Coronavirus: 8 million more Americans in poverty due to pandemic

Study shows coronavirus stimulus relief helped save Americans from poverty until it ran out

Tuesday 20 October 2020 20:47 BST
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A new study suggests 8 million more Americans have slipped into poverty caused by the coronavirus pandemic and the government's response to their needs since May.  

The study was published by Columbia University and found that poverty rates increased after the coronavirus relief funding dried up.  

Congress failed to pass additional funding measures, which meant the initial Cares Act - which provided Americans with a one time, $1,200 check and boosted unemployment benefits by $600 a week - was all the relief most Americans received. Many Americans reported never receiving their check.  

Despite problems with distribution, the CARES Act was found to have been effective at temporarily keeping recipients out of poverty.

The funding saved approximately 18m Americans from falling into poverty in April, but that number has fallen to only 4 million as of September.  

In total, there are 55 million people living in poverty in the US, according to the US Department of Health and Human Services. Under the USDHHS definition, a family is under the poverty line if it earns $26,200 or less per year.  

The researchers noted that despite the CARES Act, poverty still rose by 1.7 per cent - from 15 per cent to 16.7 per cent - between February and September, and of that increase in poverty, black and Hispanic communities, as well as children, were the most affected.  

Partisan animosity in Congress has prevented the passage of new stimulus funding for Americans. House Speaker Nancy Pelosi and US Treasury Secretary Steve Mnuchin have spent weeks negotiating a possible second relief bill. Ms Pelosi's deadline for coming to an agreement prior to the election expires Tuesday.  

A major point of contention in the negotiations is whether state and local governments should receive federal funding to help provide services. Democrats support the measure, but Republicans have criticised it as a "blue-state bailout."  

Democrats also want expanded access to childcare for working parents and to draw up and implement an actual strategy for dealing with the coronavirus. Republicans believe that cutting taxes - which would ultimately take food from the mouths of the already cash starved state and local governments - and drawing up measures that allow businesses to dodge liability if their employees or customers contract Covid-19 are the best path forward.  

Ms Pelosi and the Democrats have pushed for a $2.2tn relief bill, while the Republicans demanded the funds stay at $1.8tn.  

Mr Trump broke rank with the rest of his party by claiming he would push for a relief package that was even larger than $2.2tn proposed by the Democrats.  

"Now, not every Republican agrees with me, but they will. But I want to do it even bigger than the Democrats, because this is money going to people that did not deserve what happened to them coming out of China," Mr Trump said.  

Senate Majority Leader Mitch McConnell opposed Mr Trump when he announced earlier this week that the Senate Republicans will reject any coronavirus plan drawn up by the White House and the Democrats.  

It is unlikely that further coronavirus stimulus funding will be approved before Election Day. 

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