Federal Economic Stimulus Projected to Cut Poverty in 2021, Though Poverty May Rise as Benefits Expire

To get a clear picture of how federal economic stimulus in 2021 supported people struggling economically, we projected how many people are in poverty in 2021 compared with 2019, before the pandemic. We also project the reduction in poverty related to stimulus efforts in 2021. We used survey data for households and employers, along with CBO’s projections of employment, to create a demographic and economic scenario for 2021. Because poverty rates for 2021 will not be released until September 2022, we used “nowcasting” to project poverty with and without the Advance Child Tax Credit (CTC), and found the net impact of federal action cut poverty levels substantially.

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