The Coronavirus Aid, Relief and Economic Security (CARES) Act — which helped stave off financial crisis for millions of Americans during the COVID-19-related economic downturn, according to a new study — is set to expire next month.
Allocating around $460 billion to one-time payments and weekly unemployment checks, the federal aid expansion prevented nearly 12 million Americans from falling below the poverty line, as reported by The New York Times, and drove a 2.3% drop in the poverty rate nationwide. Sixty-eight percent of Americans who qualify for unemployment insurance are earning more now from unemployment checks than they would from their normal salaries, according to a paper from researchers at the University of Chicago.
Poverty rates were on pace to reach 16.3% if there had been no intervention and some families went as far as to ration food, according to the New York Times.
Researchers at Columbia University are optimistic the CARES Act could successfully return annual poverty rates to pre-crisis levels, but noted some flaws in the legislation. For example, it is not known if the majority of people now receiving unemployment benefits will be ready to return to work when the act expires on July 31 or soon after that date, as the current economic disruption may last much longer.
Around 30 million income-eligible people are still excluded from coverage. About 15 million of these individuals are undocumented migrants — a household with even one undocumented resident does not qualify for aid. The other 15 million are 17-24 year olds whose parents claim them for tax purposes. Columbia researchers advocated for expanding coverage as a key way to keep the national poverty rate low.
