The $1.9 trillion pandemic relief bill awaiting final passage in the House of Representatives would bring the United States in line with many other advanced democracies around the world by providing regular, unrestricted federal payments to families with children that would cut the rate of child poverty in half.
In all, 13.1 million children and adults would be lifted out of poverty, including 5.7 million under the age of 18, according to one analysis. It would be an historic byproduct of President Joe Biden's massive economic response to the COVID-19 pandemic and Democrats' pent-up demands for addressing income inequality in the U.S. through direct government action.
What remains to be seen is whether the change is temporary or signals a permanent adjustment to U.S. social policy.
An analysis by the Urban-Brookings Tax Policy Center found that the bill would increase the after-tax income of the poorest quintile of Americans by 20.1% and the second-lowest quintile by 9.3%. (Those figures include a one-time federal payment of $1,400 for most Americans as well as elements tailored to benefit families and the poor.)
An analysis by the Center on Poverty and Social Policy at Columbia University found that the bill would cut the overall poverty rate in the United States from 12.3% to 8.2%. The impact on children under 18 would be even more dramatic, dropping their poverty rate from 13.5% to 5.7%.
Supporters of more generous government benefits for low-income Americans struggled to find a parallel in U.S. history.
"It's a huge change," said Sarah Halpern-Meekin, a professor in the LaFollette School of Public Affairs and the Department of Human Development and Family Studies at the University of Wisconsin–Madison. She said the nearest historical comparison in terms of impact on society would be the Social Security Act of 1935, which set up a system of guaranteed income for most retirees in America.
In addition to direct stimulus payments and enhanced unemployment benefits, the American Rescue Plan Act of 2021 would create a refundable tax credit worth $3,600 per year for children under 6 years of age, and $3,000 for children between 6 and 18.
Beginning in July, the funds would be delivered in monthly payments, creating a predictable income stream for families. The bill would also expand existing tax credits to care for children and dependents.
A separate element of the bill, expanding federal benefits to low-income working households through a program known as the Earned Income Tax Credit, would further reduce poverty in the U.S.
Analysts say financial improvements can trigger other positive outcomes for struggling Americans and their families.
"With these kinds of increases in income there are concrete health benefits," said Halpern-Meekin, who is also affiliated with the Institute for Research on Poverty. "The family being less likely to experience material hardship and run short of what they need has a short-term effect on children's or infants' health outcomes, and those spill over into long term effects ... on health, school and employment outcomes."
While progressives celebrate the bill as a major victory, conservatives say they fear that providing regular, no-strings-attached income to parents will have unintended consequences that do more harm than good.
Scott Winship, the director of poverty studies at the American Enterprise Institute, released a research paper titled, "The Conservative Case Against Child Allowances" as lawmakers were debating the bill.
"Child allowances run a very real risk of encouraging more single parenthood and more no-worker families, both of which could worsen entrenched poverty in the long run — an overreliance on government transfers, poverty over longer stretches of childhood, intergenerational poverty, and geographically concentrated poverty," he wrote.
"And the concern is about not only material poverty but also the social poverty that comes from growing up in non-intact families or communities with limited social capital and a dearth of meaningful roles for members to fill."
Noting that the United States has already seen a significant decrease in child poverty in recent decades, Winship called on lawmakers to reject the bill and to instead continue with existing policies that, he said, have been proven to work.