This change, alone, would slash child poverty by an estimated 40 percent. But this change isn’t alone. The American Rescue Plan also triples the value of the earned-income tax credit for low-income workers without children, providing a benefit of roughly $1,500 to more than 17 million Americans and fixing a tax code that, as it stands, punishes childless workers in low-wage jobs.
Biden’s relief plan also includes a major expansion of the Affordable Care Act in the form of greater subsidies for Americans who purchase their health insurance on the marketplaces established by the law. This would, according to an Urban Institute estimate, reduce the number of uninsured people in the United States by more than four million.
The list of new policies goes on. There is money in the American Rescue Plan to expand food stamps, bolster state welfare programs, and increase federal support for child and dependent care. Put all this together and the bill is expected to reduce overall poverty by more than a third and child poverty by more than half. It is, with no exaggeration, the single most important piece of anti-poverty legislation since Lyndon B. Johnson’s Great Society, itself the signature program of a man who sought to emulate F.D.R.
I would even say that the American Rescue Plan compares favorably with the signature legislation of F.D.R.’s first 100 days, in that its $1.9 trillion price tag dwarfs the mere tens of billions (in inflation-adjusted dollars) spent by Congress during the earliest period of the New Deal. The challenge is very different — a Great Depression and its attendant unemployment and immiseration versus a health crisis and its economic impact — but the ambition is of similar scope.
Indeed, the story of this bill may be the story of how Biden has repudiated the austerity politics of much of the last decade, as well as the anti-assistance paradigm he himself helped forge when, as a senator, he warned in 1988 of “welfare mothers driving luxury cars” and voted, in 1996, to make so-called welfare reform a reality.
The American Rescue Plan is only a start. Because the administration was limited by the budget reconciliation process, many of its provisions need to be made permanent. Which is to say that there is still a lot of work left for the Biden administration and the Democratic majorities that exist, for now, in Congress, much of it tied to whether the Senate will reform itself to allow majority rule.
That said, we can and should acknowledge that this bill is, as Biden once said of Obamacare, a very big deal for the country. And we can marvel, at least a little, at the trajectory of his political career, as this consummate centrist and proud bipartisan dealmaker begins to move in somewhat unexpected directions.
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