The successive stimulus checks from the federal administration helped struggling families during the pandemic and for months afterward as the economic stimulation continued to remain grim. But many of the programs initiated by the government have winded down. The loss of the financial relief that millions of households received during the tough times have put many in trouble as inflation has negated the economic recovery in the last two quarters of 2021.
Along with the direct payments of the three rounds of stimulus checks, the extended unemployment checks and the expanded Child Tax Credit stimulus checks all added up to a sustained relief plan that lasted till 2021. And they were just one part of the support measures.
There was indirect government aid that provided a wide-ranging coverage that supported businesses, other organizations like medical and educational institutions, and local, state, and tribal governments. The fact that so many Americans were forced to live paycheck-to-paycheck and were suddenly without a single source of income made the all-inclusive relief package necessary to prevent mass starvation, homelessness, and credit default.
And much of that help is drying up even as the record inflation has led to negative income in real terms for even those who have benefitted from a generous rise in wages. With inflation constantly above the 8.5% mark, the 3.6% rise in average wages across the country has meant that people are still earning less than they did before the pandemic.
Multiple Stimulus Checks Kept Millions Afloat During The Pandemic And After
Several stimulus checks kept the economy afloat during the pandemic and immediately after and kept the nation from sinking into another deep and prolonged recession as happened in 2009.
Federal benefits effectively ended on September 6 with the end of the extended weekly unemployment benefits coming to an end. While the jobless benefits were greatly expanded post the pandemic, people were able to receive the payments much longer than normal with an additional federal boost. People who were previously outside the ambit of the aid became eligible, including the self-employed and gig workers.
Only the Child Tax Credit stimulus checks remained and even that ended in December 2021 after Republicans negated President Biden’s plans to extend it through 2024. The Child Tax Credit stimulus check brought millions of children out of the clutches of poverty.
For millions of families in the US, the few hundred dollars a month they received through the CTC system was the difference between enough feet to eat or going hungry. Over 6 months, the expanded payments helped around 61 million children and their families and brought down the number of kids facing poverty by a staggering 40%.
The payments showed what economic research has revealed all along. Direct cash payments instead of food stamps can give people faster assistance and they get it more effectively.
Even two years after the pandemic brought normal life to a grinding halt, child care remains elusive in most communities, especially among the Black and Latino communities. It remains a source of anxiety that exceeds shutdowns, the pandemic, and other disruptions to life. Parents have been forced to choose between the best option for their families and their financial solvency and jobs.
The Withdrawal Of Child Tax Credit Payments Affected The Economy By Shutting Down A Section Of The Workforce
The ARPA of March 2021 secured funds for the Child Tax Credit stimulus checks. It brought solace to families struggling to cope with the ongoing financial struggles as the economy went on a downslide and also the rising cost due to record inflation. More than half of the middle-income families have resorted to the new infusion of cash to buy food for their children.
The failure of Congress to secure an extension was a severe setback, especially as the Republicans have approved tax cuts to billionaires that exceeded the planned outlay of the Child Tax Credit. They refused to agree on a common ground of who should benefit from the payments and how much should be allocated.
The Republicans have cited the lack of work requirements as a ground for refusing to extend the CTC stimulus check. even a couple of Democratic Senators have taken advantage of a split Senate to lobby for vested interest and stop any new financial support measure. The split Senate has ensured that they had effective veto power over all bills that passed through Senate. The upcoming midterms are expected to neutralize these dissenting vices within the Democratic party.
Senator Joe Manchin, one of the Democrats opposed to the CTC stimulus check, said that families would use the funds to buy drugs despite any evidence to suggest that. Manchin has an active interest in coal and gas and has been widely lobbying for them and getting paid millions for his service.
Families with children are still eligible for % of the payment that has been linked to the income tax return to be filed in 2022. Vice President Kamala Harris said that people across the nation work hard to ensure money for their families but continue to struggle to get by. She said that Americans deserve much better than that and it should not be this way in our country.
Economists are hopeful that the absence of credits will not have much effect on the economy but realize that there will be severe adverse effects. Caregivers continue to juggle obligations to their families and their profession and this section of the population may be forced out of the workforce. This is bound to further slow down the economy.
With insufficient federal support to pay for child and elderly care, families might have to make adjustments and it would mean one person in the family being forced to give up their jobs. It is an incredible decision by the federal government to address child poverty so positively, but then allow such incredible progress to lapse into oblivion.
Single moms are the ones most hit by the withdrawal of child support. Mothers who did not have to second-guess support for their children are now having to choose.
Many had to give up their jobs to look for children as the pandemic shut down daycare centers. It left them struggling to pay for rent, utilities, food, and gas. they slid into debt, which further compounded their trouble.