How Additional Cash Payments Would Reduce Poverty

Four major policies in the American Rescue Plan (ARP) will reduce the number of people in poverty in 2021 from 44 million to 28 million – shrinking the overall poverty rate from 13.7 percent to 8.7 percent. Additional $1,400 payments could further reduce poverty to between 6.4 and 6.6 percent, depending on whether all people in the US are included or whether payments are limited to citizens. Two additional $1,400 payments could reduce poverty between 4.9 and 5.2 percent. Drops in poverty would be greatest for Black and Hispanic households.