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Poverty Is Expected To Rise After CARES Act Relief Expires

Food insecurity has doubled in the crisis and child hunger has risen even more, but Mitch McConnell has no plans to extend the relief the CARES Act brought.
Poverty Is Expected To Rise After CARES Act Relief Expires

The rise in poverty many economists projected as a result of the coronavirus pandemic has been largely avoided, capped by the relief bills passed in March, two new studies posit. But the one time payment of $1,200 per person was just one time, and the extra assistance in unemployment benefits, as well as their extension to contract and gig workers, ends at the end of July with no apparent intention on the part of Mitch McConnell and the Republican Senate to extend it.

Not everyone has avoided destitution, the studies point out, and many people have experienced food insecurity and homelessness in the long delays before assistance reached them. Others have been excluded because they don't qualify, particularly undocumented workers even if they have American children. But, says Zachary Parolin, with Columbia University's team forecasting this year's poverty rate, "Right now, the safety net is doing what it’s supposed to do for most families—helping them secure a minimally decent life. […] Given the magnitude of the employment loss, this is really remarkable." Prior to the crisis, they forecast poverty rising by 12.5% this year, and now they estimate it will be 12.7%. Just to say here, nearly 13% of the nation's population sinking to poverty levels is not a win by any estimation. And the only reason it's not worse is because of the CARES Act the House forced through in March.

Another study by Bruce D. Meyer and Jeehoon Han of the University of Chicago and James X. Sullivan of Notre Dame looked at Census Bureau survey data and found that incomes rose in low-income families, estimating that poverty in April and May fell from 10.9% in January and February to 8.6% in April and May. "When we initially saw our results, we thought, 'How could this be true?'" Sullivan said, referencing the crisis. "But when you look at the size of the government response, it makes sense." The extra unemployment payment of $600 a month and food programs have helped many significantly. The University of Chicago economists found that about two-thirds of the workers eligible for unemployment have been collecting sums that are greater than their usual earnings. The poorest fifth of them can at least double their lost pay, their analysis finds.

The problem is, that's going to end well before the economic crisis created by the pandemic is over and not everyone has been lifted. Diane Schanzenbach, an economist at Northwestern University, notes that food insecurity is twice its prepandemic rate and child hunger has risen even more. Diane Schanzenbach, an economist at Northwestern University, has found that food insecurity has doubled in the crisis and child hunger has risen even more. A large group of workers, many who've waited for assistance, don't have resources at all beyond their paychecks. "A lot of people aren’t seeing the money yet," Schanzenbach said. "I'm worried about Congress taking its foot off the gas." Christopher Wimer, one of the Columbia researchers, agrees. "What we’re doing has been largely successful, but families could find themselves in big trouble in the fall after it expires."

Right now, the HEROES Act, passed by the House on May 16th, languishes on Mitch McConnell's desk. It includes a 15% increase in SNAP food assistance, extends the additional unemployment bump of $600 and the inclusion of gig and contract workers and re-ups the $1,200 individual payments, uptimes o $6,000 per family. It also provides hazard pay and critical state and local funding—the bare minimum the Americans are going to need to get out of the coronavirus hole.

But it now seems to be convention GOP wisdom that the crisis is over, no matter how many people are hungry. No matter how many people are getting sick and dying. No matter how many more small businesses are failing because they got left out of the previous relief bills. Here's how that felt to Melody Bedico, a single mother in Seattle whose job as a calker at an airport hotel ended with the virus. She got no help for two months, and was eating just two meals a day so she could feed her child, a 12 year old daughter. "My whole body really ached with stress, from my head to my toes," she said. She fell three months behind on her mortgage. The eight weeks of back pay she finally received, $7,600, in addition to the ongoing pay and her stimulus as gotten her mostly out of the hole. But the bonus ends in a month and her income will drop to 40% of normal. "I’m worried I could lose my house," she said. And she's one of the more fortunate ones. Carlos Arciga, 53, was an apple picker in Yakima, Washington who got fired when he showed up to work with a fever. His unemployment claim was denied because he was fired. "I'm a guy who works all the time," Aciga said. He is getting food stamps and lives now with his parents. "I'm in a bad spot—I don't have a place, and I don't have any money," he said.

The Trump administration has been a massive failure in this crisis, but they don't own the crisis. The first stimulus bills should have been much, much larger, the direct payments continuing, and support for businesses t keep operating greater. That's a missed opportunity on the part of House and Senate Democrats, who largely drove the CARES Act. But the ongoing angst, the cliff we're about to go over, that's on Mitch McConnell and his Republicans.

Published with permission of Daily Kos

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