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Economic Policy Experts Praise Federal Pandemic Response at Hearing, Call on Congress to Enact Build Back Better Agenda

Washington, D.C. (September 22, 2021) — Today, the Select Subcommittee on the Coronavirus Crisis, chaired by Rep. James E. Clyburn, held a hearing to examine the economic progress made by pandemic relief programs, such as the American Rescue Plan (ARP), and the need to build on these provisions to reduce longstanding disparities exposed and exacerbated by the pandemic.

“The relief packages we enacted, culminating with the American Rescue Plan, have eased Americans’ financial hardships, reduced poverty, and supported a robust economic recovery. Recent Census Bureau data shows that the pandemic relief legislation, particularly the American Rescue Plan, helped millions of Americans pay their basic expenses and reduced the poverty rate even as the pandemic continued to wreak havoc on our economy,” said Chairman Clyburn. “The American Rescue Plan was designed as a temporary stopgap measure to rescue our economy from an unprecedented crisis. We must now extend many of its provisions and build on them to create a strong, sustainable and inclusive post-pandemic economy.”

Prior to the hearing, the Select Subcommittee released a staff memo showing that the ARP’s Direct Relief Payments contributed to a 17% decline in food insufficiency and a 19% drop in housing instability in the weeks following the ARP’s passage, and that these declines in hardship have been maintained many months after the relief payments were distributed.

Today’s hearing witnesses were Diane Whitmore Schanzenbach, Director of Northwestern University’s Institute for Policy Research; Rev. Dr. Starsky Wilson, President of the Children’s Defense Fund; Luke Shaefer, Associate Dean for Research and Policy at the University of Michigan Ford School of Public Policy; Indivar Dutta-Gupta, Co-Director of the Georgetown Center on Poverty & Inequality; and Douglas Holtz-Eakin, President of the American Action Forum.

Witnesses shared the following testimony during the hearing:

Congress’s Pandemic Relief Programs—Including the American Rescue Plan—Represented a Historically Successful Response to the Economic Crisis Caused by the Pandemic

  • Professor Shaefer testified that the impact of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the December Coronavirus relief measures, and the American Rescue Plan has been “truly historic, both in approach and level of investment” and that “a wealth of evidence now shows that it has also proven incredibly effective.” He continued, “This is the best, most successful response to an economic crisis that we have ever mounted, and it is not even close.”
  • Mr. Dutta-Gupta testified to the “stunning” success of pandemic relief legislation.  He explained, “Evidence to date strongly suggests that the federal fiscal response has been incredibly effective at reducing poverty and hardship, mitigating gender and racial inequities, and boosting the economy overall, especially when accounting for the American Rescue Plan.”

The Expanded Child Tax Credit and Other ARP Policies Have Brought the United States Closer to an Equitable Economy Where All Americans Can Succeed

  • Dr. Wilson stated that the reformed Child Tax Credit (CTC) is projected to decrease inequality and create a more prosperous country: “The expanded CTC has most impact on Black, brown, and indigenous families. As we think about this, we are talking about cutting child poverty in half for Black families, 45% for Hispanic families, 65% for indigenous children.”
  • Dr. Wilson further testified that the expanded CTC “will lift all families, this will lift all children, all families that are touched by it and quite frankly, by doing so it will have a redounding effect on our entire economy.” 
  • Professor Schanzenbach explained that the expanded CTC “can substantially improve the lives of millions of children growing up in the United States and promote our country’s long-term economic prosperity” and that expanding the CTC “would dramatically reduce childhood poverty in the United States.”

Establishing Paid Medical and Family Leave is Critical to Economic Progress

  • In response to a question from Rep. Carolyn Maloney, Dr. Wilson said that a parent’s lack of paid leave can have an impact on children’s well-being: “We know that most parents and caregivers who are in low-income families don’t have paid leave to care for their children or older adults at all, and never have had access. And this, of course, disproportionately impacts Black and brown parents.”
  • Mr. Dutta-Gupta explained that medical and family leave decrease costs and increase productivity, positively impacting the economy: “Offering protections for workers to be able to prioritize their own health and the health of their loved ones as well, including potentially sick kids and others they care for, can absolutely allow people to focus more on productive economic activity and avoid some of those substantial health costs that we have been facing in this country.”

Congress Must Take Further Action and Must Not Sabotage Our Growing Economy by Letting the Debt Limit Expire

  • Mr. Dutta-Gupta stated, “Policies in ‘Build Back Better’ proposals—with some crucial additions—would provide critical investments to help families hit hardest by the pandemic recover and reduce poverty and hardship for generations to come.”
  • When asked by Chairman Clyburn about Republican-driven efforts to default on America’s debt, Republican witness Dr. Holtz-Eakin urged Republicans to change course saying, “I am certainly happy to urge Congress to either suspend or raise the debt limit,” and later adding, “The consequences of not doing so would be severe, and I urge you to get it done.” 

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