverty and inequality directly and fearlessly. Trump could boast of a massive tax cut for the rich. Biden can boast of putting money in the pockets of most Americans at a time of dire need. The number of children in poverty, by most estimates, will be cut in half.

A significant and permanent decline in the child poverty rate—currently higher in the U.S. than in other industrialized nations—will improve the lives of not only children, but families and communities. Children will have better nutrition, better child care, better access to medical care, and more stable lives, as the economic prospects of their families improve.

The plan establishes the benefit for a single year. But if it becomes permanent, as Democrats intend, it will greatly enlarge the safety net for the poor and the middle class at a time when the volatile modern economy often leaves families moving between those groups. More than 93 percent of children — 69 million — would receive benefits under the plan, at a one-year cost of more than $100 billion.

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The bill, which is likely to pass the House and be signed by Mr. Biden this week, raises the maximum benefit most families will receive by up to 80 percent per child and extends it to millions of families whose earnings are too low to fully qualify under existing law. Currently, a quarter of children get a partial benefit, and the poorest 10 percent get nothing.

Robert Kuttner of The American Prospect calls this “a watershed moment” that could demonstrate to working people that government is on their side. He writes:

With the passage of the American Rescue Plan, people who voted for Donald Trump grasped that the government, under a Democratic president, is sending each of their kids at least $3,000 a year, paying for their health coverage if they lose their jobs, topping up their unemployment compensation, keeping their local governments from cutting services, and a great deal more.

Government, in friendly hands, just might be on the side of the people—in a way that is simple, direct, and not filtered through private profiteers. Imagine that. Reprogram some tax breaks for the very rich that do nothing for anyone else, and government might deliver even more.

All of this public outlay will boost the economy so much that conservatives, who once emphasized the need for fiscal discipline and business tax breaks, are now warning that direct government help to regular people might cause the economy to grow too fast. What a nice problem to have.

Activist government has been demonized for more than a generation. A great many working-class people, who saw government under both parties getting into bed with elites rather than providing practical help, joined in the demonizing. Now, they just may give government and the Democrats a second look.

The New York Times said that the rescue plan’s direct income support for children amounts to “a policy revolution.”

Obscured by other parts of President Biden’s $1.9 trillion stimuluspackage, which won Senate approval on Saturday, the child benefit has the makings of a policy revolution. Though framed in technocratic terms as an expansion of an existing tax credit, it is essentially a guaranteed income for families with children, akin to children’s allowances that are common in other rich countries.

The plan establishes the benefit for a single year. But if it becomes permanent, as Democrats intend, it will greatly enlarge the safety net for the poor and the middle class at a time when the volatile modern economy often leaves families moving between those groups. More than 93 percent of children — 69 million — would receive benefits under the plan, at a one-year cost of more than $100 billion.

The bill…raises the maximum benefit most families will receive by up to 80 percent per child and extends it to millions of families whose earnings are too low to fully qualify under existing law. Currently, a quarter of children get a partial benefit, and the poorest 10 percent get nothing.

Joe Biden has staked his presidency on policies that echo FDR. He is the right leader for the moment. I have and will criticize his education policies. Mandating testing in the middle of a pandemic is thoughtless and cruel. But in confronting a once in a century pandemic and economic peril, his leadership has been peerless. And as Robert Kuttner wrote, Biden may even persuade working people to vote in their own interest and not to be swayed by the endless culture wars (e.g., trans bathrooms, cancel culture, Colin K’s knee) that Republicans use to mask their lack of any economic policy that benefits the vast majority of Americans.

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