The Department of Health and Human Services of the United States has issued a report examining the impact of stimulus funds on poverty in 2021.
According to the figures, millions were kept out of poverty. This should give lawmakers a strong incentive to continue providing stimulus assistance.
Americans got significant financial help from the federal government in 2021. This includes funds transferred directly to their bank accounts. Congress granted economic aid in response to the continuing financial burden of COVID-19.
The US Department of Health and Human Services released a study of the impact of these payments on the number of low-income families in February 2022. The statistics revealed that the relief payments lifted millions of households out of poverty, particularly children.
Only two stimulus measures were sufficient to lift 10.8 million people out of poverty, and these two measures are easily replicable by politicians seeking to alleviate the economic problems that many continue to confront.
These two sorts of stimulus alleviation lifted an astonishing number of individuals out of poverty.
According to the February HHS report, economic impact payments made under the American Rescue Plan Act kept an estimated 7.9 million individuals out of poverty.
Additionally, the advanced Child Tax Credit lifted 2.9 million individuals from poverty. 1.8 million of those 2.9 million persons were youngsters.
This does not include the effects of other stimulus measures, such as extended unemployment benefits, which also contributed to millions of people’s salaries. Economic impact payments and advance Child Tax Credits accomplished precisely two objectives:
The EIP payments offered qualified people and dependents $1,400 stimulus cheques.
The advance Child Tax Credit boosted the previous Child Tax Credit from $3,600 to $3,600 for children under six and $3,000 to $3,000 for older children. This increased from the prior $2,000 cap under the previous guidelines.
Additionally, the enlarged credit made the full amount recoverable, when previously, just $1,400 was. Rather than just decreasing a tax bill to zero, a refundable credit may return more money than was paid in taxes.
From July through December, advance Child Tax Credits were also paid at a rate of $300 or $250 per month, whereas the existing Child Tax Credit was only accessible when submitting tax returns.
Giving this money to people throughout the year was sufficient to impact millions of taxpayers significantly. And there is a compelling case to be made that similar assistance is still necessary for 2022 – all the more so given that inflation is surging as a result of ongoing supply chain issues caused by the pandemic’s lingering effects.
Legislators have discussed extending the enhanced Child Tax Credit but have been unsuccessful so far.
There has been no discussion of another stimulus check. Still, with the price of gas and other products expected to continue rising, lawmakers may decide in the future that additional relief is necessary – especially given that HHS data indicates the payments made last year had a positive effect on poverty reduction.