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The American Rescue Plan: A First Deposit Toward a Racial Equity Stimulus

The $1.9 trillion American Rescue Plan, passed by both houses of Congress and signed by President Biden, is a watershed moment. That such legislation has become law — that our federal government acted decisively with a bill targeted to aid low- and middle-income families — evokes equal parts inspiration and relief in its radical departure from previous trickle-down approaches that have increased inequality and racial injustice.

The Rescue Plan is a desperately needed life preserver for countless Americans, but what does it mean to be pulled from treacherous waters onto a leaking ship? As the end of the pandemic appears on the horizon and the federal government, states and localities rightfully deploy their fiscal resources to move the country forward, we must ensure that the society we return to isn’t one with the same inequitable and unjust outcomes we left in 2019.

A Racial Equity Stimulus framework on the order of $10-12 trillion is what’s needed to properly tackle the structures of white supremacy built into our society, and the Rescue Plan proves two things: one, that far-reaching reforms can be made a reality; and two, that such reforms are widely popular with the American people.

The history of the United States is punctuated by transformative moments led by visionary acts of government: Reconstruction, the New Deal, the Great Society. These moments weren’t brought forth by unique, superhuman officials. They may be catalyzed by a crisis, but they are shaped by organizing and demanding change, and policymakers willing to rise to the occasion. In addition to the past year’s historic mass racial justice mobilizations, mutual aid and elections, the passage of the Rescue Plan is yet more evidence that we find ourselves in just such a transformative moment. What we must do now is recognize that this bill’s passage isn’t a finish line, but the firing of the starter’s gun: we must take the banner of justice and equity and run with it as far as we can go.

Here are three ways that the Rescue Plan provides some fiscal credits towards a multi-year Racial Equity Stimulus:

1. Lifting Millions of Children Out of Poverty - Now, more than 93% of children in America will receive full or partial benefits under the Child Tax Credit (CTC). Because of past policy actions which disproportionately harmed Black, brown and Native children and families, this policy specifically adds unique benefits to those communities.  

Infamous for excluding parents in the very lowest income bracket, it now increases the benefit amount ($3,000 per child and $3,600 for children under age 6), expands eligibility to children up to age 17, and awards the benefit to all families with children except top income earners.

This part of the Rescue Plan alone will lift 4.1 million children above the poverty line, reducing childhood poverty by over 40%. As children in poverty are disproportionately Black, Native, and Latinx, the CTC expansion is a victory for both economic and racial justice.

This expansion expires after one year, and we must organize to ensure it is made permanent.

2. $167 Billion to Directly Support Education

Education budgets across the country, already stagnant for over a decade, were dealt serious blows by the COVID-19 pandemic. The Rescue Plan allocates $166.8 billion in new funding for primary, secondary, and higher education across the country. A significant portion of this funding is earmarked to address learning loss, a key factor driving concerns about growth in the racial learning gap. Stimulating racial equity in education is one of the four core components of the Racial Equity Stimulus framework.

3. Providing Resources to Low-income Families Will Spur Long-term Economic Growth Where It’s Needed Most

The Rescue Plan is a dramatic departure from trickle-down economics. Giving low-income Americans money has wide-ranging positive effects: not only will they be more financially secure, but they tend to spend the money locally, which means such programs can help support the growth and health of entire neighborhoods and towns. In an education system in which the majority of funds are raised locally, reducing poverty will help poorly resourced school districts, which enroll a disproportionate number of Black, Latinx, and Native students.

The President and the members of Congress voting for the bill should be applauded for taking an ambitious and expansive approach to our present crisis. Even greater accolades are due the community members, activists and organizers who have been fighting for a more just and equitable America during and before the pandemic. Policymakers are following these advocates’ lead, and if we are to achieve something as transformative as a significant racial equity stimulus over the next several years, it will take leadership not just in Washington, DC, but in every community and state across the country. We all have a role to play to ensure the American Recovery Plan is not a quick fix, but an initial deposit and bold first step to be followed by others.

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Learn more about the Racial Equity Stimulus >