Stimulus Checks Impact on Poverty: New Study Supports Giving More Stimulus Payments

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New federal stimulus checks aren’t coming, and the Biden administration doesn’t seem interested in approving more stimulus checks as well. A new study, however, brings out the importance of sending more stimulus payments by assessing the stimulus checks impact on poverty. The U.S. Department of Health and Human Services released the study last month.

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Stimulus Checks Impact On Poverty: What Does The Study Say?

In February, the U.S. Department of Health and Human Services studied the impact of stimulus payments on households living in poverty. The stimulus payments that the HHS study considered were the $1,400 stimulus checks approved in March 2021 and the extended child tax credit sent in the second half of last year.

The study revealed that the stimulus checks helped to keep millions of households out of poverty, especially the households with children. Specifically, the stimulus efforts were able to collectively keep 10.8 million people above the poverty level, the HHS study found.

The HHS report estimates that about 7.9 million people were kept out of poverty by the stimulus checks, which was approved by the American Rescue Plan Act. Further, the extended child tax credit also kept 2.9 million people out of poverty, including 1.8 million children.

A point to note is that these numbers didn’t consider the impact of other stimulus efforts, such as the federal unemployment benefits.

Not The First Time

It is not the first time a study has highlighted the stimulus checks impact on poverty level. Last year, a study by the U.S. Census Bureau found a similar relation between the stimulus efforts and poverty level.

The Bureau’s Supplemental Poverty Measure (SPM) dropped to 9.1% in 2020 from 11.8% in 2019. This Supplemental Poverty Measure takes into consideration stimulus and other government assistance when calculating poverty percentages.

In fact, the data from the U.S. Census Bureau showed that 2020 SPM was the lowest since the SPM was first measured in 2009. Also, it was the first time that the SPM was less than the official poverty rate. In 2020, the official poverty rate was 11.4%, an increase of 1% from 2019.

At the time, the Bureau found that the unemployment benefits saved about 5.5 million people from falling into poverty, while stimulus checks prevented about 11.7 million Americans from falling into poverty.

Two rounds of stimulus checks were issued in 2020. The first round was approved in March 2020, giving up to $1,200 to eligible individuals, while the second round giving $600 was approved in December.

So even though stimulus checks are not a priority for the Biden administration now, their role in keeping millions out of poverty can’t be negated. With inflation surging and expected to remain at those levels or even higher, it is possible that lawmakers may turn to stimulus checks to support Americans.