Stimulus Check Update: There Are 10.8 Million Reasons for Lawmakers to Consider 2022 Stimulus Checks
- The U.S. Department of Health and Human Services recently released a study assessing the impact of stimulus payments on poverty in 2021.
- The data shows millions were kept out of poverty.
- This should provide strong incentive for lawmakers to continue offering stimulus relief.
A new HHS report shows just how important stimulus checks were to reducing the poverty rate.
In 2021, Americans received substantial financial assistance from the federal government. This included direct payments made to their bank accounts. Lawmakers in D.C. authorized stimulus relief because of the ongoing financial impact of COVID-19.
In February of 2022, the U.S. Department of Health and Human Services provided an analysis of the impact of these payments on the number of households living in poverty. The data showed millions of households were kept out of poverty by the relief payments -- especially households with children.
Just two stimulus efforts alone were able to collectively keep 10.8 million people above the poverty level, and these two efforts would be easy to replicate for lawmakers who wish to reduce the economic struggles that many are continuing to face.
A shocking number of people were kept above poverty by these two types of stimulus relief
According to the February HHS report, an estimated 7.9 million people were kept out of poverty as a result of economic impact payments issued under the American Rescue Plan Act. The advance Child Tax Credit also kept an additional 2.9 million people out of poverty. Among those 2.9 million people, 1.8 million were children.
This does not include the effects of other stimulus efforts, such as expanded unemployment compensation which also helped to raise the incomes of millions. The economic impact payments and advance Child Tax Credits did exactly two things:
- The EIP payments provided $1,400 stimulus checks to eligible adults and dependents
- The advance Child Tax Credit increased the amount of the existing Child Tax Credit to $3,600 for children under age 6 and $3,000 for older children. This was up from the previous $2,000 maximum under the old rules. The expanded credit also made the entire amount refundable, while previously just $1,400 was refundable. A refundable credit can provide more money back than people paid in taxes, rather than just reducing a tax bill to $0. The advance Child Tax Credits were also paid out at a rate of $300 per month or $250 per month from July to December while the existing Child Tax Credit was only available when filing tax returns.
Giving people this money during the year was, by itself, enough to make a huge difference for millions of taxpayers. And there's a strong argument to be made that similar assistance is still warranted in 2022 -- especially as inflation is surging due to continued supply chain issues resulting from the lingering effects of the pandemic.
Lawmakers have considered continuing the expanded Child Tax Credit, although thus far efforts to do so have been unsuccessful. There has not yet been discussion of another stimulus check, but with the price of gas and other products expected to keep rising, it is possible lawmakers will someday decide more relief is needed -- especially since HHS data shows the payments made last year had such a positive impact on reducing the poverty rate.
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