Following is a statement from Amy Hanauer, executive director of the Institute on Taxation and Economic Policy, regarding the American Rescue Plan, which passed in the U.S. House last week and is now before the U.S. Senate.
“The House-passed American Rescue Plan is the down payment we need for an inclusive economic recovery, and the Senate should pass it without delay.
“We went into this pandemic with a deeply unequal economy, and we still have 10 million fewer jobs than we did a year ago, while billionaire wealth has grown sharply. The American Rescue Plan will get financial help to all communities, while rightly focusing on those who were most likely to be living paycheck-to-paycheck before the pandemic and who have borne the brunt of the economic and health fallout.
“Senators and representatives can look to recent history—the 2007-2009 recession—for lessons on how to best address the current economic crisis. If we do too little, the economy will stay weak much longer, hurting all of us.
“The last economic recovery was slow and exacerbated class and racial inequities. The fortunes of the very richest came roaring back and then some, while overall wages remained stagnant and median incomes took years to recover. Heading into this pandemic, median wealth for white households was 7.8 times more than for Black households. This was due to long-standing inequities, but recent economic policy made them even worse. The tax law that Trump and the Republicans pushed through in 2017 further exacerbated inequality, showering largesse primarily on corporations and the wealthiest, and spending $2 trillion in ways that didn’t improve our health, our climate, or most of our lives.
“The American Rescue Plan will help all of us but will target assistance toward those who’ve been most harmed. The $350 billion in aid to state and local governments will sustain public sector jobs. The $400 federal boost to weekly unemployment insurance benefits will help laid-off workers hold on until they land a job and avoid the downward spiral that follows job loss. A study by the Center on Poverty and Social Policy at Columbia University found that the unemployment, food and tax credit provisions in the plan—plus a higher minimum wage—would cut child poverty in half in 2021. That’s the power of strong public policy.
“ITEP’s own analysis of the plan’s cash and tax provisions finds that the poorest 20 percent would receive an average income boost of one-third. This kind of change can be transformative and build back better, as President Biden has vowed.”