[Senate Hearing 117-216]
[From the U.S. Government Publishing Office]
S. Hrg. 117-216
AMERICAN RESCUE PLAN: SHOTS IN ARMS AND MONEY IN POCKETS
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HEARING
before the
COMMITTEE ON
BANKING,HOUSING,AND URBAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
ON
EXAMINING WHAT THE AMERICAN RESCUE PLAN HAS MEANT FOR PEOPLE ACROSS THE
COUNTRY
__________
MARCH 25, 2021
__________
Printed for the use of the Committee on Banking, Housing, and Urban
Affairs
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available at: https: //www.govinfo.gov /
______
U.S. GOVERNMENT PUBLISHING OFFICE
47-084PDF WASHINGTON : 2022
COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
SHERROD BROWN, Ohio, Chairman
JACK REED, Rhode Island PATRICK J. TOOMEY, Pennsylvania
ROBERT MENENDEZ, New Jersey RICHARD C. SHELBY, Alabama
JON TESTER, Montana MIKE CRAPO, Idaho
MARK R. WARNER, Virginia TIM SCOTT, South Carolina
ELIZABETH WARREN, Massachusetts MIKE ROUNDS, South Dakota
CHRIS VAN HOLLEN, Maryland THOM TILLIS, North Carolina
CATHERINE CORTEZ MASTO, Nevada JOHN KENNEDY, Louisiana
TINA SMITH, Minnesota BILL HAGERTY, Tennessee
KYRSTEN SINEMA, Arizona CYNTHIA LUMMIS, Wyoming
JON OSSOFF, Georgia JERRY MORAN, Kansas
RAPHAEL WARNOCK, Georgia KEVIN CRAMER, North Dakota
STEVE DAINES, Montana
Laura Swanson, Staff Director
Brad Grantz, Republican Staff Director
Jeremy Hekhuis, Deputy Staff Director
Elisha Tuku, Chief Counsel
Dan Sullivan, Republican Chief Counsel
Elie Greenbaum, Republican Counsel
Cameron Ricker, Chief Clerk
Shelvin Simmons, IT Director
Charles J. Moffat, Hearing Clerk
(ii)
C O N T E N T S
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THURSDAY, MARCH 25, 2021
Page
Opening statement of Chairman Brown.............................. 1
Prepared statement....................................... 25
Opening statements, comments, or prepared statements of:
Senator Toomey............................................... 9
Prepared statement....................................... 26
WITNESSES
Sharon Parrott, President, Center for Budget and Policy
Priorities..................................................... 2
Prepared statement........................................... 27
Amy K. Matsui, Director of Income Security and Senior Counsel,
National Women's Law Center.................................... 3
Prepared statement........................................... 39
Rory Cooper, Public School Parent, Fairfax County, Virginia...... 4
Prepared statement........................................... 59
Angela Rachidi, Rowe Scholar, American Enterprise Institute...... 6
Prepared statement........................................... 60
(iii)
AMERICAN RESCUE PLAN: SHOTS IN ARMS AND MONEY IN POCKETS
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THURSDAY, MARCH 25, 2021
U.S. Senate,
Committee on Banking, Housing, and Urban Affairs,
Washington, DC.
The Committee met at 9:57 p.m., via Webex, Hon. Sherrod
Brown, Chairman of the Committee, presiding.
OPENING STATEMENT OF CHAIRMAN SHERROD BROWN
Chairman Brown. The Senate Committee on Banking, Housing,
and Urban Affairs will come to order.
Thank you all for joining us. We are starting a couple of
minutes early.
Today's witnesses will talk about what the American Rescue
Plan has meant for people across the country, shots in arms,
money in families' pockets, children in schools, workers in
jobs. We will explore how it helps black and brown communities
hit hardest by the pandemic and left behind by other policies
for decades.
Unfortunately, today we have four votes starting at 10:45
a.m. In order to get to member's questions, I will enter my
opening statement into the record, as will Ranking Member
Toomey.
We have also asked witnesses to shorten their testimony to
3 minutes. We will strictly enforce the 5-minute rule for
questions.
Because the hearing is virtual, a few quick reminders.
There will be a slight delay before you are displayed on the
screen when you start speaking. Please click the mute button
when you are not.
You should all have a box on your screens labeled clock.
For all Senators, a 5-minute clock still applies for your
questions. With 30 seconds remaining, you will hear a bell to
remind your time is almost expired. It will ring again when
your time has expired.
If there is a technology issue, we will move to the next
witness or Senator until it is resolved.
To simplify the speaking order process, Senator Toomey and
I have agreed to go by seniority for this hearing.
I will introduce today's witnesses. I apologize for the
shortened introductions.
Sharon Parrott is President of the Center for Budget and
Policy Priorities. Amy Matsui is Director of Income Security
and Senior Counsel at the National Women's Law Center. Roy
Cooper is the parent of three children and a former staffer for
Representative Eric Cantor and he lives in Fairfax County,
Virginia. Dr. Angela Rachidi is the Rowe Scholar at the
American Enterprise Institute.
Welcome, and thank you for your testimony today.
Ms. Parrott, please begin your testimony. Thank you so
much.
STATEMENT OF SHARON PARROTT, PRESIDENT, CENTER FOR BUDGET AND
POLICY PRIORITIES
Ms. Parrott. Chairman Brown, Ranking Member Toomey, Members
of the Committee, thank you for the opportunity to testify this
morning.
I am going to make four points and I will be happy to take
questions.
My first point is that, even with today's news that initial
jobless claims ticked down somewhat, millions of people are out
of work, hardship remains high, and the current crisis has
taken a disproportionate toll on people who worked in low-paid
jobs and low-income households with children.
Due to the Nation's long history of racism, that has
resulted in gaping inequities in housing, employment, and
education. These heavily impacted groups include
disproportionate numbers of Black and Indigenous people and
people of color.
There were 9.5 million fewer payroll jobs last month than
in February of 2020 and the largest losses are in industries
that pay low wages. Black and Latino workers are
disproportionately represented in low-paying industries, which
is a key reason their unemployment rate is so much higher than
white unemployment.
Tens of millions of households are struggling to pay their
bills. For example, between February 17th and March 1st of this
year, an estimated 13.5 million adults in rental housing,
nearly one in five adult renters, reported that they were not
caught up in rent. And about 22 million adults reported that
their household sometimes or often did not have enough to eat
in the last 7 days. Food and housing hardship was highest among
households of color and households with children.
My second point is that the rescue plan is providing much
needed help for tens of millions of people and it is also
providing important funds for States, territories, localities
and tribes. It includes housing assistance for millions of
people struggling to pay rent and avoid eviction, and for
communities to address homelessness.
It extends critical unemployment benefit expansions and
nutrition assistance. It temporarily expands the Child Tax
Credit and the Earned Income Tax Credit, driving an historic
reduction in poverty and providing much needed support for
workers.
It makes comprehensive health coverage more accessible and
affordable. It helps States, localities, territories and tribes
with COVID-19 costs and other expenses. It provides a historic
investment in K-12 education to help address the pandemic's
impact on schools and on student learning. And it provides
important funding for operating costs of transit agencies.
My third point is that we would not have needed so many
emergency stopgap measures if we had permanent policies that
provided supports for households that struggle to afford the
basics, that offered adequate jobless benefits, particularly to
workers in low-paid jobs, and that insured everyone had access
to health coverage.
Other wealthy nations have these kinds of policies in
place. The United States can do so, as well.
My fourth point is that the President and the Congress will
soon have an historic opportunity in recovery legislation to
make investments that help us build toward a more equitable
recovery.
What would that look like? A strong recovery requires the
pandemic is under control and strong growth. But to be an
equitable recovery, we also need policies in place that
dramatically reduce child poverty, that help people in low-pay
jobs make ends meet, and assist those with few job prospects
and expands access to health coverage.
I look forward to working with this Committee and the
Congress to drive toward that vision of a recovery.
Thank you.
Chairman Brown. Thank you, Ms. Parrott.
Ms. Matsui, welcome.
STATEMENT OF AMY MATSUI, DIRECTOR OF INCOME SECURITY AND SENIOR
COUNSEL, NATIONAL WOMEN'S LAW CENTER
Ms. Matsui. Chairman Brown, Ranking Member Toomey, and
members of the Committee, thank you for the opportunity to
testify. My testimony today will address the deep racial,
gender, and economic disparities revealed by the COVID-19
pandemic and the impact of the American Rescue Plan of 2021 on
women and families.
The COVID-19 crisis has laid bare long-standing racial and
gender inequities. COVID pulled back the curtain on weaknesses
in our economy, exposing women's overrepresentation in part-
time and low-paid jobs in the service sector. Women make up the
vast majority of workers risking their lives to provide health
care, child care, and other essential services for inadequate
pay.
The pandemic also revealed women's disproportionate
responsibility for caregiving, both paid and unpaid. Women's
undervalued labor held up our fragmented and dysfunctional
child care, home care and elder care systems and we discovered
that there is no backup when the backup fails.
The pandemic's disastrous health and economic consequences
have disparately fallen on women of color and women more
generally. Throughout the pandemic, the overall unemployment
rate has masked devastatingly high rates for Black women,
Latinas, women with disabilities, and younger women. In
January, more than 61 million women recorded that their
household had lost employment income between March 2020 and the
present, but more than 6 in 10 Latinas and over half of Black
non-Hispanic women were in such a household.
Millions are struggling to make basic needs like shelter
and food, with Black women and Latinas again disproportionately
represented among them.
The American Rescue Plan Act of 2021 is targeted to help
the women, communities of color, and families who are
experiencing the greatest economic distress and provides relief
at the scale of need.
I want to highlight several key aspects of the law, among
many, that will benefit women and families.
First, the rescue plan provides nearly $50 billion in
housing and utility assistance, which includes emergency rental
assistance, housing vouchers, homelessness assistance, nearly
$10 billion to create a homeowner assistance fund and other
housing relief, along with housing counseling and fair housing
activities.
The bill also provides transit relief funding, which is
critical for low-paid workers, among whom women are
overrepresented.
Second, the rescue plan provides $39 billion in direct
funding for child care to help stabilize the child care sector
and help women afford and access the child care they need to
work.
Third, the rescue plan made historic, though temporary,
expansions to the Child Tax Credit and Earned Income Tax Credit
for low-paid workers not claiming children. These expansions
will boost the incomes of millions of families and especially
benefit women of color and children of color.
These provisions, along with other income supports,
nutrition assistance, and health care will have a direct impact
on the lives of women and their families. They will allow their
families to meet their basic needs and boost the incomes of
millions above the poverty line. They will mitigate the harm
that poverty and economic insecurity inflict on children's
well-being and forestall long-term consequences to women's
health, employment, education, and lifetime financial security.
The American Rescue Plan Act addresses the near-term
consequences of the pandemic. Moving forward, we urge
policymakers to consider the rescue plan for an equitable
economic recovery that centers women, communities of color, and
families with low incomes.
We cannot accept the pre-COVID status quo as the benchmark
for recovery, however. Structural changes and significant
public investments in housing, the care economy, a more
progressive and equitable tax code, and increased wages are the
only way forward to sustainable and broadly shared prosperity.
Thank you for the opportunity to testify today and I look
forward to answering your questions.
Chairman Brown. Thank you, Ms. Matsui.
Mr. Cooper is recognized for 3 minutes. Thank you.
STATEMENT OF RORY COOPER, PUBLIC SCHOOL PARENT, FAIRFAX COUNTY,
VIRGINIA
Mr. Cooper. Thank you.
Chairman Brown, Ranking Member Toomey, and members of the
Committee, thank you for this opportunity to speak for what I
believe are millions of parents.
I have 3 kids currently in 5th grade, 2nd grade, and
kindergarten, who I love very much. My children, and millions
of other children, have not had access to the education they
deserve for over a year.
President Biden's goal of having a majority of schools open
to some degree in his first 100 days is incomprehensible. It
was achieved before he took office.
A majority of students are indeed attending school in
person 5 days a week. Two-thirds of public school districts are
currently open 5 days a week, many of them since the fall.
The districts that are failing our children are the large
metropolitan areas where school boards are heavily controlled
by powerful teacher's unions like New York,
Chicago, San Francisco, L.A., and Washington, D.C.
We know schools are safe because not one person is calling
on the open schools to close. Here in Fairfax County,
unreasonable union demands, coupled with a flat-footed
superintendent and school board have crippled what was once a
premier district. The goal posts keep moving as they run out
the clock on the school year and leave students behind.
We were told that teachers needed to be vaccinated first.
So Virginia put them at the front of the line with health care
workers and senior citizens. And then, when all willing
teachers in Fairfax were vaccinated, they still refused to
fully reopen.
Then we were told they needed more money. The school
districts that are currently closed are some of the best funded
in the Nation. Fairfax County is in the top 10. Schools that
are closed have saved millions of dollars while open schools
have lost money.
America rallied to give them more money anyway. In the
CARES Act, a year ago today, Congress appropriated $13 billion.
In December, an additional $54 billion. Despite most of that
money remaining unspent in 2021, this Congress pursued $126
billion more in the American Rescue Plan, nearly none of it to
be spent actually reopening schools.
The latest goal post moving has come around 6-foot
distancing. We knew this was overcautious in 2020 because a
majority of school districts were already ignoring it. But
districts like Fairfax used it as a crutch to only consider
opening 2 days a week. The CDC finally admitted what they
already knew and reduced it to 3 feet. Randi Weingarten, of the
American Federation of Teachers, said that still was not good
enough and they wanted even more money.
No science or vaccination or amount of money will ever be
good enough. The kids are suffering greatly. We have seen a
terrible spike in suicides, depression, anxiety, and a loss of
access to nutrition, socialization, and physical health.
Children with physical and learning disabilities, who require
additional support, have received a minimum of what the law
compels schools to offer.
So many students are falling behind in Fairfax County that
they actually eliminated failing grades altogether. These are
the results of the union efforts.
Families are fleeing public schools. Inequality is
skyrocketing. And our most vulnerable populations are getting
hit the hardest. The data is vast and clear. Schools are safe.
Public health, pediatric and psychological experts are nearly
unanimously agreed that school closures are the crisis in their
own right and need to end.
It is time for science and common sense to prevail. Let's
not wait one more day. The fall is just an excuse for districts
like Fairfax to keep falling behind. We hear that we need more
money and more time and schools have had plenty of both. If
public school systems like Fairfax can choose to not offer
adequate instruction, these billions of dollars should go to
students instead, so they can access better choices.
Thank you and I look forward to your questions.
Chairman Brown. Thank you, Mr. Cooper.
Ms. Rachidi.
STATEMENT OF ANGELA RACHIDI, ROWE SCHOLAR, AMERICAN ENTERPRISE
INSTITUTE
Ms. Rachidi. Chairman Brown, Ranking Member Toomey, and
members of the Committee, thank you for having me here today.
My name is Angela Rachidi and I am the Rowe Scholar in
poverty studies at the American Enterprise Institute where I
have spent the past several years research policies aimed at
reducing poverty and increasing employment.
I want to make three points in my testimony. First,
statistics on poverty and income show that poverty had already
fallen by 3 percentage points below prepandemic rates in the
months leading up to passage of President Biden's American
Rescue Plan.
This raises the question of why Congress passed such a
large rescue package in recent weeks when the data were already
moving in the right direction.
This is especially concerning because, to my second point,
the safety net expansions included in the American Rescue Plan
undermine the successful antipoverty policies of the past
quarter century by discouraging work and increasing the
likelihood of single parenthood.
The successful policy reforms of the 1990s get too little
credit for substantially reducing child poverty in this
country. The child poverty rate, when properly measured,
declined by half since 1993 because of welfare reform and
expansions to the Earned Income Tax Credit, both policies that
strongly encourage employment.
These declines in poverty were especially large for Black
and Hispanic children, narrowing the racial gap in child
poverty rate substantially over the past 25 years. In contrast,
the American Rescue Plan discourages work and jeopardizes these
policy successes.
The American Rescue Plan expanded the Child Tax Credit to
nonworking families, reversing decades of successful welfare
policies that condition assistance on employment. Without work,
families will spend more time in poverty and face fewer options
to becoming self-reliant and moving up the income ladder.
Additionally, expanding the Child Tax Credit to nonworking
families is on top of other program expansions that also
discourage work, such as SNAP and generous unemployment
insurance.
Combining the provisions in the American Rescue Plan
together means that many low-income families will receive more
money not working than working. This will lead to skill
atrophy, meaning a loss of workplace skills when they are out
of the labor market and will make reentering the labor force
even harder for them. This formula will slow the economic
recovery and harm families in the long run.
When you consider the continued school closures to in-
person learning, I am also concerned about the burden being
placed on mothers and how all of these policies together make
it more likely that they will leave the labor force, which will
negatively affect their financial future and the broader
economic recovery.
I can personally attest to the substantial difficulties for
families and children when schools failed to open for in-person
learning. In fact, we moved our family out of the United States
so that my four children could attend school in person after
months of struggling with virtual learning. It is a tragedy
that after a full year, so many children in America still do
not have access to full-time in-person----
Chairman Brown. She moved her family out of the United
States for school.
Ms. Rachidi. Temporarily.
Finally, proponents of the American Rescue Plan have
overstated the positive effects of this legislation while
understating the true costs. Efforts in the coming months will
attempt to show the positive aspects of this legislation but
these will be short-term and artificial gains. They will mask
the long-term negative consequences of this legislation that
will be difficult to reverse, such as reduced labor force
participation, more children born to single parents and
entrenched poverty for more Americans.
Thank you for the opportunity to testify and I look forward
to your questions.
Chairman Brown. Thank you, Ms. Rachidi.
Ms. Matsui, nearly 3 million American women have been
forced out of paid work during the pandemic. The American
Rescue Plan gives them more support with the expansion of the
Earned Income Tax Credit and the Child Tax Credit. Why do you
think expanded EITC and CTC are so critical, particularly to
women and to families?
Ms. Matsui. Thank you for your question, Senator. And thank
you for your leadership in improving these critical tax credits
for families.
As you know, women of color have suffered devastating job
losses and they are overrepresented in essential front-line
jobs where they face racial and gender wage gaps, as well. And
they are facing higher rates of household income loss, housing
insecurity, and food insecurity.
We are already seeing that Black workers are experiencing a
lag in recovering jobs, and this is consistent with the
experience of women of color in previous recessions.
So refundable tax credits like the EITC and Child Tax
Credit especially benefit women of color and the income boost
from these credits will boost the income of families above the
poverty line and help them pay the bills.
In addition, the financial support from these credits will
be important for women of color as the economy recovers
throughout 2021 and in 2022, in the earlier part of the year
when they file their tax returns.
Thank you.
Chairman Brown. Ms. Parrott, I am struck by a line in your
testimony that ``The Nation would need fewer stopgap measures
during hard times if we had stronger permanent policies in
place to help households and workers when they need it.''
What are your recommendations for supporting or
strengthening support for families and workers beyond the
pandemic?
Ms. Parrott. Yes, thanks for that.
You know, we under invest in our kids. We under invest in
low-paid workers and helping people when they are out of work
and we continue to have tens of millions of people without
health coverage. So let me just take these quickly each.
In terms of children, we tolerate very high levels of
poverty, particularly among Black and Latino children. And we
tolerate far higher levels of poverty than in other wealthy
nations. But the difference there is not the difference in
poverty because of differences in earnings. Actually, when you
look at child poverty before we consider Government assistance,
we actually look a lot like other countries. But other
countries do a lot more to help struggling families and lift
kids out of poverty.
But the good news is we know what works. We know that the
expanded Child Tax Credit in the rescue plan made permanent
would reduce child poverty by 40 percent. That is 4 million
children. We know that housing vouchers stabilize families'
housing and reduce eviction. We know that nutrition assistance
works and improves long-term outcomes for children.
And I want to underscore the long-term outcomes because we
know that poverty has long-term negative effects on children.
In terms of workers, parents who work in low-paid jobs
often cannot afford child care, they often do not have paid
family medical leave or even paid sick days. And people, when
they lose their jobs, just do not have access to unemployment
benefits absent the kind of stopgap measures we put in place.
And we also do not do enough to help people who have dim
labor market prospects when we have things that work.
And finally, we need to build on the success of the
Affordable Care Act. We can get to universal coverage if we
have the will to do it.
Chairman Brown. Thank you, Ms. Parrott.
Ms. Matsui, we know how hard this pandemic has hit so many
renters and millions were already struggling with high housing
costs prior to the pandemic. The American Rescue Plan gives
them emergency rental assistance.
Now, what are your recommendations--and say it in about 60
seconds if you can--what are your recommendations for solving
the affordable housing crisis we already had?
Ms. Matsui. Thank you for your question, Senator.
As you know, many families before the pandemic were
struggling to meet affordable housing costs. The amount that
families need to earn in order to rent an affordable two-
bedroom home is out of reach for millions of women and
families. Someone working at minimum wage would have to work 13
hours a day, 7 days a week in order to afford a two-bedroom
household in most places.
And so dramatically increasing the amount of housing
assistance so that all of the families who need it can access
it will both ensure housing stability and prevent kind of the
cascade of negative effects that housing instability, eviction,
and home loss can place on women and families.
Chairman Brown. Thank you very much, Ms. Matsui.
Senator Toomey is recognized.
OPENING STATEMENT OF SENATOR PATRICK J. TOOMEY
Senator Toomey. Thanks, Mr. Chairman.
The $1.9 trillion bill that our Democratic colleagues
passed seems designed to make far more people more dependent on
Government and less self-reliant than they would otherwise be.
For example, the bill eliminates the requirement to earn
income, which is to say to work, in order to receive the
increased and fully refundable Child Tax Credit.
The bill also famously provides extra unemployment benefits
such that at some periods of time a majority of people not
working are getting paid more by the Government to not work
than they would get paid if they went to work.
So I want to explore how these huge new incentives not to
work are harmful to especially low- and middle-income families.
Dr. Rachidi, as I know you are aware, I think in the 1990s
we made some reforms on a bipartisan basis to a number of
welfare programs that included a work requirement or at least a
requirement that a recipient attempt to find work as a
condition of getting the benefits.
So let me ask you this, did those work requirement rules
reduce poverty or did they increase poverty in the United
States?
Ms. Rachidi. Thank you for the question.
So the work requirements that you are talking about were
part of welfare reform in the late 1990s. And yes, the evidence
shows that poverty reduced, among children in particular,
dramatically after those reforms were put in place. And it was
due to those reforms, as well as to expanded Earned Income Tax
Credit, which also rewarded work. So when you combined the work
requirements and conditioning assistance on employment, along
with a wage supplement through the Earned Income Tax Credit,
poverty--as I mentioned in my testimony--for children declined
by half over the next 25 years.
Senator Toomey. So the very policies that dramatically
reduced poverty, especially among children, those policies were
watered down in this last bill.
Let me ask you about this, does it stand to reason in your
mind that if the Government sets up an unemployment insurance
benefit program that will pay someone more to stay at home than
they can earn if they go to work, does it stand to reason that
some people are going to make the decision to stay home?
Ms. Rachidi. Yes, definitely. And I think that that might
be appropriate at certain times, certainly in the immediate
aftermath of the pandemic that was possible. But it will
definitely slow the economic recovery. And I think at the point
we are at now, that should be a big concern.
Senator Toomey. Right. And how about the effect it is going
to have on those very workers? I mean, if the Government is
telling someone we will pay you more not to work than to work,
it is hard to fault the person for saying OK, maximizing income
for my family is pretty important. But what is the long-term
effect of people make a rational decision and stay out of the
workforce for an extended period of time because of these
Government incentives?
Ms. Rachidi. Oh, there is a large literature in the
economics literature that shows the longer people are out of
the labor the much harder it is to reenter the labor market.
They lose skills. I mentioned skill atrophy. They lose not only
hard skills that they cannot keep up, but they also lose soft
skills.
So the literature is very clear that the longer people stay
out, it becomes much harder for them in the long run and hurts
them in the long run.
Senator Toomey. And then, Mr. Cooper, you know, the thing
that is so painful about this school closure situation is how
polarized it is. Wealthy families can afford to go to private
schools and private schools are open. They have been open.
But the public schools--and if you are a low- or middle-
income person you do not have the luxury of sending your kids
to a private school--they tend to be closed. Who do you think
is responsible for the fact that public schools are, by and
large, still not fully open?
Mr. Cooper. Thank you, Senator.
And also, thank you for raising this issue because so many
right now are ignoring it. And I know parents appreciate you
bringing it to this hearing.
You know, right behind me behind this wall, on the other
side, are a group of neighbor kids and a tutor that we all
collectively hired in order to help them handle the day-to-day
of online learning. We are fortunate to have the means to do
that. But even with that being said, it is still a terrible
environment for learning.
The inequality gap that is growing is not simply between
the haves and the have-nots. It is between the same communities
of people who choose the private option down the street because
it is the only one open.
But look at the standardized tests next year. What is going
to be the difference between the child in Florida, who has been
in school 5 days a week all year, and the child in Virginia,
who has had maybe 15 days of in-person instruction? What is the
equitable solution for those students?
We have a lot of work to do on this and money is not going
to solve the problem. It is just a matter of will and for
unions to, frankly, get out of the way.
Senator Toomey. Thank you.
Thank you, Mr. Chairman.
Chairman Brown. Thank you, Senator Toomey.
Senator Menendez is recognized for 5 minutes.
Senator Menendez. Thank you, Mr. Chairman.
I share Senator Toomey's concerns about children in school.
But I also recognize there is a big difference between a
private school that cherry picks its students and has a small,
limited universe with a lot of spacing and a very small student
ratio size to its teacher than a public school--such as in my
State of New Jersey--that often is significantly overcrowded,
has maybe 30 kids to a teacher, and where physical spacing and
other issues are a challenge.
So I do not think there is a one-size-fits-all suggestion
that the public schools, you know, can easily do that some of
the private schools are doing without very significant issues
of ventilation and other things.
I want to turn to one of the biggest lessons learned from
the Great Recession, which was the need for the Federal
Government to do more to proactively help workers and families
navigate an economic crisis. Recessions last longer, they are
far deeper, they hurt many people when Congress fails to craft
solutions that rise to the magnitude of the challenge. I think
we learned that lesson from the Great Recession.
I certainly was here and saw the legislative responses to
it. It fell, in my mind, far short and so therefore it was
longer and deeper in terms of its hurt.
The American Rescue Plan has some bold action in it,
including the question of State and local government
assistance.
Ms. Parrott, approximately 1 million jobs at the State and
local level have been eliminated or furloughed since the
pandemic began. How does this compare to the 2008 and 2009
recession? And what does that experience tell us would be the
impact, not just to these families but to the economy as a
whole if States and local governments were not able to rehire
these needed workers?
Ms. Parrott. Thank you for that.
It is much worse, actually. In the worst part of the Great
Recession, State and localities had cut 750,000 jobs. So this
is a significantly larger number of layoffs.
You know, those Great Recession era job cuts really did
slow our economic recovery. States and localities were still
laying people off when the rest of the economy was starting to
look forward and that acted as a drag on the rest of the
economy.
The rescue plan's resources for States, localities,
territories and tribes will help bring back teachers, other
school workers, firefighters, others that have been laid off,
will allow them resources to meet their COVID-19 costs. In
places with revenue loss, it will fill that in. And it will
allow those Governments to be able to help struggling families
and businesses, all toward getting us on track to a strong
recovery.
The other thing I will just say is that there are
localities and States with economies heavily dependent on
tourism and travel that are particularly hard hurt. Many tribal
governments fall into that category, have significant needs. So
these resources are really going to help fill in important gaps
and pave the way to a stronger recovery.
Senator Menendez. Ms. Matsui, our country navigates the
COVID crisis, a tragic epidemic of gun violence, but we are
also in the midst of a full-blown student debt crisis with 43
million owing over $1.5 trillion which I think is not only a
drag on the person fortunes of those individuals and their
futures but on the collective economy.
Have broad swaths of the 43 million who hold student loan
debt been able to successfully obtain forgiveness through IDR?
Ms. Matsui. Thank you for your question, Senator.
Student loan debt is a critical issue for women, especially
women of color, because they hold a disproportionate share of
student loan debt and because gender and racial wage gaps means
that it takes longer for women to repay those debts.
My understanding is that a very limited number of borrowers
have been able to have their loans canceled through income-
driven repayment.
Senator Menendez. Well, according to data obtained by
consumer groups, there is about 2 million student loan
borrowers who have been in repayment for more than 20 years.
Just 32, 32, of 2 million have ever qualified for loan
cancellation. So IDR is not working. The Public Service Loan
Forgiveness is not working.
I think the American Rescue Plan facilitated the
Administration's path toward broad-based student loan
forgiveness by including the provision that I authored that no
longer taxes an individual on any forgiveness, along with
Senator Warren.
So I hope that we understand that in the midst of a
pandemic and still employment and economic challenges that we
could unlock an enormous potential in this regard for women and
for all students in our society who are overburdened by debt.
Thank you, Mr. Chairman.
Chairman Brown. Thank you, Senator Menendez.
Is Senator Tillis here? Or not?
[No response.]
Chairman Brown. Or Senator Hagerty?
[No response.]
Chairman Brown. Senator Tester is recognized for 5 minutes.
Senator Tester. Thank you, Mr. Chairman.
Even before the pandemic, Montana had challenges around
housing. I think it is true across the country. Affordability
and availability of housing are big issues. Some areas of the
State dealt with an aging housing stock and how that was going
to be maintained and improved to livability. The pandemic has
made these challenges worse.
I am hearing from small business owners who are struggling
and that is causing them to fall behind on the mortgage. The
same is true for plenty of homeowners and renters. The problems
for renters cause problems for mom and pop landlords. It is a
domino.
And if homeowners and renters cannot access the programs
meant to provide them assistance, then they can be in a lot of
trouble when forbearance programs and eviction moratoriums
expire.
So my question for you, Ms. Parrott, is how impactful could
the housing programs included in the recent legislation be for
folks--and I want you to really kind of focus on rural areas
like Montana?
Ms. Parrott. Yes, thanks for that question.
So there is a number of housing provisions in the rescue
plan, as you well know. Two big ones are additional resources
for the Emergency Rental Assistance Program and housing
vouchers. There is also help for homelessness and provisions
for homeowners.
The emergency rental assistance actually is building on
what was done in the December package. So all told that,
together, is roughly $50 billion. So those dollars are really
starting to hit localities. Treasury has worked hard in a short
period of time to start to get those dollars out.
But the rubber is going to meet the road in implementation,
whether it is in rural communities or cities. We have been in
touch with many, many partners around the country and have been
heartened to hear that those programs are really starting to
open up this month. That provides an enormous amount of
assistance, particularly on the rental side, for people who are
behind in rent.
You know, getting out from that rental debt is going to
make a huge difference in them being able to move forward;
right? Hopefully, they are moving forward. Their incomes are
going to go up. They will be able to regain jobs. If they are
not saddled with that debt, it is really going to help them
move forward.
The housing vouchers are also critical. They are going to
help people with much more significant housing challenges,
people who either already experiencing homelessness or at great
risk of experiencing homelessness.
Senator Tester. You spoke about this, but what sort of
oversight do we need to be focused on to make sure the folks
that need this assistance actually have access to it?
Ms. Parrott. So that is a great question.
We have been in touch with the Administration quite a bit
around implementation. They are certainly quite focused on the
fact that these dollars need to get out, but that there also
needs to be oversight.
And so, I think Treasury is quite understanding the task
ahead of them. It is, frankly, a little tough because Treasury
does not usually run housing assistance programs but those
dollars were placed there in December. And so they are working
closely with HUD. I think that relationship is going to be
really important, making sure Treasury and HUD are working
close together and making sure we are getting good information
from States and localities that are implementing the program to
make sure that those dollars are going out.
It will take some time. There is just no doubt about that.
But hopefully, those programs are really going to get ramped up
this month and we will start to see people's debt load from
rent really decline.
Senator Tester. I think that is good counsel. Mr. Chairman,
and you may have already had conversations with Marcia Fudge,
but I think we should be encouraging them to really work hand-
in-glove, HUD and Treasury, to make sure that this money does
go out in the right way.
Thank you. I will yield back my time.
Thank you, Mr. Chairman.
Chairman Brown. Thank you, Senator Tester.
Senator Warren is recognized for 5 minutes.
Senator Warren. Thank you, Mr. Chairman and thank you for
holding this hearing.
The pandemic has been devastating to child care providers
and to families looking for affordable quality care. In
Massachusetts, more than 1,000 child care programs have closed
since the pandemic began. For families, not having child care
means an impossible balancing act that hits women the hardest.
More than 2 million women left the workforce in 2020. Women's
workforce participation is at its lowest level since 1988.
Starting last April, Senator Tina Smith and I started
ringing the alarm that the child care sector was on the brink
of collapse. We called for a $50 million child care bailout. We
have been pushing for it ever since. And we got it done in the
American Rescue Plan.
With the support of so many of our colleagues, Tina and I
secured more than $53 billion in child care relief money. That
is the largest Federal investment in child care since World War
II.
Ms. Matsui, what will this relief money mean for child care
providers and for working families?
Ms. Matsui. Senator, thank you for your question and thank
you for your leadership in making sure that families,
providers, and the workforce got the child care relief that
they needed during the pandemic. And as you very accurately
noted, the pandemic has wreaked havoc on an already fragmented
and inequitable system.
The $39 billion in direct funding for child care in the
rescue plan includes $24 billion in stabilization funds for
child care providers as well as $15 billion in the Childcare
and Development Block Grant or CCDBG. And this will make a
tremendous difference for child care providers and families
with providers having often to close, furlough workers, or
operating on the slimmest or margins and taking out personal
debt because of the increase in costs for COVID and decreased
slots, which means that they have lower revenues.
So the stabilization fund, fortunately, can be used to
support providers who have closed or who are operating with
higher COVID-related expenses during the pandemic. It will
cover a range of expenses from personnel, rent, personal
protective equipment, COVID-related supplies, reimbursement of
those costs.
In addition, a really important piece is mental health
supports, both for children and for early educators.
For parents, the CCDBG additional funds will provide
expanded assistance so that women can go back to work and
afford and access the child care that they need. And in
addition, very importantly, this includes child care for
essential workers.
So really, this is the help that the child care sector
needs to make it to the other side of the pandemic.
Senator Warren. Well, I am so glad that we have finally
been able to get the relief to our child care providers and to
the families who need it.
But you know, our goal cannot just be to stabilize an
already broken system. This year has shown us how essential
child care is and how desperately inadequate the system was
even before the pandemic.
So let me ask you another question here, Ms. Matsui. What
more does Congress need to do to actually fix the underlying
problems in the child care system?
Ms. Matsui. Thank you for that question, Senator.
We completely agree that returning to a broken status quo
is not enough. It is time to build a comprehensive child care
and early education system that works for our Nation's
children, families, educators, and the economy as a whole.
So this entails creating a guarantee of affordable, high
quality child care for every family who needs it, including by
investing in the education and compensation of a diverse
workforce and providing child care, after school, summer care
options for both young children and for older children.
In particular, this requires providing equitable access to
preschool in a model that is inclusive of centers, schools,
community-based options, Head Start and family child care
homes, and supports a just and strong birth to 5 system.
And as you note, many communities have what we call child
care deserts, which is where child care is not available at
all, much less the kind of choices that families need and
deserve. So we need to serve safe, energy efficient, and
developmentally appropriate care facilities in home-based
options in all neighborhoods and in all settings.
Senator Warren [presiding]. Well, I very much appreciate
that. In our next recovery bill, we need to make sure that our
child care system never comes close to collapse again.
I want to underscore what you said. That means guaranteeing
affordable child care to every single family that needs it. It
means making sure that child care workers are being paid a
living wage. And we need to make long-term investments in the
supply of child care, to make sure that we have high quality
child care slots available to every child who needs it.
So I am going to be putting forward specific proposals on
how to do that. We cannot afford to just nibble around the
edges of an inadequate system any longer. We need to make big
changes to fix this problem.
I look forward to working with my colleagues to get this
done.
Thank you very much. Thank you, Mr. Chairman.
I think the Chairman had to run to another hearing.
Is Senator Van Hollen here?
[No response.]
Senator Warren. Senator Van Hollen? Going once, going
twice? If not, Senator Tillis?
[No response.]
Senator Warren. Senator Sinema?
[No response.]
Senator Warren. Senator Hagerty?
[No response.]
Senator Warren. Senator Warnock?
[No response.]
Senator Warren. Do we have a Senator here who still wishes
to ask questions?
[No response.]
Senator Warren. All right.
I am not sure, we may have some more people coming. So if
our witnesses will just hold on for a few minutes, the problem
we have right now is we are in the middle of voting and people
are trying to get their votes in and make it back. So I do not
want to close the hearing down.
So if our witnesses are amenable, maybe we can stay here
for just a little bit.
But actually, while we have a chance to do this, one of the
things I hope you and I can talk about just a little bit more
here, since I have a little extra time as it turns out, Ms.
Matsui, can you talk just a little bit about child care wages
and why they are so low? And what that means for child car
workers?
Ms. Matsui. Thank you so much for the question, Senator
Warren.
One of the serious flaws and gaps in the child care system
is the undercompensation of the workforce. As you know, most
child care workers earn less than $12 an hour, which is
absolutely not commensurate with the highly skilled work that
they do caring for our youngest children.
I will also add that the workforce is disproportionately
composed of Black and Brown women and so we are relying on the
undervalued labor of women of color to provide this care.
One of the things that is critically important, as you
note, for revaluing, resetting our child care system is making
sure that child care workers are adequately compensated and
that they have opportunities for education, for professional
development, and that they are paid a living wage so that they
are not relying on some of the nutrition and food and other
supports to make ends meet for themselves and their families.
Senator Warren. Thank you so much, Ms. Matsui. Your points
are exactly right and it is why, when we talk about child care,
it is not just about making sure that we put money into the
system. It is making sure that the people who are working in
that system are fairly compensated.
Senator Tillis, are you with us?
Senator Tillis. I am.
Senator Warren. In the stead of the Chair, I recognize
Senator Tillis.
Senator Tillis. Thank you, Senator Warren.
Mr. Cooper, school closures have correlated with increased
child hospitalizations, a 20 percent increase in student
suicide attempts, 40 percent increase in student disruptive
behavior disorders. School closures are also keeping parents,
particularly women, from being able to go back to work because
of the vital role that schools play in child care during the
day.
Last year I did 70 telephone town halls with nearly a half
million people in North Carolina. And the one thing that became
clear, it is falling hardest on exceptional children or
children in exceptional education programs.
I know that you have three school-aged children. Can you
give me an idea of how this has personally impacted them?
Mr. Cooper. Thank you for that, Senator.
I would say that a lot of this hearing so far has been
about child care and we have just been missing the Occam's
razor, which is that women are leaving the workforce because
schools are closed. We are trying to solve a problem with money
rather than with common sense. Common sense says if we get the
schools open because they are safe, which we know they are,
women will return to the workforce. Right now, they are headed
home to handle the job that public school administrators are
unwilling to do.
Our kids have struggled for the last year. My kindergartner
saw the inside of a classroom for the first time a couple of
weeks ago. And that is disorienting, especially when we speak
to relatives across the country who shake their heads at us and
say ``Our schools have been open 5 days a week this entire
time. I do not understand what is going on.''
So we have to explain ``Well, unions are a little bit more
powerful here and they have got these demands.'' And it does
not make sense, and so our kids are falling behind. And no
amount of money in 2025 is going to fix what is happening to
our children right now
Senator Tillis. Mr. Cooper, in North Carolina I have
surveyed the landscape in the public schools, private schools,
charter schools. At least in North Carolina, we have seen a
number of the parochial schools, private schools, and some of
the charter schools open over this time period. What can you
tell me about the private schools in the D.C. area?
Mr. Cooper. Yes, I mean, that is such a good point,
Senator. Obviously, private schools have wait lists miles long
right now. People are emptying their bank accounts, frankly,
and their savings trying to figure out how they can get their
kids into a Catholic school.
But you know, Senator Menendez also raised the point of
private schools and said ``Well, they are different. They are
smaller, self-selected populations.'' Frankly, let us take
private schools out of the equation. Just on public schools,
well over half the districts in this country are open 5 days a
week. It is not a private versus public. Public schools over
this country have figured out how to safely open for months
because they are following the science. They are not waiting
around for a few extra billion dollars.
It is just a matter of will at this point. It is not a
matter that there still remains restrictions holding us back.
Senator Tillis. I know, again, I track this pretty closely.
I was Speaker of the House in North Carolina. We worked on
Opportunity Scholarships for children with disabilities,
ultimately for children who are below 150 percent of the
poverty level. Thank goodness that those 5,000 children are
able to go to school, most of them from the beginning of the
school year last year. So I do not really understand and--I do
not know, there may be members here who can bring it to my
attention--I am not aware of any serious public health risk or
super spreader events in these public schools.
The only thing I am aware of is a mother crying on a
telephone town hall because her child with developmental
disabilities, she does not have the skills to take care of this
child. And this child has lost nearly an academic year of
enrichment and the therapeutic value that comes from having a
trained professional to have access to them in public schools.
You know, it seems to me that there has to be something
more than the concern if a public health threat that is keeping
these schools closed. And we have children--the ones I am most
worried about are the same ones that we have Opportunity
Scholarships to in North Carolina, are the children who are
most likely to lose an academic year if we continue to have
teachers unions and others keep them away from the most
enriching experience they can have as young children.
So Mr. Cooper, I am sorry that you are going through this,
but you are not alone. There are hundreds of thousands of
students across the country. There are tens or hundreds of
thousands of students across the State of North Carolina--
although we are opening--that are suffering from this position.
Thank you for being here today.
Thank you, Senator Warren.
Mr. Cooper. I think our school is having a fire drill back
there, so sorry about the alarm.
Chairman Brown [presiding]. Thank you, Senator Tillis.
Senator Warner from Virginia is recognized.
Senator Warner. Thank you, Mr. Chairman and thank you for
holding this hearing.
One of the areas that I want to raise, and I know Mr.
Cooper has got some challenges around the Fairfax County
Schools process, but one thing Fairfax County has done a pretty
good job on is making sure we have got broadband.
Unfortunately, that is not the case for too many Virginians and
too many Americans.
I think, as somebody who had a background in this field for
years--my businesses were in telecom. I think if there is one
thing we learned out of 2020 and the crisis, it has been that
high-speed internet connectivity is an economic necessity, not
a ``nice to have'', whether you want to work at home, study at
home, telehealth. And frankly, having hot spots alone, where
you have to transport your kid to the school parking lot to
study, or for you to work, does not get it.
The American Rescue Plan made the largest single investment
in broadband in our country's history, $7 billion going into
some of the traditional programs like the Lifeline program and
the E-Rate program, $10 billion that we were able to secure
with more flexibility to actually encourage expansion of
coverage. It is terribly important. Too often, the existing
programs, they help on affordability but they do not end up
doing enough, in my mind, on expansion of coverage.
Ms. Parrott, you have mentioned the critical importance of
the long overdue nature of broadband investments. Again, within
the Capital Projects Fund we secured $10 billion. I would love
to have you make a comment on how we can make sure the Treasury
Department ensures that these dollars are well spent and that
they end up resulting in the kind of expansion of coverage that
I think we all know needs to be done.
Ms. Parrott. Thank you for that.
And of course, the other place that broadband investment
can happen is out of those State--flexible State fiscal aid
funds that are going to States, localities, territories, and
tribes. So that is another avenue for those kinds of
investments.
So look, I think implementation across all of the kinds of
areas that are touched by the American Rescue Plan is just of
critical importance. Whether it is housing vouchers, whether it
is broadband, whether it is the refundable tax credits,
sometimes the locus of that implementation is at the Federal
Government Level and sometimes it is primarily at the State and
local level.
And this question of oversight is going to be really
important. I am not a broadband expert but I know a lot about
Government oversight, having served at the Office of Management
and Budget. And so, I think across the board, I am really
heartened to see the Biden administration place a high priority
on implementation and ensuring, really tracking when dollars
are going out, how they are going out, and building in the
opportunity to course correct when issues arise, as they surely
will.
Senator Warner. Thank you and I just want to say on this
subject.
Paul de Sa, who is the SEC's top economist, has indicated
that to finish this, to get the 97 or 98 percent coverage we
need at the speeds we need--frankly, the current speed levels
of 25 mg down, 3 mg up, is not high enough.
It could take maybe another $75 or $80 billion and I am
proud to support some of the efforts that Mr. Clyburn in the
House and others in the Senate are making.
Ms. Matsui, I would like you to take the last part of my
time, though, and speak again on this question of how broadband
has become an absolute economic necessity going forward. We
have seen, obviously, the challenges of COVID fall
disproportionately on women, women with families. The
exacerbation of kids learning at home and not having access to
broadband makes these challenges even greater. As parents, and
women in particular, juggle the enormous demands how do we make
sure that--what kind of role will broadband play in evening the
playing field?
Ms. Matsui. Thank you for your question, Senator.
And I completely agree that for those families where women
are able to work at home, certainly equitable broadband access
enables that. We are definitely seeing, as you noted, the
disparities for low-income communities, for communities of
color being able to access broadband to be able to do remote
schooling adequately. And so, ensuring equitable broadband
access is certainly key to making sure that gaps and inequities
do not persist through the rest of the pandemic and the
accommodations that we have to make for the global health
crisis.
Thank you.
Senator Warner. Thank you, Mr. Chairman.
Chairman Brown. Thank you, Senator Warner.
The next three, and I have to duck out for another hearing
but I will be back. The next three are Senator Hagerty, and
then will turn it over to Senator Van Hollen, if you would. And
then Senator Van Hollen will turn it over to Senator Warnock,
if the three of you would cooperate to that. Thank you very
much.
Senator Hagerty.
Senator Hagerty. Thank you, Chairman Brown.
I will kick it over to Senator Van Hollen.
And I will be brief, but I must say this: I am quite
shocked at the conduct of this hearing today. We are not
talking about getting shots in arms. We are not talking about
the pandemic. This is a sales pitch for a $1.9 trillion wholly
partisan package that has very little to do with dealing with
the pandemic and very little to do with getting our economy
going again.
In fact, it puts in place all sorts of bad incentives. We
even talked about this during the course of the debate. It
sends stimulus checks to illegal immigrants. What sort of
incentive is that creating when we have got a crisis at our
border? We send stimulus checks to inmates. What possible
impact could that have on our economy, to send a stimulus check
to an inmate who is being cared for completely by the taxpayer
and will not be in a position to do anything with that in terms
of generating economic activity in our society.
This package is being sold to the American public for
something that it is not. This is not about the pandemic. That
is why we are not even talking about it in this hearing today.
We should be conducting oversight on the $4 trillion that
actually was passed on a bipartisan basis. There is $1 trillion
left there yet to be spent.
We need to be getting kids back into school, as Mr. Cooper
said. We need to be getting shots in arms, is what this hearing
was falsely billed as. We need to be focused on the pandemic
and recovering our economy. We are on the path to recovery now.
And what we have got right now is a $1.9 trillion freefall
spending spree that has loads of partisan wish list activity in
it, lots of socialist programs in it, and bailouts for
mismanaged States.
We should be talking about the pandemic. We should be doing
oversight to get our economy doing, not spending our time
selling a package that was passed on the thinnest or margins in
the Senate.
Thank you.
I yield back to Senator Van Hollen now.
Senator Van Hollen [presiding]. Thank you, Senator Hagerty
and let me thank all of our witnesses.
Just briefly, to respond, we are focused on all the efforts
the Congress has taken, including the American Rescue Plan,
which includes additional resources both to increase the supply
of vaccine and also, importantly, to distribute it more quickly
and also to deal with the economic fallout.
I will just remind everybody that President Trump was a
huge advocate of the individual payments that were included in
this bill and the Child Tax Credit is something that we think
is desperately needed to help lift kids out of poverty. In
fact, I hope, we will extend that.
The rental assistance is also a critical package to prevent
eviction and also to make sure that people can make those
rental payments. And of course, not every landlord is a big
corporation. We want to make sure that landlords are able to
pay their bills, as well.
But I want to ask Ms. Parrott, I want to thank you for your
testimony, as well as the report that the CBPP issued just
yesterday with respect to affordable housing going forward.
Right now, we have been working to keep people in their homes
and able to pay rent.
Senator Todd Young and I have a proposal to expand the home
voucher programs focusing on families with kids and helping
them move to areas of greater opportunity. In fact, this is a
bipartisan bill that proposes 500,000 additional vouchers. The
research has been very clear on how this can really help
families expand economic opportunities.
Can you talk a little bit about that in the context of
moving forward and what we want to consider as we talk about
the better part of Build Back Better?
Ms. Parrott. Sure. Housing instability is extremely
damaging to families and extremely damaging to children. So
when parents are worried about their ability to maintain their
homes, it raises the level of stress that parents are facing
and that children are facing, sometimes to levels that are
literally toxic for children's developing bodies.
When housing is unstable, families move a lot and they
often are in overcrowded doubled-up situations and sometimes
experience homelessness. All of those outcomes mean multiple
moves and often multiple school changes for children which sets
back their learning. Housing instability is also linked to
higher rates of foster care placements and long-term negative
effects on children.
But the really good news is that we know that housing
vouchers work. Housing vouchers have a marked effect, causative
effect, on housing stability. It reduces frequent moves. It
reduces overcrowding. And it reduces the share of families that
experience homelessness.
And so housing instability is real but the opportunity to
make real programs is right in front of us if we are willing to
put the resources into housing vouchers that have such a strong
track record.
Senator Van Hollen. Right, and there has been a lot of
discussion about dealing with the supply side on affordable
housing. And I agree that that is a very important element and
a necessary element, increasing the supply. But would you agree
that, in addition to increasing the supply, we also need to
move forward on this issue of housing vouchers?
Ms. Parrott. That is exactly right. So even--first of all,
some communities do not have a particularly large supply
problem. Other communities do. But even in communities with
adequate supply, there is an affordability problem, and that is
where housing vouchers come in.
But even when there is a supply problem, if we invest in
affordable housing, that housing by itself is still likely to
be out of reach for many low-income families, particularly
those with the lowest incomes. And so, marrying a supply
strategy with vouchers can really both expand supply and make
sure that then families can access that housing and afford it.
Senator Van Hollen Thank you.
Ms. Matsui, I mentioned earlier the CTC and the EITC
provisions and I want to thank the Chairman of this Committee,
Senator Brown, and others in our caucus for their efforts on
that, Senator Warnock. It is something that I have been pleased
to co-sponsor for years.
Can you talk about the importance of making that permanent
as we go forward?
Ms. Matsui. Absolutely and thank you so much both for the
question and for your leadership, Senator.
So, we know that even in positive economic times, when we
are not in the middle of a recession, women and women of color
especially make up a disproportionate share of the low-income
workforce and the low-wage workforce. These are jobs that offer
not only low wages and, for many women, they present
significant gender and racial wage gaps as well. But
frequently, these jobs are unstable. They do not offer the
number of hours that people want and, therefore, it is very
difficult for many families, even for women who are working
full-time at a minimum wage job to support their families on
their paychecks alone.
The Earned Income Tax Credit and the CTC therefore
represent an income boost that has significant positive effects
for women and for their families. It increases their ability to
work. It increases and improves long-term educational outcomes
for children. And it boosts families' health.
So the income increases that are represented by these tax
credits, even in regular or normal economic times, do improve
the well-being and economic stability of families. And those
are reasons that making these tax credit improvements permanent
is a good strategy, and equitable strategy, and an effective
strategy for improving the economic security and stability of
families going forward.
Senator Van Hollen Thank you. It is going to lift 52,000
Maryland children out of poverty and, of course, cut childhood
poverty in half in the United States.
Now let me turn it over to somebody who has been a very
strong voice for this. Senator Warnock, I am going to turn it
over to you, and if you can finish out the hearing.
Senator Warnock [presiding]. Thank you so much, Senator Van
Hollen and I want to just continue along the lines of what you
introduced. I am very excited about the expanded Earned Income
Tax Credit, the expanded Child Tax Credit. This will help a
million families with children in Georgia alone and will lift
171,000 Georgia children out of poverty.
Can you explain, Ms. Matsui or Ms. Parrott, for those who
are saying this is some liberal wish-list, the ways in which
the COVID-19 pandemic has both illuminated and exacerbated the
disparities that we see and how this expanded Child Tax Credit
and Earned Income Tax Credit both helps these families and
helps the economy as an appropriate response to the COVID-19
pandemic?
Ms. Parrott. So thank you for the question.
These expansions are incredibly important. And it is
important to talk about both the Earned Income Tax Credit and
the Child Tax Credit. The Earned Income Tax Credit expansion is
for workers in low-pay jobs that do not have minor children at
home. Prior to the expansion, these workers were eligible for a
tiny Earned Income Tax Credit. It was so small that we were
taxing 5.8 million workers into poverty or deeper into poverty
because the Earned Income Tax Credit that was available to them
was so low.
The EITC expansion will help 17 million workers overall,
2.8 million Black workers, 2.8 million Latino workers, and
almost 700,000 Asian-American workers. And that group of people
that we were taxing into poverty is similarly
disproportionately workers of color.
The Child Tax Credit expansion does several things. It
increases the Child Tax Credit available to most children. And
for the first time, it makes the full credit available to 27
million children who, prior to the expansion, got only a
partial credit or no credit at all because their families'
incomes were too low. We were providing less help to the
families that needed it most.
Of those 27 million children, 9.9 million are Latino, 5.7
million are Black, and more than 800,000 are Asian Americans.
Fully half of all Black and all Latino children did not get the
full Child Tax Credit because their families' incomes were too
low prior to the expansion. The expansion is estimated to lift
4.1 million children out of poverty, disproportionately
children of color.
The expansion also reduces deep poverty, which is the
circumstance of children living far below the poverty line.
Now some have said that this Child Tax Credit expansion is
going to discourage work, and so I would like to take just a
moment to tell you what the experts at the National Academies
of Sciences said about that. They assessed a very similar
proposal that was a child allowance, so very similar, that
would similarly be available to all poor and low-income
children, as well as middle-income children. They assessed that
the proposal, that 99 percent of the low- and moderate-income
working adults that would see an increase because of the child
allowance proposal would remain employed. So there was not
going to be, by their expert views, droves of people leaving
the workforce. That makes sense because $250 or $300 per month
per child is not enough to raise a family.
They also found that the vast majority of parents would not
reduce their hours of work. And among the small group that they
projected may reduce their hours of work, it was an estimated 1
hour per week. And in many cases, those are people who are
actually working long hours, often in shift work, where
reducing their hours somewhat could have very positive impacts
on themselves and their children.
So I think it is really important to focus on the
importance and what it does to reduce child poverty, how that
changes the opportunity and trajectories of children and not
overstate or overblow possible negative impacts that experts
have really studied quite extensively and found to be highly
unlikely.
Thank you.
Senator Warnock. So it seems that this support actually is
part of the infrastructure that enables people to work, and
that by doing this we provide support for these families but
also for the economy. It seems like one more example of what I
often say, and that is that quite often the right thing to do
is also the smart thing to do. It is good for these families,
good for the economy.
Thank you so much.
Chairman Brown [presiding]. Thank you, Senator Warnock.
Thank you all for your cooperation today.
Senator Toomey, I am not sure if he is still with us. This
has been very disjointed, and I apologize, and all four of you
have been really good witnesses, being so cooperative.
If Senator Toomey wants to make a couple of closing remarks
before we wrap up?
[No response.]
Chairman Brown. Thank you then.
I hear lots of discussions today. Senator McConnell and
Senate Republicans do not decide what is a partisan issue, the
American public does. And the--I mean, we have heard some
critics grasping at straws trying to find something to
criticize on this very popular--popular among Democrats,
Independents, and Republicans in our country--very popular
rescue plan that Americans have been demanding for more than a
year.
Their argument amounts essentially to we should not do
anything more than the bare minimum. And here you are, trying
to make life better for people than it was a year ago. And we
are, and that is the point, and that is what so many of us are
very, very proud of.
I would say March 6th, that Saturday after we had been up
all night voting, was the best day of my political career. I am
so proud of how we all came together in this country and passed
the American Rescue Plan.
Thank you again to the witnesses, all four of you, for
being here today and providing testimony.
For Senators who wish to submit questions for the record,
those questions are due 1 week from today, Thursday, April 1st.
The witnesses will have 45 days to respond to any of those
questions. So please do that, to the four of you.
Thank you again.
With that, the hearing is adjourned.
[Whereupon, at 11:09 a.m., the hearing was adjourned.]
[Prepared statements supplied for the record follow:]
PREPARED STATEMENT OF CHAIRMAN SHERROD BROWN
Yesterday in this Committee, we heard from Treasury Secretary
Yellen and Federal Reserve Chair Powell as they gave their quarterly
CARES Act report to Congress.
There was a clear message from their testimony: The American Rescue
Plan is the type of fiscal stimulus we need. We grow the economy when
we invest in the people who make it work.
That's what we tried to do with the CARES Act, and it's what we did
in the American Rescue Plan.
We know what we need: shots in arms, money in families' pockets,
children in schools, workers in jobs, and a roof over families' heads.
That's what President Biden promised, and we are delivering
immediate results--results that are already transforming people's lives
for the better.
We've gotten more than 100 million shots in people's arms, ahead of
schedule.
More than 100 million checks have been deposited in Americans' bank
accounts.
More schools are bringing students back into the classroom every
day.
Yesterday, we talked about how the Rescue Plan will jumpstart our
recovery. Today, we look at how that lays the groundwork for a better
future.
We've heard some critics grasping at straws, trying to find
something to criticize in this popular Rescue Plan that Americans have
been demanding for a year.
Their argument amounts to, ``we shouldn't do anything more than the
bare minimum, and here you are trying to make life better for people
than it was a year ago.''
Yes, we are--that's the point.
We must aim higher than just returning to the status quo.
If you talk to the workers and families that I do in Ohio, you
would know that the status quo wasn't working for a whole lot of
people.
It wasn't working for the parents in Cleveland, who are still
renting a house with lead in the paint, because their finances never
recovered from their 2009 foreclosure.
It wasn't working for the student in the foothills of Appalachia in
Jackson County, who had to go to her grandmother's house to do her
homework, because it was on a hill and was the only place she could get
an internet connection.
It wasn't working for the auto worker in Lordstown, who lost his
job when GM abandoned that community and decided to make its latest
vehicle in Mexico instead of Ohio.
It wasn't working for the mother in Dayton, who works two nonunion
jobs that together don't even cover the bills, and whose childcare
costs have gotten so high she's considering a third.
There's a common thread in all of these Ohioans' stories: their
hard work doesn't pay off.
For some of them, their hard work doesn't pay off like it used to--
like they thought it would, and like it did for their parents.
For others, their hard work, and the work of their parents and
grandparents, has never really paid off like it should.
And that growing inequality has only made the pandemic's economic
pain worse.
While corporate profits and CEO pay have soared for decades now, 40
percent of Americans reported they wouldn't be able to come up with
$400 in an emergency--if their car breaks down, or they have to take
their child to the emergency room, or their hours get cut back.
And that was before the pandemic. Last March, millions of people
faced emergencies, all at once. And we saw the damage that did to the
economy.
The top-down strategy we've tried over and over since the 1980s
doesn't work. It's time to try something different.
We get to decide what kind of recovery we have, and whether the
economy we rebuild reflects our values.
We get to decide whether Wall Street continues calling the shots,
or whether we begin to remake our economy in a way that grows the
middle class.
The American Rescue Plan is a good start.
Instead of funneling money to Wall Street and the largest
corporations, and crossing our fingers and hoping they'll pass some of
that money on to everyone else, we're getting help to people and
communities.
In addition to the vaccines, we passed support for housing, so that
families have a roof over their heads, and can keep the lights on, and
not fall behind on their rent or mortgage.
We're supporting our transit systems, so that workers can get to
work and get to vaccination sites.
And we are giving the vast majority of families more economic
security, by giving them checks and expanding the Earned Income Tax
Credit and the Child Tax Credit. Ninety-two percent of Ohio kids are
going to see more money in their families' pockets because of the
Rescue Plan.
We need to build on these investments. Often the greatest progress
comes out of the darkest times.
Think back to the 1930s. FDR and his cabinet saw the rise of
fascism and the scale of the Depression's damage--and the staggering
inequality of the Gilded Age economy that had only made these crises
worse.
They didn't just settle for muddling through, they didn't try to
take us back to 1928--they built a better system that led to rising
prosperity for a broader share of the country, and the strongest middle
class the world has ever seen.
We can do the same thing again. We can rebuild that New Deal to
reflect the way people live and work today, and we can expand it to all
the women and people of color who were left out a century ago.
When we do, we strengthen our democracy and we unleash our
economy's full potential.
I hope my colleagues will join me in building back better than we
were before.
______
PREPARED STATEMENT OF SENATOR PATRICK J. TOOMEY
Chairman Brown, thank you.
There are a lot of reasons for optimism about the physical and
economic health of our country. On the physical health front, we've put
more than 127 million vaccine doses in arms. Around half the U.S.
population has either had the virus or been vaccinated. The daily COVID
case count is falling.
On the economic health front, the economy is in full recovery. The
unemployment rate has dropped from almost 15 percent in April 2020 to
6.2 percent this February. Eighteen States have unemployment rates
below 5 percent. GDP has grown the last two quarters, and economic
growth is expected to be strong this year.
All of these positive developments were enabled by the resilience
of the American people, the ingenuity of the private sector, which
produced vaccines in record time, and the spirit of cooperation in
Congress that provided almost $4 trillion in relief through five
overwhelmingly bipartisan bills.
Unfortunately, the $1.9 trillion Democrat spending bill is not a
reason for optimism. It was rammed through Congress on a partisan
basis, even though a bipartisan deal was possible. It has almost
nothing to do with an economic recovery. It has almost nothing to do
with COVID.
How do we know for sure this bill has nothing to do with an
economic recovery? The nonpartisan Congressional Budget Office says
only fraction of the money in the Democrat spending bill can even be
spent in 2021. For example, CBO estimates just 5 percent of the $126
billion for K-12 education can be spent in 2021.
This bill has almost nothing to do with COVID. So what's in it?
$414 billion for so-called stimulus checks that won't achieve their
purported goals. They don't stimulate the economy, as, according to one
study, three-quarters of the checks will go to savings. They're
terribly untargeted, as millions of Americans that never lost income
will receive checks, including some with six figure incomes. To make
matters worse, stimulus checks are going to convicted murderers,
rapists, and child sex abusers currently in prison. Amazingly,
Democrats blocked the Senate from passing legislation to redirect
stimulus checks from such criminals to crime victims.
There's also $350 billion to bail out fiscally mismanaged States
and local governments. On the whole, State and local tax collections
set a new record in 2020. Despite that, in 2020 the Federal Government
sent more than $500 billion to States and local governments for COVID
relief. And on top of that, Democrats insisted on sending them another
$350 billion in this bill. This new spending is truly amazing as it's
not needed. In Pennsylvania, a prominent news item across the State has
been the story of local governments that are trying to figure out how
to spend the unexpected and unnecessary windfall of cash they're
receiving.
Some provisions in the Democrat spending bill are so unrelated to
COVID, it's hard to read them with a straight face. For example, $86
billion to bail out multi-employer pensions without requiring any
reform, $270 million for the National Endowments for the Arts and
Humanities, and $4 billion for ``reparations''-as the Chairwoman of the
Senate Agriculture Committee called a loan forgiveness program for
farmers and ranchers that's based purely on race and ethnicity.
Today, we'll hear from two witnesses how the Democrat spending bill
contains provisions that are harmful to American families. Rory Cooper
is a father of three public school students who's known as ``Mr. Open
the Schools.'' As Mr. Cooper notes, the Democrat stimulus throws $126
billion dollars at K-12 schools without requiring them to reopen. Many
schools remain closed or partially closed due to powerful special
interests-the teachers' unions. This is despite the fact that CDC
research shows it's safe to re-open schools. School closures are
harming students, especially low-income students, and harming parents,
particularly women, by preventing them from staying in the workforce.
We'll also hear from Angela Rachidi, a scholar at AEI. She'll
describe how the Democrat spending bill abandons Clinton era welfare
reforms that have been so successful in reducing poverty. The Democrat
spending bill increases welfare benefits in many ways. One example is
through the Child Tax Credit, which the bill makes fully refundable and
available to parents that do not earn income. This undermines a proven
driver of poverty reduction, which is tying welfare benefits to work
requirements. The Democrat spending bill also has a plus-up in
unemployment benefits that will result in about half of all recipients
being paid more not to work than they get paid to work. This creates a
disincentive to work that will slow the economic recovery.
In my view, the Democrat stimulus is a cause for concern, not for
celebration. While I remain optimistic about the direction of our
country, I'm deeply disappointed that President Biden abandoned the
path of unity that he pledged at his inauguration and instead chose to
ram through a wasteful, partisan spending bill that's largely unrelated
to COVID and that slows our economic recovery, undermines successful
poverty reduction reforms, and fails to get kids back in classrooms.
______
PREPARED STATEMENT OF SHARON PARROTT
President, Center for Budget and Policy Priorities
March 25, 2021
Chairman Brown, Ranking Member Toomey, Members of the Committee,
thank you for the opportunity to testify before you this morning at
this important hearing. I am Sharon Parrott, President of the Center on
Budget and Policy Priorities, a nonpartisan research and policy
institute in Washington, D.C.
In the following pages, I will make four main points:
First, the economy still has a large net loss of jobs,
millions are out of work, and millions are struggling to put
food on the table and have fallen behind on their rent because
of the pandemic and its economic fallout. The crisis has taken
a disproportionate toll on low-income workers, their families,
and people of color, shining a light on and exacerbating the
nation's long-standing racial and economic inequities.
Second, the American Rescue Plan Act, which builds on the
CARES Act and Families First Act of last spring and the
December relief package, is providing much needed help for tens
of millions of people facing difficulties paying their bills,
while also providing important aid to States, localities,
territories, and tribes that they can use to fill revenue
holes, address COVID-related needs, and address ``unfinished
learning'' that students need to master.
Third, the nation would have needed fewer stopgap measures
during this crisis if we had permanent policies in place that
provided sufficient supports for households that struggle to
afford the basics, that offered adequate jobless benefits
particularly to workers in low-paid jobs who often receive no
jobless benefits at all, and that ensured that everyone had
health coverage.
And fourth, the President and Congress will soon have a
historic opportunity, through forthcoming recovery legislation,
to invest in an equitable recovery that enables everyone to
share in its benefits. The nation can afford to make these
investments and should start down the road of building a more
adequate and fair tax system.
Millions Still Facing Hardship
Over the last year, the global pandemic and resulting economic
fallout have taken an enormous toll on the economy and households,
imposing steep job losses and great hardship that have fallen
disproportionately on people in low-wage jobs and households with
children, with particularly steep costs imposed on Black, Latino,
immigrant, and Indigenous people.
Lost Jobs and Lost Pay
In February 2021 there were still 9.5 million fewer payroll jobs
than in February 2020. (See Figure 1.) Black and Latino unemployment
stood at 9.9 percent and 8.5 percent, respectively, well above the
white unemployment rate of 5.6 percent--which itself is too high.
Unemployment is also higher among workers who were born outside the
United States, which includes individuals who are now U.S. citizens.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Most of the jobs lost during COVID-19 and the economic crisis have
come in industries that pay low average wages, with the lowest-paying
industries accounting for 30 percent of all jobs but 55 percent of the
jobs lost from February 2020 to February 2021 (the latest month of
Labor Department employment data). Jobs in low-paying industries were
down more than twice as much between February 2020 and February 2021
(11.2 percent) as in medium-wage industries (5.1 percent) and more than
three times as much as in high-wage industries (3.0 percent). (See
Figure 2.)
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Due to a long history of racism and discrimination and starkly
unequal opportunities in education, housing, health care, and
employment, Black and Latino workers are disproportionately represented
in low-paying industries, a key reason why Black and Latino
unemployment is so much higher than white unemployment. Workers in low-
paid industries that kept their jobs were also more likely than others
to work on-site rather than remotely, raising their risk of COVID-19.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The impact of joblessness goes well beyond the workers themselves
who are out of work. Some 27 million people (including 6.6 million
children) either were officially ``unemployed'' (meaning they actively
looked for work in the last four weeks or were temporarily laid off) or
lived with an unemployed family member in February, according to the
basic monthly Current Population Survey that the Census Bureau released
on March 10. But the official definition of ``unemployed'' understates
the weakness in the labor market and the degree of hardship joblessness
is causing. (See Figure 3.) The official definition of unemployed
leaves out many workers who either lacked work or pay--including 4.2
million jobless workers in February who did not look for work due to
COVID-19, according to the Labor Department. This includes workers who
are unable to work due to their own health or the health of a family
member and substantial numbers of parents, particularly mothers, who
are not working because schools and child care are not fully open for
in-person school and services. Also omitted are over 700,000 workers
who reported that they had a job but that they were absent from work
and lost pay in the last four weeks ``because their employer closed or
lost business due to the coronavirus pandemic,'' according to our
calculations.
All told, we estimate, as many as 38 million people in February,
including nearly 10 million children, lived in a family in which at
least one adult did not have paid work in the last week due to
unemployment or the pandemic.
High Levels of Hardship
While the Rescue Plan will begin to reduce hardship as stimulus
payments, rental assistance, the Child Tax Credit, and other forms of
aid begin to reach households, as of February 2021, Census data show
tens of millions of households struggle to pay their bills, with
hardship rates particularly high among households of color and
households with children.
Since late August, the Census Bureau's Household Pulse Survey has
provided data on the number of adults struggling to cover usual
household expenses such as food, rent or mortgage, car payments,
medical expenses, or student loans--and it paints a distressing picture
of ongoing hardship.
Nearly 81 million adults (35 percent of all adults in America)
reported between February 17 and March 1 that their household found it
somewhat or very difficult to cover usual expenses in the past seven
days, and that figure rises to 41 percent for adults living with
children. Black and Latino adults reported higher rates of difficulty
covering expenses: 53 percent and 49 percent, respectively, compared to
30 percent for Asian adults and 27 percent for white adults. Grouped
together, 47 percent of American Indian, Alaska Native, Native
Hawaiian, Pacific Islander, and multiracial adults reported difficulty
paying for usual expenses (these groups are reported on together
because the sample size for each group individually is too small).
An estimated 42 percent of children live in households that have
trouble covering usual expenses, according to our analysis of the Pulse
survey data collected from February 3 to 15. They include 61 percent of
children in Black households, 52 percent of children in Latino
households, 34 percent of children in Asian households, and 33 percent
of children in white households.
More specifically:
Rent or mortgage. An estimated 13.5 million adults living in rental
housing--nearly 1 in 5 adult renters--were not caught up on rent,
according to data collected from February 17 to March 1. Renters of
color were likelier to report that their household was not caught up on
rent: 33 percent of Black renters, 20 percent of Latino renters, and 16
percent of Asian renters reported not being caught up on rent, compared
to 13 percent of white renters. The rate was 22 percent for American
Indian, Alaska Native, Native Hawaiian, Pacific Islander, and
multiracial adults, who are grouped together due to data limitations.
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In addition, 28 percent of renters who are parents or otherwise
live with children reported that they were not caught up on rent,
compared to 12 percent of adult renters who are not living with anyone
under age 18. (See Figure 4.) Children in renter households also face
high rates of food hardship: over 1 in 4 children in rental housing
live in a household that didn't have enough to eat, according to data
for the period February 3 to 15 (the latest available data to make
these estimates). And 4 in 10 children in rental housing live in a
household that isn't getting enough to eat or isn't caught up on rent.
While households that make mortgage payments typically have higher
incomes than renters, they, too, face difficulties, especially if they
have lost their jobs or seen their incomes fall significantly. An
estimated 10.3 million adults are in a household that is not caught up
in its mortgage payment.
Food. Some 22 million adults (11 percent of all adults) reported
that their household sometimes or often didn't have enough to eat in
the last seven days, according to Pulse data collected from February 17
to March 1--which was far above the prepandemic rate: an Agriculture
Department survey found that 3.4 percent of adults reported that their
household had ``not enough to eat'' at some point over the full 12
months of 2019.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Adults in households with children were likelier to report that the
household didn't get enough to eat: 14 percent, compared to 8 percent
for households without children. And 10 to 15 percent of adults with
children reported that their children sometimes or often didn't eat
enough in the last 7 days because they couldn't afford it, well above
the prepandemic figure. In addition, our analysis of more detailed data
from the Pulse Survey from February 3 to 15 shows that 6 to 10 million
children live in a household where children didn't eat enough in the
last seven days because the household couldn't afford it.
Black and Latino adults were more than twice as likely as white
adults to report that their household did not get enough to eat: 22
percent and 16 percent, respectively, compared to 7 percent of white
adults. (See Figure 5.) Grouped together, American Indian, Alaska
Native, Native Hawaiian, Pacific Islander, or multiracial adults were
more than twice as likely (at 19 percent) as white adults to report
that their household did not get enough to eat.
The American Rescue Plan Act
The American Rescue Plan Act will provide needed help to tens of
millions of people, reduce hardship, help school districts address
students' ``unfinished learning'' (the learning they have missed over
the last year because of disruptions to education, remote learning, and
other pandemic-related issues), and bolster the economy. Along with the
provisions described below, it includes a new round of economic impact
(stimulus) payments, public health investments, more child care
funding, and aid to businesses.
Helping Jobless Workers
The Rescue Plan will extend critical unemployment benefits that are
helping jobless workers pay their bills and care for their families.
The December relief package reinstated a Federal unemployment
benefit increase, provided more weeks of benefits so that jobless
workers wouldn't lose them while the nation struggled with the current
health and economic crisis, and continued the Pandemic Unemployment
Assistance (PUA) program, which expands benefit eligibility to more
jobless workers. These provisions were slated to expire in mid-March,
and the Rescue Plan extends them through September 6. The early
September cutoff is problematic, however. Joblessness--appropriately
measured to take into account those who are out of work due to the
crisis but not captured by the official unemployment rate--particularly
among workers of color and workers without a college degree, will
likely remain elevated in the fall. Congress must be prepared to act to
extend this unemployment benefit before September 6 if joblessness--
overall or among particular groups of workers for whom the recovery is
lagging--remains high. It is important to note that even if the labor
market overall has rebounded considerably, extended jobless benefits
may still be warranted if joblessness remains elevated among particular
groups of workers. The early September cutoff date means that Congress
will need to act before the end of the fiscal year to avert a cutoff,
which would hurt workers and their families and cause needless
administrative headaches for State unemployment programs still
struggling to effectively administer these expanded benefit programs.
Helping Households Struggling To Make Ends Meet
Housing. The Rescue Plan includes critical housing assistance for
millions who are struggling to pay rent and avoid eviction, and badly
needed funds for communities to address homelessness during the
pandemic.
The housing and homelessness funding in the Rescue Plan will
supplement $25 billion in emergency rental assistance from December's
relief package. The Rescue Plan builds on these efforts by providing an
additional $21.6 billion in emergency rental assistance; this $46.6
billion total investment will enable communities nationwide to help
approximately 4 to 6 million households avert eviction and housing
instability. The Rescue Plan also includes substantial resources to
mitigate the devastating effects of homelessness. The Department of
Housing and Urban Development's recently released 2020 Annual
Homelessness Assessment Report shows that homelessness--especially
unsheltered homelessness--was increasing at an alarming rate even
before the pandemic, and communities across the country report that the
pandemic has made things even worse. The Rescue Plan includes $5
billion for approximately 65,000 Housing Choice Vouchers to serve
people experiencing or at risk of homelessness, and $5 billion in HOME
Investment Partnerships Program funding to develop approximately 20,500
units of affordable or supportive housing for people experiencing
homelessness or at risk of homelessness. These investments will enable
communities to put thousands of individuals and families who have been
extremely hard hit by the public health and economic impact of the
pandemic on the path towards recovery.
The Rescue Plan also includes housing resources for other highly
impacted communities, including $750 million in housing aid for tribal
nations and Native Hawaiians; $139 million for rural housing
assistance; $100 million for housing counseling services for renters
and homeowners; and $20 million to support fair housing activities. It
also provides $10 billion to help homeowners who are experiencing
financial hardship due to COVID-19 maintain their mortgage, tax, and
utility payments and avoid foreclosure and displacement.
Helping those experiencing homelessness secure housing and helping
those behind on rent catch up and avert eviction are critical to
fighting the pandemic itself (COVID can be more easily transmitted in
congregate shelters, on the streets, or in over-crowded housing),
stabilizing families, and preventing children from disruptive moves and
school changes. Providing rental assistance to families to prevent
evictions and homelessness--which are associated with increased
likelihood for children with cognitive and mental health problems,
physical health problems such as asthma, physical assaults, and poor
school performance--can also have far-reaching implications for
children's lives. In addition, rental assistance reduces families'
chances of having a child placed into foster care and the frequency
with which their children must change schools, and may improve test
scores for some categories of children.
Tax credits. The Rescue Plan temporarily makes the full Child Tax
Credit available to all poor and low-income children, increases the
size of the Child Tax Credit, and provides an expanded Earned Income
Tax Credit (EITC) for far more low-paid adults without minor children
at home--driving a historic reduction in child poverty and providing
timely income support for millions of people. The expansions apply to
tax year 2021, with part of the Child Tax Credit being delivered in
advance later this year (rather than being delivered next year after
households file a tax return).
Prior to the expansion in the Rescue Plan, some 27 million children
received a partial Child Tax Credit or no credit at all because their
families' incomes were too low. The Rescue Plan makes the full Child
Tax Credit available to children in families with low or no earnings,
raises the maximum credit from $2,000 to $3,000 per child (and $3,600
for children under age 6), and extends the credit to 17-year-olds. The
increase in the maximum amount will begin to phase out for heads of
households making $112,500 and married couples making $150,000. The
Rescue Plan will lift 4.1 million additional children above the poverty
line--cutting the number of children in poverty by more than 40
percent--and lift 1.1 million children above half the poverty line
(referred to as ``deep poverty''). Among the children that the Child
Tax Credit expansion will lift above the poverty line, some 1.2 million
are Black and 1.7 million are Latino.
The Rescue Plan also raises the EITC for adults in low-paid jobs
who are not raising children at home and now get only a tiny credit or
no credit at all. It raises the maximum EITC for these ``childless
workers'' from about $540 to about $1,500, raises the income cap for
them to qualify from about $16,000 to at least $21,000, and expands the
age range of those eligible to include younger adults aged 19-24 who
aren't full-time students and those 65 and over. That will provide
timely income support to over 17 million people who work for low pay,
including the 5.8 million childless workers aged 19-65 (excluding full-
time students aged 19-23) who are now the lone group that the Federal
tax code taxes into, or deeper into, poverty because their payroll
taxes (and, for some, income taxes) exceed any EITC they receive.
These expansions will help push against racial disparities. Before
the Rescue Plan, about half of all Black and Latino children were
getting only a partial Child Tax Credit or no credit at all because
their families' incomes were too low to qualify for the full credit.
That design flaw in the Child Tax Credit came on top of long-standing
employment discrimination, unequal opportunity in education and
housing, and other factors that leave more Black and Latino households
struggling to make ends meet. Similarly, the 5.8 million childless
adults in low-paid jobs who are taxed into, or deeper into, poverty are
disproportionately people of color: about 26 percent are Latino and 18
percent are Black, compared to 19 percent and 12 percent of the
population, respectively.
In two historic firsts, the Rescue Plan also extends a Federal
supplement to help Puerto Rico expand its own EITC (which went into
effect in 2019) and corrects a long-standing limitation by which only
families with three or more children in the Commonwealth can claim the
Child Tax Credit. It marks the first time that Puerto Rico receives
Federal EITC dollars since the EITC was established in the continental
U.S. nearly half a century ago, and the first time that families with
one or two children may claim the Child Tax Credit since it was
established in the late 1990s. Both credits will provide a crucial
boost to hundreds of thousands of families in Puerto Rico, whose
poverty rates of 43 percent overall and 57 percent for children are
among the nation's highest.
Food assistance. The Rescue Plan extends and expands nutrition
assistance to help address today's extraordinarily high levels of
hunger and hardship.
The Rescue Plan extends, through September, a 15 percent increase
in SNAP benefits from December's relief package that was slated to
expire in June. It lets States continue, through the summer and through
the end of the COVID-19 public health emergency, the Pandemic EBT (P-
EBT) program, which provides grocery benefits to replace meals that
children miss when they do not attend school or child care in person.
Extending this benefit through the summer is important, providing a
bridge to help families until school reopens, hopefully fully in-
person, for the next school year. Food insecurity among children often
rises in the summer when they aren't able to access school meals; these
benefits will help families afford food over the summer.
The Rescue Plan also provides funds to modernize the WIC nutrition
program for low-income women, infants, and children, support innovative
service delivery, conduct robust outreach, and temporarily raise the
amount of fruit and vegetables that participants can get. These steps
will improve a critical program that boosts health and cognitive
outcomes for children but that served fewer individuals in fiscal 2020
than the prior year despite a surge in food hardship during the
pandemic. And it adds $1 billion to the capped block grants for food
assistance that Puerto Rico, American Samoa, and the Northern Mariana
Islands receive instead of SNAP, enabling them to better meet their
residents' food needs over the next several years.
Help for families with the lowest incomes. The Rescue Plan includes
$1 billion for a Pandemic Emergency Assistance fund to enable States,
tribes, and territories to help families with the lowest incomes cover
their additional pandemic-driven expenses and avert eviction and other
hardships. These are funds States can use flexibly to fill in gaps left
by other investments.
States, territories, and tribes can use the new fund to provide
households with nonrecurrent, short-term benefits--that is, benefits
that: (1) address a specific crisis or episode of need; (2) don't meet
recurring or ongoing needs; and (3) don't extend beyond four months.
States could direct funds to the families that most need them, and
States need not limit payments to families receiving Temporary
Assistance for Needy Families (TANF) cash assistance. States can use
the funds, for instance, to help families that don't get emergency
housing assistance pay their back rent and avoid eviction, or help
families fleeing domestic violence cover their moving costs and initial
rental payments.
Expanding Health Care
The Rescue Plan will make comprehensive health coverage more
affordable and accessible for millions of people during the current
crisis.
Comprehensive health coverage is important under any circumstance
because it improves people's access to care, financial security, and
health outcomes. But preserving and extending coverage is even more
important now, during COVID-19 and its economic fallout, because it
will shield families from financial hardship and support public health
efforts, easing people's access to testing, treatment, and vaccines.
Prior to the Rescue Plan, the relief measures that policymakers enacted
in 2020 did not extend health coverage or make it more affordable.
To make marketplace coverage more affordable, the Rescue Plan
eliminates or vastly reduces premiums for many people of low or
moderate income who enroll in plans through the Affordable Care Act
(ACA) marketplaces, and it provides new help to people with somewhat
higher incomes who face high premiums. These provisions lower premiums
for most current marketplace enrollees and expand coverage to 1.3
million people who would otherwise be uninsured, according to the
Congressional Budget Office. The Rescue Plan improves affordability
and reduces the number of uninsured people in three other ways: (1)
protecting marketplace enrollees, especially those whose income
fluctuated last year, from having to repay large portions of their
Federal premium tax credits; (2) making it easier for those getting
unemployment benefits to afford coverage; and (3) assisting people who
recently lost their job and want to continue their current coverage to
afford what's known as ``COBRA'' coverage through September.
The Rescue Plan also increases financial incentives for the 14
States that have not implemented the ACA's Medicaid expansion to do so,
which would provide critical coverage to nearly 4 million uninsured
people (if all States adopted the expansion). And it will strengthen
Medicaid coverage in other ways--for instance, with higher Federal
matching funds to help more seniors and people with disabilities get
services in the community instead of nursing homes, a new State option
to extend Medicaid or Children's Health Insurance Program coverage to
12 months after childbirth for postpartum people, and an option to
cover uninsured people for testing, vaccines, and treatment of COVID-
19.
Boosting States, Strengthening Education
The Rescue Plan provides $350 billion to help States, localities,
tribal governments, and territories cover costs generated by COVID-19
and the economic fallout and offset revenue losses, which are
substantial in some places.
The pandemic has imposed significant costs on State and local
governments to fight the virus, deliver services despite public-health-
related restrictions, and help struggling people and businesses. These
costs will continue in the months ahead even if the pandemic is
ultimately contained. Many millions of people, particularly low-income
people and people of color, are struggling with hunger, have large
unpaid rent bills, face mental health challenges as a result of the
pandemic, or are enduring other forms of hardship. Millions of children
effectively have a year of learning they need to regain that will
require time and resources--such as investments in longer school days,
extended school years, and intensive tutoring for multiple years--to
address. Households, as well as millions of struggling small
businesses, will require support to make it through the pandemic and
recover from its harm. While Federal support provides important direct
assistance, State and local governments will need to deliver a wide
range of localized supports and services and sustain them over a long
period of time.
While the pandemic's hit on State revenues has been less than
feared, revenues in most States remain below prepandemic projections,
and some States have experienced severe revenue losses. Most cities and
counties received no direct Federal aid prior to the Rescue Plan, and
revenue sources they depend upon--including hotel and restaurant
charges, parking fees, and business license fees--have been hit
particularly hard. Many tribal governments are dependent on casinos and
other forms of revenue that have been hit especially hard.
Along with the other costs cited above, States and the other
jurisdictions also can use the additional Federal funding to help pay
for long overdue investments in broadband (a need that COVID-19
particularly exposed) and for clean water and sewer infrastructure
projects, as well as to provide ``premium pay'' to essential public
workers. In addition, the Rescue Plan provides a separate $10 billion
to States, territories, and tribal nations for capital projects. To
help ensure that States spend the Federal aid as intended, the Rescue
Plan requires that any State or territory adopting net tax cuts lose an
equivalent amount in Federal aid. States remain free to enact tax cuts,
but they may lose an equivalent amount of aid if the Treasury
Department determines that they used the aid directly or indirectly to
fill in for the tax cuts.
With States and localities facing so many other demands on their
resources, the Rescue Plan also provides $123 billion in new, mostly
flexible funds that school districts can spend through the 2023-24
school year to address the pandemic and its effects on student
learning. This is the largest-ever one-time Federal investment in K-12
education, but entirely appropriate in light of school funding needs.
Historically, K-12 schooling has been funded overwhelmingly by
States and localities; they currently provide 92 percent of funding,
with the Federal Government providing the rest. COVID-19, however,
forced States to cut funding and created enormous financial and
educational challenges that States and localities will be hard pressed
to meet over the next several years without Federal assistance. K-12
funding comprises about 26 percent of State budgets and, in the absence
of the general fiscal aid and the education-specific funding, many
States would have found it challenging to shield school funding from
cuts. Even before COVID-19, schools endured years of inadequate and
inequitable funding. Some 15 to 20 States were still providing less
funding for K-12 schools when the pandemic hit than before the Great
Recession of a decade ago in per-pupil, inflation-adjusted terms. When
COVID-19 hit, schools were employing about 77,000 fewer teachers and
other workers while educating about 1.5 million more children.
The CARES Act provided $13.2 billion for K-12 education and
December's package provided another $54 billion, but schools will need
far more to pay for distance learning, safe in-person instruction,
caring for students' physical and mental health, and, most
significantly, helping children catch up from substantial unfinished
learning. Schools need to close the ``digital divide'' so all students
and teachers have access to devices and connectivity. They can also use
the funding to safely operate in-person schools, which may require more
buses and drivers and additional classrooms and teachers to maintain
social distancing. A quarter of schools have no full- or part-time
nurse, and most schools lack counselling support to help students
navigate the mental-health challenges stemming from the pandemic, its
economic fallout, and now the return to school for many students.
But beyond addressing the costs of operating remotely and in
person, the Rescue Plan's funds will enable school districts to make
critical investments to address widespread unfinished learning that the
pandemic and remote learning have caused. Students on average will
likely lose nine months of learning by the end of the 2020-21 school
year, McKinsey & Company estimates, and students of color may well lose
a full year on average. With the requisite resources, schools can
lengthen school days and the school year and invest in high-quality
tutoring to help students--over the course of the next couple of
years--recover what they have lost. The costs of addressing all these
needs could easily top $100 billion over the next few years, based on
estimates from the Learning Policy Institute and McKinsey. Along with
the $123 billion, the Rescue Plan includes ``maintenance of equity''
provisions that require States to avert funding cuts to schools and
school districts with high numbers of poor children.
Transit
The Rescue Plan provides $30.4 billion to transit agencies,
primarily by formula grant, to support operating costs and thereby
prevent cuts in transit services and layoffs of transit workers.
Transit agencies are facing severe financial stress, as ridership
of buses and rail has declined during the pandemic, reducing revenues.
Yet public transportation is a lifeline for those without access to
cars who need to get to work, including essential workers and others
who are not able to work from home or who need to travel to fulfill
basic needs, like seeing the doctor or going to the grocery store.
Scaling back mass transit services and laying off transit workers not
only risks leaving millions of riders stranded, but also would leave
transit agencies poorly positioned to support a robust recovery as the
pandemic recedes.
The assistance provided by the Rescue Plan should prevent damaging
cuts, allow public transit to continue needed services, and respond
quickly as ridership increases with a stronger economy. Public
transportation is particularly important to low-income communities and
communities of color, even as decades of policy choices have left many
of these communities under-resourced and with poorer access to public
transit. While it is crucial that these communities be protected from
cuts in services, policymakers should also focus on designing further
investments in public transit so that they have the potential to
increase access to jobs and extend economic opportunity to underserved
communities. \1\
---------------------------------------------------------------------------
\1\ Chye-Ching and Roderick Taylor, ``Any Federal Infrastructure
Package Should Boost Investment in Low-Income Communities'', CBPP,
updated June 28, 2019, https://www.cbpp.org/research/federal-budget/
any-federal-infrastructure-package-should-boost-investment-in-low-
income.
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Our Underlying Policy Gaps Necessitated Large, Stopgap Measures
While the American Rescue Plan Act, along with the relief measures
of 2020, will provide substantial help to tens of millions of people
who are struggling to make ends meet and access health care during this
crisis, we should ask why such large-scale stopgap measures were needed
in the first place.
The reason is clear: COVID-19 and its economic fallout have exposed
glaring weaknesses in our economy and our public policies that leave
too many people unprotected in bad times and too many unable to fully
benefit in good times. Before the crisis began, our unemployment
insurance system was very weak; we were providing inadequate support
for the millions of Americans who struggle every day to pay rent, buy
food, and afford other basics; and 29 million people lacked health
coverage. We tolerate very high levels of poverty and hardship when
households fall on hard times, whether because of a recession or
another national crisis, or because, as often occurs, an employer goes
out of business or a family member is ill and can't work. The nation
would need fewer stopgap measures during hard times if we had stronger
permanent policies in place to help households and workers when they
need it.
Other wealthy nations do far more to invest in children, to support
workers and their households both when they are working for low pay and
when they are out of work, to assure more adequate minimum wages, and
to ensure that everyone can access health care. The United States can
afford these kinds of policies as well. Failure to make these kinds of
investments and policy changes has real costs, to individuals and the
nation as a whole. Research shows that poverty and the hardships that
come with it--housing instability, food insecurity, and high levels of
family stress that can become toxic to developing children--can have
negative long-term impacts on children's health, education, and
earnings. There are negative impacts on adults, as well, when they
don't have enough to eat, face eviction, and don't have access to
health care.
The Rescue Plan addresses many of these key policy gaps but only
temporarily, so much of our progress will reverse once its provisions
begin to expire--unless policymakers take steps to extend key
provisions and make longer-term investments in key areas. The Rescue
Plan also makes crystal clear that we can address the challenges of
poverty and hardship if we have the will do so.
Building a More Equitable Economy
The President and Congress will soon have a historic opportunity to
build toward an equitable recovery where all children can reach their
full potential, where workers in low-paid jobs and those with fewer job
prospects have the supports to help them meet their needs and get
ahead, and where everyone has access to affordable health coverage.
Achieving these goals requires attacking long-standing disparities in
our nation, deeply rooted in racism and discrimination, that have led
to starkly unequal opportunities and outcomes in education, employment,
health, and housing.
This spring and summer, policymakers will work on another
substantial legislative package, this one framed around the nation's
recovery. As we invest in infrastructure and take steps to address
climate change, we also must invest in an equitable recovery that
enables everyone to share in its benefits.
If policymakers don't take this opportunity to create a more
equitable recovery, and instead craft a legislative package focused
only on physical infrastructure and climate technology, future economic
growth may be somewhat higher than if no package were enacted at all,
but millions of households will see little benefit from that growth.
Most people working in low-paid jobs will continue to struggle to make
ends meet, those who lose their jobs will not have help to tide them
over, tens of millions of people will still lack health coverage, and
child poverty and its attendant hardships will remain high, robbing
children of the future they deserve.
Housing investments should be a key component of a recovery
package. First, housing vouchers should be expanded toward the goal of
ensuring that all households that need rental assistance can receive
it. Housing vouchers lower the likelihood that a low-income family
lives in crowded housing (by 52 percent) or is homeless (by 74 percent)
and reduce their frequency of moving (by 35 percent) \2\--important
steps for reducing school disruption and other harmful outcomes for
children. (See Figure 6.) But just 1 in 4 eligible households receive
any Federal rental assistance due to limited funding. Providing
vouchers to all eligible households would lift 9.3 million people above
the poverty line and cut the child poverty rate by one-third, according
to a recent Columbia University study. \3\ It also would narrow the gap
in poverty rates between white and Black households by over a third and
the gap between white and Latino households by nearly half.
---------------------------------------------------------------------------
\2\ Michele Wood, Jennifer Turnham, and Gregory Mills, ``Housing
Affordability and Family Well-Being: Results From the Housing Voucher
Evaluation'', Housing Policy Debate, Vol. 19, No. 2, January 2008, pp.
367-412.
\3\ Sophie Collyer et al., ``Housing Vouchers and Tax Credits:
Pairing the Proposals to Transform Section 8 with Expansions to the
EITC and Child Tax Credit Could Cut the National Poverty Rate by
Half'', Columbia University Center on Poverty and Social Policy,
October 7, 2020.
---------------------------------------------------------------------------
As the economy recovers, high housing costs will continue to create
economic instability and hardship for millions of low-income renters,
increasing their risks of housing instability and homelessness and
undercutting their children's chances of succeeding over the long term.
Housing vouchers make rent affordable for people in low-paying jobs and
are highly effective at reducing homelessness. They also serve as an
important hedge against housing instability and financial hardship
during recessions because the voucher subsidy rises when a household's
income falls due to a lost job or work hours.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Investments in renovating and building affordable housing also have
an important role to play, particularly in tight housing markets.
Carefully designed investments of this type can make rents more
affordable for low-income households, reduce homelessness, improve
residents' living conditions and health outcomes, and reduce racial
inequities in housing opportunities and housing quality. They also
generate jobs and construction activity and can lower greenhouse-gas
emissions by making developments more energy efficient. In making such
investments, policymakers should place a high priority on renovating
the existing public housing stock, creating housing options for people
experiencing homelessness, and providing substantial additional
resources for affordable housing development through the Indian Housing
Block Grant and National Housing Trust Fund.
However, supply interventions alone will not address the affordable
housing crisis. Many communities have ample supply of housing but
housing remains unaffordable for people with modest incomes.
Additionally, supply interventions often do not produce housing with
rents that are low enough to be affordable for households with incomes
near or below the poverty line--the group that makes up most of the
renters confronting severe housing affordability challenges \4\--unless
those households also receive a voucher or similar rental assistance.
Voucher expansion is therefore crucial to ensuring that a recovery
package reaches those who most need help to afford stable housing.
---------------------------------------------------------------------------
\4\ Seventy-four percent of renter households that paid more than
half their income for housing in 2018 had ``extremely low-incomes,''
defined as incomes below the higher of the Federal poverty line or 30
percent of the local median income. (CBPP analysis of 2018 American
Community Survey and 2018 HUD income limit data.)
---------------------------------------------------------------------------
Beyond housing, there are other key investments the nation needs to
make to build toward an equitable recovery. These include:
Help for people in low-paid jobs and people out of work.
Workers in low-paid jobs struggle to make ends meet, face high
child care costs, and often receive no help from unemployment
insurance when they lose a job. The recovery package can take
important steps to help these workers, including by shoring up
our unemployment insurance system so more jobless workers are
covered and benefits are more adequate; expanding access to
high-quality, affordable child care; making the Rescue Plan's
EITC expansion for low-paid workers without children permanent;
creating a paid leave program so workers can afford to take
time off for health issues or caregiving responsibilities; and
investing in job training and subsidized jobs to help people
succeed in the labor market and have opportunities to work.
Key investments for children. There is strong evidence that
poverty, and the hardships that come with it, shortchange
children's long-term health and education outcomes, and that
investments in children can improve their trajectories
markedly. These include investments such as making the Rescue
Plan's Child Tax Credit expansion permanent, strengthening
nutrition programs, and investing in high quality child care
and early education.
Expanded access to health coverage. The United States can
get far closer to universal health coverage by making
marketplace coverage more affordable, allowing more people to
purchase marketplace coverage when employer coverage isn't
affordable, and strengthening Medicaid coverage and ensuring
that individuals are able to keep their coverage for a full
year.
The United States can afford to make these investments. After two
decades of tax cuts, we should start by rebuilding our tax code so that
the wealthiest households and large, profitable corporations contribute
in a fair way while also rebuilding the IRS so that the taxes owed are
collected. This would raise substantial revenue and help fund critical
investments that promote broadly shared economic growth, broaden
opportunity, and improve well-being among those not already well-
heeled.
Conclusion
Over the last year, the President and Congress took bold action,
culminating in this year's American Rescue Plan Act, to help tens of
millions of individuals and families that were struggling in the midst
of COVID-19 and its economic fallout. The legislation and its likely
impact show that we know how to reduce poverty and hardship and how to
narrow economic and racial inequities.
But, like the CARES Act and Families First Act of last spring and
the relief package of December, the Rescue Plan Act provides only
temporary relief. The progress we will make under it in helping workers
and their families, in reducing poverty and hardship, in narrowing
economic and racial inequities, and in expanding access to health care
will largely unravel as its provisions expire.
As the President and Congress turn to economic recovery legislation
this spring and summer, however, they have a historic opportunity to
make permanent progress by addressing the underlying weaknesses in our
economy and our public policies that made the stopgap measures of the
last year so necessary.
______
PREPARED STATEMENT OF AMY K. MATSUI
Director of Income Security and Senior Counsel, National Women's Law
Center
March 25, 2021
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______
PREPARED STATEMENT OF RORY COOPER
Public School Parent, Fairfax County, Virginia
March 25, 2021
Chairman Brown, Ranking Member Toomey, and Members of this
distinguished Committee; thank for you for this opportunity to speak
for what I believe are millions of parents. I have three kids currently
in 5th grade, 2nd grade and Kindergarten. I love them very much. (I
wanted that in the congressional record.) My children and millions of
other children have not had access to the education they deserve for
over a year.
First, it's important to point out that a majority of students are
indeed attending school in-person five days a week. President Biden's
goal of having a majority of schools open to some degree in his first
100 days is incomprehensible. It was achieved before he took office.
Two thirds of public-school districts are currently open five days
a week. Many of them have done so since the fall. Private schools are
offering the same, often a block away from a shuttered public school.
The districts that are failing our children are the large metropolitan
areas where school boards are heavily controlled by powerful teacher
unions, like New York, Chicago, San Francisco, Los Angeles and
Washington, D.C.
We know schools are safe because not one person is calling on these
open schools to close.
Here in Fairfax County, unreasonable union demands coupled with a
flat-footed superintendent and school board have crippled what was once
a premier district. The goalposts keep moving as they run out the clock
on this school year and leave students behind.
We were told that teachers needed to vaccinated first. So, Virginia
put them at the front of the line with healthcare workers and seniors
over the age of 65. And then when all willing teachers in Fairfax were
vaccinated, they said they would still not fully reopen.
Then we were told they needed more money. The school districts that
are currently closed are some of the best funded in the nation. Fairfax
County is in the top ten. And schools that are closed have saved
millions of dollars this year, while open schools have lost money.
Fairfax County is in fact under Federal investigation for opening their
doors to programs that paid them additional cash while keeping their
own special needs students locked out.
But America rallied to give them more money anyway. In the CARES
Act, Congress appropriated $13.2 billion for K-12 COVID mitigation. In
December, Congress appropriated an additional $54.3 billion. Despite
most of that money remaining unspent in 2021, this Congress pursued an
additional $126 billion in the American Rescue Plan. Nearly none of it
to be spent in 2021. Most of this $193 billion will be spent years
after the crisis is over.
All of this money is distributed using Title I formulas. This means
that Congress is rewarding large well-funded districts that remain
closed with a huge payout while smaller less well-funded districts who
provide in-person instruction receive less.
The latest goal post movement has come around the issue of 6-foot
distancing. We knew this was overcautious in 2020 because as I
mentioned, a majority of school districts were already successfully
ignoring it. But districts like Fairfax used it as a crutch to only
consider hybrid learning two days a week.
The CDC finally admitted what they already knew and recently
reduced it to 3 feet. Randi Weingarten of the American Federation of
Teachers said that still was not good enough and they wanted even more
money. No science or vaccination or amount of money will ever be good
enough. Kids just have to suffer so unions can thrive.
And the kids are suffering greatly. We've seen a terrible spike in
suicides, depression, anxiety and a loss of access to nutrition,
socialization and physical health. Children with physical and learning
disabilities who require additional support have received a minimum of
what the law compels schools to offer. So many students are falling
behind and failing that Fairfax County eliminated failing grades
altogether. These are the outcomes of the union efforts.
My children have had three-day weekends for a year. On Mondays in
Fairfax, kids do an hour of homework in the morning and Fairfax counts
it as a day of school so they can pretend they're meeting obligations.
Finally, as of a week ago, my kids are now in-person two days a week.
They are elated on Tuesdays and Wednesdays and dejected on Thursdays
and Fridays.
They're actually lucky. Their wonderful teachers returned to the
classroom. Many children are in schools but still being taught on
laptops and monitored by untrained high school graduates.
Students are leaving public schools altogether. Fairfax County has
lost over 10,000 students with more fleeing to parochial and private
options. Inequality is skyrocketing and our most vulnerable populations
are getting hit the hardest.
I supported school closures in the spring of 2020 because we had
very little information. But since then, the data has been vast and
clear: Schools are safe. Public health, pediatric and psychological
experts have nearly unanimously agreed that school closures are a
crisis in their own right and need to end.
It's time for science and common sense to prevail. And let's not
wait another day. The fall is not a goal worthy of this country. It's
just an excuse for districts like Fairfax to keep falling behind.
We keep hearing we need more money and more time when schools have
had plenty of both. If public school systems like Fairfax can simply
choose to not offer in-person instruction, perhaps all of these
billions of dollars should go to students instead so they can have
access better choices.
Thank you, I look forward to your questions.
______
PREPARED STATEMENT OF ANGELA RACHIDI
Rowe Scholar, American Enterprise Institute
March 25, 2021
Chairman Brown, Ranking Member Toomey, and Members of the
Committee. Thank you for the opportunity to testify on the important
issue of helping American families emerge strong from the economic
hardships of the pandemic. My name is Angela Rachidi and I am the Rowe
Scholar in poverty studies at the American Enterprise Institute, where
I have spent the past several years researching policies aimed at
reducing poverty, increasing employment, and charting pathways to a
better life for low-income families. Before I joined AEI, I also served
as a Deputy Commissioner for the New York City Department of Social
Services, where I evaluated safety net programs for low-income New
Yorkers and studied how families experience them.
My testimony covers three main points. First, statistics on poverty
and income show that poverty had already fallen below prepandemic rates
in the months leading up to the passage of President Biden's American
Rescue Plan, which suggests the additional safety net program
expansions included in the American Rescue Plan were excessive and
poorly targeted to pandemic-related problems. Second, the safety net
program expansions included in the American Rescue Plan undermine the
successful antipoverty policies of the past quarter century by
discouraging work and increasing the likelihood of single parenthood.
If made permanent, these policies will make it harder for families to
escape poverty and move up the income ladder, while slowing the
economic recovery. Third, proponents of the American Rescue Plan have
overstated the positive effects of this legislation while understating
the true cost. We will see efforts in the coming months to show that
this legislation reduced poverty and increased employment--which I have
no doubt the short-term data will show. However, these short term gains
will mask long-term negative consequences that will be difficult to
reverse--such as reduced labor force participation, more children born
to single parents, and entrenched poverty for more Americans.
Getting the Context Right
The pandemic that hit in March 2020 was unprecedented and the
employment disruptions that followed caused a great deal of hardship
for many families. Congress acted swiftly and comprehensively by
passing three major pieces of legislation to address the public health
crisis and resulting economic fallout--the Families First Act and the
CARES Act in March 2020, followed by the Consolidated Appropriations
Act in December 2020--totaling $3.5 trillion in Federal pandemic-
related spending over the past year. \1\ These packages included
tremendous supports for workers and families who faced economic
hardships because of the pandemic, including expansions to food
assistance, unemployment compensation, housing assistance, and direct
payments from the Federal Government, among other things.
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\1\ ``Here's Everything the Federal Government Has Done to Respond
to the Coronavirus So Far'', Peter G. Peterson Foundation, March 15,
2021. https://www.pgpf.org/blog/2021/03/heres-everything-congress-has-
done-to-respond-to-the-coronavirus-so-far.
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As a result, the poverty rate before Congress passed the American
Rescue Plan, when properly measured, was even lower than it was before
the pandemic. Using a supplemental poverty measure from researchers at
Columbia University, which accounts for many important Government
benefits that are left out by official poverty measure, the poverty
rate in January 2021 (after the December 2020 economic relief package
and before the American Rescue Plan) was almost 3 percentage points
lower than it was in January 2020. \2\ Even income poverty measures,
which fail to account for Government benefits like nutrition
assistance, show stable poverty trends over the past year. \3\
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\2\ Zachary Parolin and Megan Currie, ``Monthly poverty rate
declines to 13.2 percent in the United States in January 2021'',
Columbia University Center on Poverty and Social Policy, https://
static1.squarespace.com/static/5743308460b5e922a25a6dc7/t/
604278f5209e047195f32808/1614969077778/Monthly-Poverty-Factsheet-Jan-
2021-CPSP.pdf.
\3\ Jeehoon Han, Bruce Meyer, and James Sullivan, ``Real-time
Poverty Estimates During the COVID-19 Pandemic Through February 2021'',
Wilson Sheehan Lab for Economic Opportunities at the University of
Notre Dame and University of Chicago Harris School of Public Policy,
March 18, 2021. http://povertymeasurement.org/wp-content/uploads/2021/
03/Monthly-poverty-rates-updated-thru-Feb-2021-v4.pdf.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
These trends show that Government relief efforts effectively
prevented spikes in poverty and shielded vulnerable families from
hardship in the months following the start of the pandemic. Additional
research shows that households higher up the income distribution even
experienced aggregate income increases in the months following the
pandemic, largely due to Government relief efforts such as expanded
unemployment insurance. \5\ Government economic relief efforts helped
many families weather the economic fallout of the pandemic well through
February 2021. This begs the question of why Congress passed such a
large ``rescue'' package in recent weeks.
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\4\ Parolin and Curran, ``Monthly poverty rate declines to 13.2
percent in the Unites States in January 2021.''
\5\ Natalie Cox, et al., ``Initial Impacts of the Pandemic on
Consumer Behavior: Evidence From the Linked Income, Spending, and
Savings Data'', Brooking Institution, Brookings Papers on Economic
Activity, June 25, 2020. https://www.brookings.edu/wp-content/uploads/
2020/06/Cox-et-al-conference-draft-Final.pdf.
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The American Rescue Plan
As you know, the American Rescue Plan totaled $1.9 trillion and
included many spending provisions aimed at low-income families. Given
the context of the data that I just described, these spending programs
have very little to do with the pandemic. Instead, they expand Federal
Government spending in ways that are excessive and undermine the
successful antipoverty policies of the past quarter century by
weakening the connection between the safety net and employment. We have
learned over the past 25 years that employment offers the best path out
of poverty and our safety net policies are most effective when they
support rather than supplant earnings.
I want to highlight three specific provisions in the American
Rescue Plan that I believe have the greatest potential to make economic
opportunity harder for families: expansions to the Child Tax Credit,
increases in the Supplemental Nutrition Assistance Program (SNAP), and
unemployment insurance extensions.
The Child Tax Credit. The American Rescue Plan increased the amount
of the Child Tax Credit (CTC) from $2,000 per child to $3,600 for
children under age 6 and $3,000 for older children, paid out in regular
installments. The American Rescue Plan also extended the full credit to
families without any employment in the household. Before, the credit
phased in as families started earning income, ensuring the benefit was
linked to work.
Expanding the CTC to nonworking families risks reducing employment
and impeding the path out of poverty for too many families, especially
for the most vulnerable--such as single mothers. Economic theory
suggests that cash payments from the Government will decrease
employment because they substitute work income, and the literature
shows that this risk is real. My colleague at AEI, Scott Winship,
recently summarized this literature, highlighting the need for caution
when expanding Government benefits in ways that undermine employment.
\6\ Without work, families will spend more time in poverty and face
fewer options to become self-reliant and move up the income ladder.
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\6\ Scott Winship, ``The Conservative Case Against a Child
Allowance'', American Enterprise Institute, March 5, 2021. https://
www.aei.org/wp-content/uploads/2021/03/The-conservative-case-against-
child-allowances.pdf?x91208.
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I experienced this first-hand after spending much of my career
working for the New York City Department of Social Services.
Unrestricted Government cash payments proved to be a poor substitute
for employment after the welfare reforms of the 1990s. When Government
assistance became time limited and connected to work, employment
increased and poverty declined in New York and across the country. \7\
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\7\ Angela Rachidi, ``Welfare reform cut child poverty in half.
What will President Biden's American Rescue Plan do?'', American
Enterprise Institute, AEIdeas, March 12, 2021.
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My other concern about expanding the CTC to nonworking families is
that it will sever the ties that these families have to job training
and other critical supports through existing programs, such as the
Temporary Assistance for Needy Families (TANF), and will make it less
likely that low-income single mothers will access the Child Support
Enforcement program. \8\ TANF provides cash assistance, job search
assistance, and job training to participating parents, while child
support engages noncustodial parents, secures financial support for
children, and results in financial and emotional benefits for children.
If cash assistance through TANF becomes less necessary, nonworking
parents will have less access to important supports that help them
enter the labor market and less access to support from the other
parent.
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\8\ Angela Rachidi, ``The Unintended Downsides of Child Allowance
Proposals'', The Dispatch, February 25, 2021. https://thedispatch.com/
p/the-unintended-downside-of-childhood.
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The experience of welfare reform also teaches us that unrestricted
cash payments from the Government, like the expanded CTC, make single
parenthood more likely. A review of the literature on the relationship
between the Government assistance and fertility found that unrestricted
cash payments increased single parenthood and reduced marriage,
although the size of the effects in some cases were small. \9\ The
American Rescue Plan returns us to this system. Further, the plan also
undermines marriage by providing the full CTC to all low-income
families and tripling the childless earned income tax credit (EITC),
thus worsening the marriage penalties built into the existing EITC.
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\9\ Robert Moffitt, ``The Temporary Assistance for Needy Families
Program'', in Means-Tested Transfer Programs in the United States,
2003.
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Supplemental Nutrition Assistance Program (SNAP). Prior to the
American Rescue Plan, Congress had already authorized substantial
expansions to the Supplemental Nutrition Assistance Program (SNAP) that
addressed the food needs of low-income households. All States received
authorization to issue ``emergency allotments'' through at least this
month, which increased average benefits by approximately 40 percent for
a total obligated amount for Fiscal Year 2020 (ending September 30,
2020) of $95.4 billion. This was before Congress authorized an across-
the-board 15 percent increase in maximum SNAP benefits in the December
2020 relief package, which Congress extended until September 2021 in
the American Rescue Plan. As long as a Federal or State public health
emergency remains in effect, SNAP households will receive the maximum
benefit plus 15 percent, no matter their income.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
I have two concerns with these SNAP expansions. First, the American
Rescue Plan poorly target households that have reported food problems.
Second, the SNAP expansions in this package further undermine
employment by worsening work disincentives, which will slow the
economic recovery and increase the chances that families will remain
poor.
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\10\ U.S. Department of Agriculture, Food and Nutrition Service,
``Supplemental Nutrition Assistance Program (SNAP) Fiscal Year (FY)
2021 Maximum Allotments and Deductions'', January 1, 2021. https://fns-
prod.azureedge.net/sites/default/files/media/file/FY21-COVID%20ARPA-
Maximum-Allotments-Deductions.pdf.
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My colleague Scott Winship and I found last fall that early reports
suggesting doubling and tripling rates of food hardship were
exaggerated, and that food access problems among households following
the pandemic were only slightly elevated. \11\ Given this context,
expansions to SNAP through the American Rescue Plan have not been
justified, and they risk reducing employment for many households,
ultimately slowing the economic recovery by making work less important
for some households.
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\11\ Scott Winship and Angela Rachidi, ``Has Hunger Swelled'',
American Enterprise Institute, October 22, 2020. https://www.aei.org/
research-products/report/has-hunger-swelled/; and Lauren Bauer, ``The
COVID-19 crisis has already left too many children hungry in America,''
Brookings Institution, May 6, 2020. https://www.brookings.edu/blog/up-
front/2020/05/06/the-covid-19-crisis-has-already-left-too-many-
children-hungry-in-america/
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The SNAP increases also poorly target the households who have
reported problems affording food during the pandemic. According to the
COVID Impact Survey, the vast majority of people who reported not
having enough food are not SNAP recipients. \12\ This suggests that
efforts to increase the size and scope of SNAP have little to do with
addressing food problems caused by the pandemic and more to do with
increasing the footprint of the Federal Government. Research shows that
SNAP reduces employment, suggesting that efforts to extend it to a
larger share of US households will undermine economic recovery efforts.
\13\
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\12\ Angela Rachidi, ``Food Insufficiency Rates Remain Stable
Despite Reduced Federal Assistance'', American Enterprise Institute,
AEIdeas, September 10, 2020, https://www.aei.org/poverty-studies/food-
insufficiency-rates-remain-stable-despite-reduced-federal-assistance/.
\13\ Hilary Hoynes and Diane Schazenbach, ``Work Incentives and
the Food Stamp Program'', Journal of Public Economics 96, no. 1-2
(2012): 151-162.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Unemployment Insurance. Most economists believe that generous
unemployment benefits reduce exits from unemployment, although they
debate the precise size of the effect. \15\ In a recent paper,
economists from the University of Chicago found that the disincentive
effects of unemployment compensation expansions shortly after the
pandemic were less than expected, \16\ leading some commentators to
suggest that generous pandemic-related unemployment benefits will not
affect employment. However, these findings came during a time when job
vacancies were extremely low and there was a great deal of uncertainty
around the public health crisis. With the employment situation
improving rapidly and the public health situation becoming clearer due
to the vaccines, the American Rescue Plan still extended Federal
unemployment benefits through September 2021. This will likely
influence behavior around job seeking and slow the economic recovery.
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\14\ Rachidi, ``Food Insufficiency Rates Remain Stable Despite
Reduced Federal Assistance''.
\15\ See Bruce Meyer and Wallace Mok, ``A Short Review of Recent
Evidence on the Disincentive Effects of Unemployment Insurance and New
Evidence from New York State'', National Tax Journal, March 2014,
https://harris.uchicago.edu/files/shortreview.pdf.
\16\ Peter Ganong, et al. ``Spending and Job Search Impacts of
Expanded Unemployment Benefits: Evidence from Administrative Micro
Data'', BFI Working Paper, February 10, 2021, https://bfi.uchicago.edu/
working-paper/spending-and-job-search-impacts-of-expanded-ui/.
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Childcare, School Closings and Maternal Labor Force Participation.
The economic recovery will also suffer if labor force participation
among mothers does not rebound fully. Analysis from the Minneapolis
Federal Reserve shows that the labor force participation among fathers
and mothers declined in the immediate aftermath of the pandemic, but
mothers have been slower to reenter the labor force. \17\ This is
because the caretaking responsibilities associated with closed or
partially closed schools, along with fears over sending young children
to childcare centers, has disproportionately fallen on mothers. \18\
These labor force participation declines are especially acute for
mothers without a college degree, suggesting that low-income mothers
are at particular risk for long-term employment challenges.
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\17\ Tyler Boesch, et al., ``Pandemic Pushes Mothers of Young
Children Out of the Labor Force'', Minneapolis Federal Reserve,
February 2, 2021, https://www.minneapolisfed.org/article/2021/pandemic-
pushes-mothers-of-young-children-out-of-the-labor-force.
\18\ Misty Heggeness, ``Why Is Mommy So Stressed? Estimating the
Immediate Impact of the COVID-19 Shock on Parental Attachment to the
Labor Market and the Double Bind of Mothers'', Minneapolis Federal
Reserve, October 2020, https://www.minneapolisfed.org/research/
institute-working-papers/why-is-mommy-so-stressed-estimating-the-
immediate-impact-of-the-covid-19-shock-on-parental-attachment-to-the-
labor-market-and-the-double-bind-of-mothers.
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I can personally attest to the substantial difficulties for
families and children when schools fail to open for in-person learning.
In fact, I am speaking to you from Morocco (my husband's native
country) after relocating my family from the US so that my four
children can attend school in person. Until January of this year, my
three oldest were attending public school virtually and like so many
children, they struggled with virtual learning and lost seven months of
critical learning time. My children struggled even though they had two
parents at home to offer guidance and supervision. Many low-income
children do not have the same supports and they have suffered the most
from learning and socialization loss. It is a tragedy that after a full
year so many children in the U.S. still do not have access to full-time
in-person school. It remains crucial that schools open fully for in-
person learning and I urge Congress to do whatever is in your power to
make that a reality.
Impacts of the American Rescue Plan on Poverty
Turning to my last point, proponents of the American Rescue Plan
overstate the projected impacts of its provisions on poverty, using it
as a justification for further Government expansions. Meanwhile, the
poverty rates after the December 2020 relief package were already below
prepandemic rates. Estimates suggest that the American Rescue Plan as a
whole will reduce child poverty by approximately one-half, and because
a disproportionate share of children in poverty are Black and Hispanic,
the poverty-reducing aspects of the legislation will disproportionately
benefit them. \19\ However, it is important to distinguish short-term
and long-term poverty effects and consider whether the American Rescue
Plan will offer children long-term security against poverty.
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\19\ Laura Wheaton, et al., ``2021 Poverty Projections: Assessing
Four American Rescue Plan Policies'', Urban Institute, March 2021,
https://www.urban.org/sites/default/files/publication/103794/2021-
poverty-projections-assessing-four-american-rescue-plan-policies-0-
0.pdf; Zachary Parolin, et al., ``The Potential Poverty Reduction
Effect of the American Rescue Plan'', Columbia Center on Poverty and
Social Policy, March 11, 2021. https://static1.squarespace.com/static/
5743308460b5e922a25a6dc7/t/604aa2465cfc4a35b8a1c236/1615503943944/
Poverty-Reduction-Analysis-American-Rescue-Plan-CPSP-2021.pdf.
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Most of the poverty-reducing aspects of the American Rescue Plan
come from the one-time stimulus payments, not from the expanded CTC or
other safety net expansions. Thus, making the safety net program
expansions in this package permanent would have only a small effect on
short-term child poverty, while discouraging employment and making it
harder to for parents to form intact families. Discouraging employment
will mean more low-income people out of the labor market for longer,
which can lead to skill atrophy, making it harder for people to reenter
the labor market eventually. This will have long-term negative impacts
on poverty rates, and will make a strong economic recovery harder.
Even more concerning is that these program expansions directly
contradict the policies that have successfully led to child poverty
reductions over the past quarter century. The often-cited National
Academies of Sciences Roadmap to Reducing Child Poverty concluded that
poverty reduced by almost one-half because of policy changes that
expanded the EITC and conditioned Government assistance on employment
in the 1990s. \20\ According to the report, the child poverty rate was
28 percent in 1993; by 2016 it was 15.6 percent--a 44 percent
reduction.
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\20\ Angela Rachidi, ``Welfare Reform Cut Child Poverty in Half.
What Will President Biden's American Rescue Plan do?'' American
Enterprise Institute, AEIdeas, March 12, 2021. https://www.aei.org/
poverty-studies/welfare-reform-cut-child-poverty-in-half-what-will-
president-bidens-american-rescue-plan-do/
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
These historic poverty reductions have disproportionately
benefitted Black and Hispanic children. The gap in poverty rates
between Black and White children, and Hispanic and White children has
narrowed substantially since the welfare reforms of the 1990s,
benefitting millions of children. Changes enacted by the American
Rescue Plan risk reversing this progress and returning us to high
poverty rates of the past.
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\21\ National Academies of Sciences, Engineering, and Medicine
2019, ``A Roadmap To Reducing Child Poverty'', Washington, DC: The
National Academies Press. https://doi.org/10.17226/25246
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Conclusion
We know how to cut poverty in this country. Policies that support
employment and intact families have successfully reduced child poverty
in the US by one-half since the welfare reforms of the 1990s. The
American Rescue Plan reverses those policies by expanding unconditional
cash payments to nonworking families, jeopardizing the policy successes
over the past 30 years.
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\22\ Angela Rachidi, ``The Child Poverty Gap by Race and Ethnicity
Has Shrunk in the U.S.'', American Enterprise Institute, February 4,
2020. https://www.aei.org/poverty-studies/the-child-poverty-gap-by-
race-and-ethnicity-has-shrunk-in-the-us/.
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Thank you for the opportunity to comment and I look forward to
taking your questions.