ICYMI: News from The Recovery [March 24, 2021]
ICYMI: News from The Recovery
American Rescue Plan to Supercharge U.S. Economy; Yellen, Powell Say Aid Averted Further Ruin, Sped-Up Recovery, Saved Jobs, “But the recovery is far from complete”
The American Rescue Plan is already rescuing our economy, saving American lives and livelihoods, and brightening our fiscal outlook. Economic experts, health professionals, educators, local leaders, and the American people themselves remain united in their support for the American Rescue Plan. They understood the urgent need for bold action to end the pandemic, help families survive these crises, and generate a strong and inclusive recovery. Its enactment shows that Congress has finally learned its lesson from past crises: that doing too little will cost us far more in the end.
And it’s already paying off: Economists estimate that the American Rescue Plan will propel the U.S. economy to its fastest annual growth in nearly four decades, reduce poverty, and bring us back to near full employment by 2022. In fact, relief in the American Rescue Plan will cut child poverty in half and lift nearly 12 million people out of poverty. Overall, poverty will be cut by a third, with poverty rates for Black Americans falling by 42 percent and rates for Latinos falling by 39 percent.
Yesterday, the nation’s two most powerful economic policy officials, Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell, testified before the House Financial Services Committee on our nation’s significantly improved economic outlook, buoyed by the enactment of the American Rescue Plan. Both agreed that Congress’ actions averted an even worse economic fallout, but our recovery still has a long way to go.
HERE’S WHAT EVERYONE IS TALKING ABOUT…
Roll Call: Yellen, Powell say pandemic aid averted worst economic blow
Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell told House lawmakers Tuesday that federal financial relief packages averted the worst economic consequences of the pandemic.
The economic recovery has moved faster than expected, though with 10 million jobs short of the pre-pandemic level there’s still a ways to go, Powell and Yellen said at a House Financial Services hearing on the Treasury and Fed’s pandemic response.
“While the economic fallout has been real and widespread, the worst was avoided by swift and vigorous action,” Powell said. “More people held on to their jobs, more businesses kept their doors open, and more incomes were saved.”
… Yellen said federal financial relief packages, especially the provisions included in the law President Joe Biden signed this month, would address the “very deep pockets of pain” that remain in the economy.
… “I am confident that people will reach the other side of this pandemic with the foundations of their lives intact,” Yellen said. “I believe they will be met there by a growing economy. In fact, I think we may see a return to full employment next year.” …
The Washington Post: Fed chair, treasury secretary’s message to Congress: Recovery has a long way to go
A year into the coronavirus pandemic, after the loss of millions of jobs and the closure of thousands of small businesses, the Federal Reserve and Treasury Department have a message for Congress: It could have been worse, and there’s still a long way to go.
Testifying before the House Financial Services Committee on Tuesday, Federal Reserve Chair Jerome H. Powell and Treasury Secretary Janet Yellen told lawmakers that the economy is slated for booming growth this year. But their sunny forecast was paired with reminders that at least 9.5 million jobs are still missing from the labor force and that fully healing the economy depends on getting the pandemic under control.
“We welcome this progress but will not lose sight of the millions of Americans who are still hurting, including lower-wage workers in the services sector, African Americans, Hispanics and other minority groups that have been especially hard hit,” Powell said Tuesday.
The economic outlook has significantly improved over the past few months and been buoyed by the recent passage of President Biden’s $1.9 trillion coronavirus relief package and more-widespread vaccinations. Millions of Americans have started to see $1,400 stimulus payments hit their bank accounts. The Fed projects the U.S. economy will grow at its fastest pace in four decades this year, with the unemployment rate falling to 4.5 percent…
CNN: Yellen and Powell praise stimulus but warn that more needs to be done
… “While the economic fallout has been real and widespread, the worst was avoided by swift and vigorous action,” Powell said in a statement released by the Fed. But he also emphasized that “the recovery is far from complete, so, at the Fed, we will continue to provide the economy the support that it needs for as long as it takes.”
… “We are meeting at a hopeful moment for the economy — but still a daunting one. While we’re seeing signs of recovery, we should be clear-eyed about the hole we’re digging out of,” Yellen told Congress, according to her prepared remarks.
She noted that “the country is still down nearly 10 million jobs from its pre-pandemic peak” and that there are still “some very deep pockets of pain” in the economy, including millions of people who are behind on mortgage or rent payments and who don’t have enough food to eat.
“I looked at data like these, and I worried that the Covid economy was going to keep hurting millions of people now and haunt them long after the health emergency was over,” Yellen said.
She added that now that Biden’s stimulus plan has been signed into law, she is working to make sure that small businesses in particular get more help fast.
“We have been expediting relief to the areas of greatest need,” Yellen said, adding that “small businesses — and especially the smallest small businesses, which are disproportionally owned by women and people of color,” were hit hard by the pandemic.
Yellen said Treasury is now working to make sure that Paycheck Protection Program funds reach “millions more microbusinesses and entrepreneurs, especially in rural and low-income areas.”…
CNN: US poverty still high, but stimulus is stopping it from getting worse
…The [poverty rate] fell from 10.7% in February 2020, before the coronavirus began upending the economy, to a low of 9.1% in May, thanks to the federal aid. But it then began climbing as the benefits from the original stimulus agreement lapsed.
The share of people in poverty will likely fall again as benefits are disbursed from the latest sweeping $1.9 trillion relief package that President Joe Biden signed into law earlier this month. It contains $1,400 stimulus checks, a continuation of federal unemployment benefits and food stamps, a temporary boost to federal health insurance subsidies and one-year enhancements to the child tax credit and earned income tax credit.
The law represents one of the largest federal efforts to reduce poverty in the last half century. The package’s key measures are expected to slash the poverty rate by about a third and reduce the share of children in poverty by more than half, according to estimates from both Columbia University and the Urban Institute…
CHECK THIS CHART
The Institute on taxation and Economic Policy (ITEP) estimates that the combination of rescue checks, expanded Child Tax Credit, & expanded EITC would mean an average increase of nearly 33% in income for the poorest 20% of Americans. This is what targeted relief looks like.
