Congress killed pandemic safety nets, and we’re still paying the price

Every September, the Census Bureau unveils crucial data on Americans’ poverty, health and income for the previous year.

The latest results underscore a pressing issue: In many key ways, our policymakers are still failing American families, even though they should be well aware by now of effective solutions.

Let’s parse the numbers. The Supplemental Poverty Measure — the most comprehensive measure of poverty — increased slightly, from 12.4 percent to 12.9 percent between 2022 and 2023. Child poverty rose from 12.4 percent to 13.7 percent. 

Now, there are some wrinkles in these numbers. If the threshold had been set using a different measure for inflation, the Supplemental Poverty Measure would actually clock in at 12 percent — a modest decrease, statistically similar to the prior year.

Either way, we’re looking at some combination of stagnation and steady erosion of living standards since the collapse of the pandemic-era social safety net. To see why, let’s look at the last few years, starting with the pandemic.

The 2020 COVID-19 pandemic set off massive job losses and a years-long global economic crisis. But Census data revealed that, by the next year, there were actually 45 million fewer Americans living in poverty. Even more stunning, child poverty had been cut nearly in half, falling to a record low rate.

Why? Because lawmakers passed a safety net.

The American Rescue Plan of 2021 included critically needed investments that paid off. It extended unemployment insurance and nutrition assistance programs. It paused student loan payments. It provided rental assistance and grants for small businesses to stay afloat. 

Healthcare subsidies kept people from losing coverage, while federal investments helped people heat and cool their homes. And perhaps most importantly, an expanded child tax credit sent monthly payments of up to $300 per child to every household with kids.

But one by one, those successful programs lapsed as conservatives in Congress refused to extend them. That led to a dramatic — in fact, record-setting — spike in overall poverty and child poverty by just the next year. 

Overall poverty jumped by about 60 percent, from 7.8 percent to 12.4 percent. And child poverty more than doubled, from 5.2 percent to 12.4, as pandemic income supports expired and there was no bipartisan action to extend them.

The dramatic reduction in economic hardship in 2021 proves that healthy public investment in our families and communities works. 

Similarly, the rising hardship since then proves that abandoning those investments makes us poorer. Had just the expanded child tax credit been in place in 2023, it could have reduced child poverty from its current 13.7 percent down to 8.6 percent.

Several other figures this year bear that out. For example, poverty figures went up despite an overall median household income increase of 4 percent. Thanks to structural inequities in the economy — between races, sexes and the rich and poor — rising incomes don’t reduce poverty without a strong safety net.

New figures for hunger also point to the role of safety net spending. Earlier this month, the USDA reported that food insecurity jumped by 6.3 percent in 2023, with over 74 million more Americans experiencing hunger. Over about the same period, federal spending on food assistance fell by 13 percent.

One pandemic-era investment, however, is still in effect — for now. And it’s still working.

Despite the destructive “unwinding” of pandemic-era expansions to Medicaid and related programs, the new Census data found that 92 percent of Americans were covered by health insurance last year — not statistically different from 2022. This is a testament to a pandemic-era enhancement of Affordable Care Act premium subsidies, which allowed record numbers of Americans to afford health care through the ACA Marketplace.

These subsidies expire in 2025, and unless Congress acts quickly to renew them, nearly

Four million people will lose access to health care coverage. Congress should learn from our experience with the pandemic social safety net and renew this funding — along with the other expansions they’ve allowed to lapse.

The data is clear: We must robustly invest in our families for the health of the nation, the economy and our children. Each year that we refuse to do so will further entrench us in poverty and inequality. 

But we know how to achieve a better future — all we need is the political will to do it again.

Karen Dolan is a fellow of the Institute for Policy Studies.