When economies falter and hardship rises, governments must respond with vigorous action. It's a lesson our country learned in the 1930s with the New Deal but had seemingly forgotten during the painful decade that followed the Great Recession.
The landmark American Rescue Plan (ARP) Act Congress passed this week reflects a rediscovered truth. Its passage is a lifeline to families and communities through the choppy waters of the pandemic. The new law will provide much-needed relief and allow us to emerge on the other side of COVID stronger and more secure.
Combined with prior federal aid including through the CARES Act, the ARP rises to the occasion of an economic crisis in which over 1 in 3 Kentuckians report having difficulty affording usual household expenses. Nearly 1 in 5 Kentucky parents say their children aren’t getting enough to eat, and 16% of Kentucky renters are behind on rent payments.
Key hardship-reducing measures in the new law include:
- $1,400 checks to every adult and child with incomes up to $75,000 for individuals and $150,000 for couples, or 92% of Kentuckians.
- $300 a week in extra unemployment benefits through Sept. 6 and a continuation of other pandemic unemployment programs, helping over 100,000 laid-off Kentuckians get by.
- An expanded child allowance of up to $3,600 per kid that will go to 86% of Kentucky's children and their families, and a portion of which for the first time will be delivered monthly.
- Food and rental aid for those struggling to pay for basic needs, as well as over $760 million in Kentucky for child care assistance.
- Over $4 billion in aid to Kentucky state and local governments to protect public services and restore budget cuts, allow relief to those harmed by the pandemic, support essential workers and/or allow water, sewer and broadband infrastructure investments.
- Over $2 billion for Kentucky public schools and universities to allow them to operate safely, address learning loss and support students.
- Expanded assistance to make purchasing health care on the state’s healthcare exchange more affordable for at least 78,000 Kentuckians.
- Monies to accelerate vaccination and further bolster the public health response to COVID-19.
The ARP works because it targets aid to those who need it most even while also providing broad support to most Americans in recognition of the far-reaching harms of the crisis. And importantly, the plan is large: It recognizes that the biggest risk is doing too little to get families and communities back on their feet, rather than too much.
This legislation won’t be the last word on creating a robust recovery. Later this year, we’ll need a major investment in modernizing our infrastructure and clean energy in order to further strengthen our economy and put people back to work.
We still need an increase in the minimum wage to $15 an hour so that American workers can better get by. And we need measures in the ARP to be made permanent, particularly the groundbreaking child allowance which alone will cut American child poverty nearly in half.
For now, though, the ARP is the right legislation at exactly the right time. As its measures go into effect and the dollars begin to flow, Kentuckians will feel increased well-being and better peace of mind. We would be wise to take the lessons of this new law to heart.
Governments can and must put people first and act aggressively when troubles befall them. Kentuckians should expect and demand it.
Jason Bailey is executive director of the Kentucky Center for Economic Policy in Berea. He can be emailed at firstname.lastname@example.org