Another 8 Million Americans Are Now in Poverty Because Congress Couldn’t Get Its Act Together

The rise in poverty was triggered by a lack of new stimulus checks and the end of the $600 weekly unemployment benefit, researchers at Columbia University said.
October 15, 2020, 5:15pm
Boxes of supplies to be distributed at the Hope Rescue Mission in Reading, PA Thursday morning August 27, 2020.
Boxes of supplies to be distributed at the Hope Rescue Mission in Reading, PA Thursday morning August 27, 2020. (Photo: Ben Hasty/MediaNews Group/Reading Eagle via Getty Images)

About 8 million Americans have fallen into poverty since May, largely due to the federal government’s inability to agree on a plan to dole out new stimulus checks and unemployment benefits to suffering workers, according to researchers at Columbia University. 

The bipartisan CARES Act, a $2 trillion relief package signed in March just as the COVID-19 pandemic was beginning to shred the economy, held millions back from destitution at first, according to Zach Parolin, a researcher at the university’s Center on Poverty and Social Policy and lead author of the working paper published Thursday. The legislation, among other provisions, brought one-time $1,200 stimulus checks to immediately boost struggling households and $600-a-week supplemental unemployment benefits to pad the meager checks out-of-work Americans typically received pre-pandemic.

But, when the CARES Act benefits began to expire, it unleashed a swell of poverty that hit Black and Hispanic households hardest. And legislators, wrapped up in partisan rancor about what all should be included in the next stimulus package, haven’t stepped in to solve the problem.

“The congressional action in March was, despite its flaws, hugely successful in reducing levels of poverty,” Parolin said. “Now those benefits are gone, and the poverty rates have increased. And in our report, we can attribute the rise in poverty directly to the expiration of those benefits, the expiration of that $600-a-week unemployment supplement as well as the absence of a stimulus check.”

While the possibility of a second stimulus check has been floated in the halls of Congress and the White House for months, recent efforts to deliver any real relief to Americans have failed. In the past 10 days alone, President Donald Trump has both called off aid negotiations until after the November 3 election and demanded immediate standalone bills for stimulus checks, plus relief for small businesses and airlines.

The extra $600 weekly unemployment benefit, meanwhile, expired at the end of July. The Trump administration initiated temporary $300-a-week checks for some workers in the meantime, but the subsidy was limited and has since expired in several states. 

Between May and September, the monthly poverty rate rose from 14.3% to 16.7%, according to the research published Thursday. And, Parolin said, that could grow worse still, especially if unemployment rates don’t improve and there's no extra relief from the federal government. Stuck in the middle are the households that, absent any help, are growing poorer and poorer each month, he said.

Separately, researchers at the University of Chicago and Notre Dame have found that 6 million more people became impoverished in the last three months, according to the New York Times, which first reported on the findings of both studies.

“It’s quite simple: What’s needed now to reduce the number of people in poverty and to prevent subsequent increases in poverty is some kind of new stimulus bill or CARES Act 2.0,” Parolin said.

“It’s a type of hardship that doesn’t need to exist in a country that is this wealthy,” he added.

But, to Democratic and Republican leadership, it doesn’t look all that easy. House Democrats are sticking by a $2.2 trillion bill they passed earlier this month, which would restore the $600-a-week benefit and send out more stimulus checks, among other measures. While Trump indicated Thursday that he’d be willing to negotiate a relief package worth more than $1.8 trillion—the current threshold for any Republican relief package—his treasury secretary, Steven Mnuchin, said this week that agreeing to a bill before the election will be difficult. 

If Congress is unable to pass any bill before the end of the year, several CARES Act programs—plus a partial federal eviction moratorium—will expire on Dec. 31 at the height of the holiday season, leaving more than half of the 13.4 million people currently receiving unemployment benefits without any income at all, according to Politico.