The latest coronavirus relief package has a couple of more steps before it becomes law. But that path is now clear.
This is Trahant Reports.
There is a clear distinction between the way Republicans govern and how Democrats operate the levers. The Trump administration’s first act was for a $1.9 trillion tax relief bill, a bonanza for the wealthy. Now the first major piece of legislation from the Biden administration also costs $1.9 trillion and its impacts are more focused on working families and the poor.
The plan pumps money into the economy through all sorts of mechanisms, including $20 billion that will go directly to tribal nations and another $6 billion for Indian health programs. The plan has money for quicker vaccine distribution, expanded unemployment insurance, support for ailing businesses, funding for schools, and, of course, a check of $1,400 to most Americans.
This legislation does more to address poverty, especially child poverty, than any law since the 1960s and the Great Society or 1930s and the New Deal.
The most important provision may be the expansion of Child Tax Credit and the Earned Income Tax Credit. These laws currently lift 5.1 million children above poverty, and the new proposal would lift another 4.1 million children above the poverty line, cutting the remaining number of children in poverty by more than half, according to a study by Columbia University,
One of the odd things that has happened to our tax code over the past decade is that most people play more in payroll taxes than income taxes. Income tax is supposed to be progressive, make more, pay more. But it has not worked like that. The most famous example is Warren Buffett revealing that his tax rate was lower than his secretary’s rate. The Democrats’ plan addresses this inequity by making the Earned Income Tax Credit fully refundable. That’s money back in working families’ pockets.
The Biden plan also increases the Child Tax Credit from $2,000 to $3,000 per child, adding an additional $600 per child under the age of 6 (phasing it out for single parents making $112,500 and couples earning $150,000).
The money spent on families will have the quickest impact on the economy.
We also know that the tribal nations have significant challenges ahead.
As the Center for Budget and Policy Priorities put it in a recent report … “the pandemic has stretched tribal nations’ finances and health systems to the breaking point.”
National Congress of American Indians President Fawn Sharp said that “direct relief and other aid which is critical to the health, safety, and well-being of our communities and necessary to build back our distressed governments and economies.”
This bill will be a huge relief. For tribal nations. And for the families in those tribes.
I am Mark Trahant.