Many are calling the American Rescue Plan transformational to the welfare state—including by making false claims that it will cut child poverty in half. Others argue that the American Rescue Plan’s sweeping welfare reforms are actually a return to 1960s-era welfare policies, and are comparing it to the historically unpopular Aid to Families with Dependent Children (AFDC) program. Regardless of whether you see the Biden stimulus as something brand new or a return to the old, the message being sent by his administration is the same: More welfare, less work.
How do we know that increased government dependency is the real motive? Because a recovery was, and is, already underway. As states begin to relax restrictions and even fully reopen after the disastrous shutdown policies, the economy is improving dramatically. Millions of Americans have gone back to work and the economy grew by 38 percent in the third quarter of 2020—the fastest recovery in American history.
Yet despite these measurable improvements in our economy, the American Rescue Plan throws billions of taxpayers’ dollars into welfare programs that were already siphoning huge chunks of budgets around the country. After all, Medicaid alone accounted for 30 percent of state budgets even before COVID-19. This latest expansion of welfare means that businesses will have direct and fierce competition from the Biden administration, who is hell bent on massive government dependency as a way of life.
The bill continues pumped-up food stamp benefits through September, and provides additional funding to increase benefits for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) program. On top of those already existing and now expanded nutrition-based welfare programs, the American Rescue Plan extends the Pandemic Electronic Benefit Transfer (EBT) program to provide even more food aid during any school year that falls within a public health emergency, including through the following summer.
The bill also extends unemployment programs through September 6, 2021. Those receiving unemployment insurance (UI) will receive an additional $300 a week on top of traditional UI allotments. And taking things one step further, anyone and everyone making less than $75,000 is also receiving $1,400 in cash—regardless of their employment status.
As if all of that wasn’t enough, the falsely named “expanded child tax credit” will be completely refundable and advanceable for (theoretically) one year—meaning the government will send families monthly cash payments of up to $300 for every child they have, regardless of their taxable income. On one hand, the new policy is duplicative to the Temporary Assistance for Needy Families (TANF) program, which already provides cash benefits to needy families. And on the other hand, it’s already being touted as a step toward universal basic income for families with dependent children. As Greg Ip at the Wall Street Journal so aptly put it, “By making the child tax credit entirely refundable, he [Biden] has effectively severed any linkage to paid work.”
Work was the hallmark of the bipartisan 1996 welfare reform package that was signed into law by President Bill Clinton. Work requirements have helped countless individuals move from welfare to work, and work is the mechanism through which families have the opportunity to create their own American Dream. But who is going to go to work, and create that American dream, when their bank account keeps getting refilled by current and future taxpayers?
Throwing money at people will not enable them to achieve success. In fact, the Heritage Foundation found that the U.S. spent nearly $500 billion on welfare programs for low-income families with children—enough to eliminate child poverty seven times over—all the way back in 2018. Throwing even more money at families now won’t provide the desired outcome—unless the desired outcome is actually more welfare and less work. And that’s exactly what it is. Nancy Pelosi, Chuck Schumer and the Biden administration don’t want people to go to work, they want them to go on welfare.
The American Rescue Plan isn’t a life raft, it’s a millstone. It’s rife with indefensible spending on duplicative welfare programs and it was cooked up in a D.C. swamp lab with the sinister motive of increasing Americans' permanent dependency on the federal government. So, who’s going to rescue us now?
Sam Adolphsen is the policy director at the Foundation for Government Accountability