Consider This from NPR - Pandemic Era Benefits Made A Big Dent In Poverty. So Why Did They End?

Episode Date: October 30, 2023

Without Pandemic Era Safety Net, Millions Of Americans Could Fall Into PovertyLearn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

Joshua Davis recently got kicked off Medicaid. The state of New Mexico, where he lives, says he makes too much money. I make like $16.50 an hour. Davis has an autoimmune disease. And now that he's lost Medicaid, the treatment gets expensive quickly. He bought private insurance, but the monthly premiums are already blowing up his budget. I didn't really have to worry about the costs of my specialty appointments, you know, all the blood work and then getting the medication for it until now. And I'm actually having to jump through just a lot of hoops with my new insurance because they don't want to pay for it. During the

pandemic, people like Josh couldn't be kicked off Medicaid. The federal government had declared a public health emergency because of COVID and wanted people to stay covered as the virus swept the country. But that ended earlier this year. And since then, more than 7 million people have been dropped from Medicaid. So even though like the state is well aware of my condition, they weren't going to let me keep Medicaid anyways. They were just basically like, well, now you make too much money in our eyes, so that sucks for you. On top of losing Medicaid, the amount of benefits he was receiving for food assistance was also cut

after the pandemic emergency declaration ended. He went from close to $300 a month to like $23 a month. It's pretty pointless. I mean, I can buy like two or three items at the grocery store and that's about it. Angel Jackson is facing a similar problem. She's a single mom in Houston with an eight-year-old son. During the pandemic, the expanded child tax credit gave more money to low-income families with children. And for people like Jackson, it made a big difference. My son went to a charter school, so I bought school shirts. I got his hair cut. I was able to do like small things

in small increments. More money for kids, the extra food benefits and Medicaid protections were all part of a stronger safety net that the country quickly made available in response to the public health emergency that was COVID. The pandemic showed us that the country could set up an effective support system for Americans

who need a little extra help, food, medicine, employment, housing, even debt. So consider this. Three years later, most of those programs have expired, sending millions back into poverty. How are Americans faring without this safety net? And will the country ever get it back? I'm Scott Detrow. It's Monday, October 30th. It's Consider This from NPR. I'm Scott Detrow. The beginning of the pandemic was a scary time for everyone. Aside from the deadly threat of COVID-19 itself, as the world shut down,

people were terrified of losing their jobs, their health insurance, their homes, and a lot of them did. Amy Bauchert and her husband from Herndon, Virginia, both got laid off during the pandemic. Her first fear was not being able to keep food on the table for their two kids. And our school put out a message to everybody saying, hey, you know, we've got food. There's no paperwork to fill out. There's no income restrictions or guidelines or whatever. Literally, all you have to do is go pick it up. They just want people to have this food during this time. Free school lunches for all public school students, regardless of income, was another piece of the support

package from the government during the pandemic. If you needed some extra help in other areas, it was suddenly just there. And many of these benefits came through the CARES Act, also known as the full name, the Coronavirus Aid, Relief and Economic Security Act. It was a $2.2 trillion economic stimulus bill passed by Congress and signed into law by then-President Trump in March 2020. The goal was to keep the country afloat during the pandemic, and among the benefits, stimulus payments, increased unemployment benefits, the Paycheck Protection Program, and others. The CDC issued its temporary halt on most evictions nationwide. The short-term ban would take effect as... Today, Secretary DeVos has directed federal lenders to allow borrowers to suspend their

student loan payments for at least the next 60 days, and if we need more... Utility companies can now apply for assistance on behalf of bill payers who are behind because of COVID-19. Like the free school lunches that helped Amy Bouchard's family, several of these programs came with a unique feature. You didn't need to apply. The stimulus payments and expanded child tax credit used existing tax returns to determine eligibility or the amount of the benefit. Bouchard admits that paperwork and wait times would have probably stopped her

from taking advantage of the food benefits that kept her family afloat. It was hard enough to convince her husband that they needed it. When I even suggested it to my husband, like, we should go get that food. And he's like, we're not that poor. And I'm like, well, but it's for everybody. And he's like, they're not going to ask me. And I'm like, no. So I know he would have been embarrassed had he had to say, we lost our jobs and we can't afford this food. And even setting aside that shame, the Bauscherts fell into food insecurity so quickly after their layoffs that paperwork wouldn't have been helpful anyway. Like our tax return looked like we had money because I had just lost my job, right? Like it wasn't like this was an ongoing thing for us. It was something that was happening right then.

So our tax returns wouldn't have helped us. The Bauscherts found new jobs and they're back on their feet financially. But many families are always teetering on the edge of a financial cliff. Or if they lose a job or are hit by an emergency, they'd be unable to cover their basic needs. And that's without a pandemic or an economic crisis. Every month is an emergency. Elizabeth Ananot is an economics professor at Barnard. She was also senior economist for labor, education, and welfare at the White House Council of Economic Advisors in 2010. She researches

poverty and inequality, and she says that she saw an incredible turnaround for families living with poverty and food insecurity after the child tax credit payments began in 2021. Of course, the pandemic was an emergency, but for many American families, they were already living in an emergency, right? When families are living below the poverty line, that means they don't have enough money to meet the basic necessities for existence. They're scrambling every month. They're doing things like going to food banks, selling plasma, racking up credit card debt. These families always knew exactly what they would do with an extra $300 a month. And they do it, and it makes a difference the second they get it.

The child tax credit has gotten so much attention, and it makes sense why. Is there one or two other programs that you would single out that if you could magically set federal policy, you would also bring back? Yes. So during the pandemic, SNAP, the program that was formerly known as Food Stamps, which provides nutrition assistance to low-income Americans, was significantly expanded. It's been known for a while that SNAP benefits weren't really high enough to actually cover families' food budgets, but during that pandemic expansion, they were. But it expired in February of 2023. It had made

a big difference. Another thing that was done during the pandemic was an expansion of continued access to Medicaid. So Medicaid is something that basically all poor children and many poor adults are eligible for, but there are usually pretty difficult recertification hurdles that happen pretty frequently in order to stay on the program. Those were waived during the pandemic, but they've just been brought back. Millions of people are losing Medicaid every month, and the evidence shows that it's overwhelmingly not because they're, we feel like it'll be easier to keep extending them. That didn't happen. There were many political reasons, but one of them was that there was a lot of concern that this contributed to the inflation we saw the last few years. You're an economist. What do you make about that argument?

Well, I think if we look at other countries, we're actually doing quite well on inflation now relative to our peer nations. And that suggests that this wasn't what drove that. In the long run, investing in children and investing in our workforce capacity actually helps bring down the inflation rate. And I think we're starting to see that the investments we made there are helping us in the long run. That was maybe a plausible story a year ago, but it doesn't seem consistent with the cross-national data now. Then there was another political dynamic that a recent interview we did with Republican Senator Marco Rubio touches on. He said that he is in favor of bringing back the tax credit, but with work requirements. It requires you to have a job because it requires you to have some

tax liability that the credit applies towards. But I also think it recognizes that the purpose of this program always was and should continue to be to allow working parents raising children to be able to keep more of the money they earn to be able to afford or help afford the costs of raising children in the modern economy. I mean, it's not a new argument, but we're hearing it more and more tied to this particular program. Curious what you make of it. Yeah. So one thing to understand is that is what the child tax credit was before the expansion and it's what it's reverted to with those work requirements and that phase in of the tax benefits with earnings. You don't get the poverty relief effects that we saw during 2021 because about a quarter of all American children live in families

that earn too little to get the full benefit when it has these earnings requirements. One thing that we have to recognize about our economy is that it takes money to earn money, right? So there are all these expenses that you have to invest in, childcare, getting your car repaired, et cetera, in order to be able to get and maintain a job. And when you say, we're only going to give you this money if you have a job, that kicks them when they're down and actually makes it harder for them to get that toehold back in the labor force. And what we saw with the expanded credit was that people use that money, in which case it doesn't sort of help you with these ongoing expenses. Or you have to implement a whole new bureaucracy that measures every month where their parents are working and whether they therefore get their monthly payment. And that costs a ton of money to administer, and we end up not helping the people who actually need

it. One other aspect of all this I want to ask you about was the way that a lot of these benefits were given out. It was almost automatic based on already filed tax returns rather than having people send in applications, submit paperwork. How big of a difference did that make to you? So that makes a huge difference because the more paperwork there is, the more boxes you have to check and the more bureaucracy you have to deal with, the more that the people who most need the help don't get it because it takes a lot of resources to navigate all of that stuff. You need good internet connection. You need time to stay on the phone and to call back and stay on the phone again if you get disconnected. You need to sort of understand how to navigate these systems, how to get the right paperwork.

You need people who will give you the right paperwork and all of that most disadvantages the people who are already stretched to the thinnest. And of course, they are the people we most want to help. And is that to you worth possibly, quote, wasting money on people who may not actually need these programs, who may be doing fine? I mean, because that is one of the other main political concerns that you hear about this from lawmakers who are more skeptical. They say, look, the deficit is so high, inflation is so high, we don't want to be giving out benefits to people who don't actually need them. Yeah. So I think it's not clear where you draw the line because we do know that the existing child tax credits, the one that's in place right now, those benefits go up to people making $400,000 a year. It's hard to argue that they really need the money, but the expanded credit was always targeted to people making around $150,000

and less. Those folks on the upper end of that range, they aren't struggling mostly with food insecurity, but a lot of times they are struggling to cover those two child care payments, for example. You're an economics professor, so just forgive me for asking a question about your feelings because I know that's outside of your realm. But I'm curious what you make of this at this point, because on one hand, these programs were put in place. There's now a lot of data that they work. They work pretty well. On the other hand, it is hard to see a combination of things that need to happen in Congress and the federal government in the near future that would allow them to be put back in place again. So I'm wondering

what you spend more time thinking about right now when it comes to that. Yeah. So I think, you know, what happened with the 2021 tax credit was pretty unique in terms of how we usually help poor families, in that most of the things we've done for poor families have first been tried at the state and local level. And then when they're shown to be successful, they get adopted by other localities and states, and eventually they spread to much of the country. And at some point, you know, the country sort of looks at it and says, hey, this is such a good idea that we should really do it at the national level. And that's not what happened here. So what I sort of focus on is it looks like at this point, we're back to sort of building that by state and locality momentum,

where we do see some states enacting expanded child tax credits themselves right now. And maybe we can get to a place where a lot of children and families are being helped by this. And maybe at that point, we'll get more national momentum for like, hey, it shouldn't actually matter what state you are in. As a kid, you should be getting this thing that very clearly benefits you. So I look at it as, you know, we're back to the long game. Yeah. That's Elizabeth Ananot, economics professor at Barnard. Thank you so much. Thank you so much. Let's consider this from NPR.

This episode was produced by Lauren Hodges. I'm Scott Detrow.