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Child Tax Credit & Stimulus Checks Had Historical Impact On Adjusting The Economic Playing Field

According to a recent assessment from the U.S. Dept of the Treasury, economic stimulus programs implemented during the COVID-19 epidemic helped create “the most equitable rebound in recent history.” In terms of their work on the financial security of minority groups, this is particularly true. New research from the Treasury Department and fresh data from the Fed Reserve Board were both included in the study, which was published on October 23. Its conclusions included the fact that the Biden administration’s programs “helped to prevent the worst economic results predicted from the COVID jolt for Black and Hispanic families.”

Additionally, it was discovered that Black & Hispanic families’ financial standing has “remained strong” in comparison to recent economic recoveries across a range of economic metrics. In a news release, Deputy Treasury Secretary Wally Adeyemo said, “This report shows that, while the Biden administration initiatives have contributed to a historic economic rebound, we’ve also been building the economy we need for the long term one that allows all communities to reach their economic potential.”

American Rescue Plan

The paper claims that President Joe Biden’s 2021 American Rescue Plan “effectively delivered resources and aid” to previously underrepresented neighborhoods, assisting in the economy’s faster-than-average recovery. Remembering that the report was written before a year of election in which Joe Biden is running for re-election is important. It does, meanwhile, provide a wealth of information to back up its assertions that the country made a “historically equitable recovery” from the pandemic.

By the American Rescue Plan, the federal government distributed stimulus checks of $500 billion, with each qualified citizen receiving up to $1,400 in cash. After the administration of Donald Trump oversaw the first & second stimulus rounds, that marked the third (as well as largest) batch of stimulus checks. The American Rescue Plan additionally raised the earned income tax credit, child and dependent care credit, and child tax credit, all of which contributed to a decrease in the country’s child poverty rate.

Unemployment Rates Were Lower

Black & Hispanic rates of unemployment were less compared to as they were at that same point in prior recoveries within 20 months of the COVID recession peak, and they have remained lower through the most recent statistics. The disparities in employment rates across various ethnic groups have “closed substantially” and are currently close to their historical lows. Black, Hispanic, and white homeownership rates increased by 2.9, 1.2, & 1.1 percentage points, respectively, between 2019 and 2022. This took place despite rising interest rates that pushed up mortgage rates to all-time highs. In contrast, homeownership rates decreased during the Great Crisis and increased less for households of color in 2001 during both the crisis and the subsequent economic recovery. The percentages of Black and Hispanic company owners have grown to their greatest recorded levels of 11% and 9.8%, respectively, up 6.2 & 2.8 percentage points. These were the biggest increases recorded in the Study of Consumer Finances’ history.

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