President Joe Biden and Democratic Congress take a major step to address poverty

The American Rescue Plan, passed by Congress and signed into law by President Joe Biden, reflects a dramatic shift in the role of the federal government in combating poverty.

Among the many provisions of the law, the act will make the full Child Tax Credit available to 27 million children in families with low or no income, increase the size of the Child Tax Credit and provide an expanded Earned Income Tax Credit for many low-paid adults without minor children at home. The result is that parents of children under age 17 will receive checks of as much as $300 a month. It is estimated that this will cut child poverty in half and significantly lessen poverty in the United States. The Act also will expand food and health care benefits, further reducing the effects of poverty.

The act thus reflects the view that the government has the duty to combat poverty and ensure that children are living in homes with adequate income. This is quite different from how government assistance has traditionally been viewed. From its inception, programs were meant to benefit only “the deserving poor,” the disabled who couldn’t work or families with dependent children with only one parent in the home. The Reagan presidency, which sought to significantly reduce the role of the government, drastically cut these programs and any semblance of a social safety net.

Subsequent Democratic presidents imposed further cuts. In 1996, President Bill Clinton, in anticipation of his reelection campaign, signed legislation that imposed draconian restrictions on benefits, including imposing work requirements and a five-year limit on the duration of welfare benefits.

The approach of the American Rescue Plan is radically different: It is about ensuring financial support for every child who needs it. Actually, this is not a new concept and has historically been supported by both Democrats and Republicans.

In 1968, five renowned economists — John Kenneth Galbraith, Harold Watts, James Tobin, Paul Samuelson and Robert Lampman — wrote an open letter to Congress that appeared on the front page of the New York Times. They urged the creation of a federal guaranteed annual income, writing: “The country will not have met its responsibility until everyone in the nation is assured an income no less than the officially recognized definition of poverty.” They said that the costs would be “substantial, but well within the nation’s economic and fiscal capacity.”

In 1969, President Richard Nixon, no liberal, was on the verge of creating a guaranteed income for all poor families. It would have guaranteed a family of four $1,600 a year. Nixon later urged the creation of a guaranteed annual income through a negative income tax, something originally proposed by conservative economist Milton Friedman a number of years earlier.

Unsurprisingly, there was support among liberals. In 1967, Martin Luther King Jr. said, “The solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.” In 1972, Democratic presidential candidate George McGovern advocated this.

I always believed that had the Warren Court continued (it ended in 1969 with the retirement of Chief Justice Earl Warren), it would have found a constitutional right for every child to be guaranteed a quality education and for every person to have the food, shelter and medical care needed for survival. But it did not happen. Social attitudes turned sharply against the government and its programs.

It is in this context that the American Rescue Plan and its efforts to alleviate poverty are major shifts in the conception of the government responsibility to deal with poverty. The racial dimension of this should not be overlooked. Twenty-four percent of African-Americans and 21% of Latinos live below the poverty level, as compared with 9% of whites. Forty percent of African American children live in poverty — a Black child born today has a 4 in 10 chance of being born into an impoverished family — as compared with 14% of white children.

The American Rescue Plan has stunning widespread support. Opinion polls show that 75% of Americans are in favor of it, including 60% of Republicans, even though no Republican in Congress voted for it.

Of course, no single law can solve the problems of poverty or the gross economic disparities that exist in the United States. And these changes are only for a year at this point. But the American Rescue Plan is a huge step forward to dealing with the serious problem of poverty in this country.

This story was originally published March 16, 2021 at 5:30 AM.