As Congress considers President Biden’s proposal to provide additional support to families and stimulate the economy, it is important to understand the extent of need American families may be facing in the coming year. We project an overall 2021 poverty rate of 13.7 percent, meaning that about one in seven Americans may have annual family resources below the poverty threshold. We use the Supplemental Poverty Measure, which takes a broader view of families’ needs and resources than the official measure. Our projections, developed using the Urban Institute’s Analysis of Transfers, Taxes, and Income Security model, take into account expected levels of employment and income in 2021 and consider 2021 benefits and taxes. Long-standing differences in poverty rates remain, with non-Hispanic Black people and Hispanic people experiencing poverty at about twice the rate of white people. In future work, we will examine how additional or proposed policies might affect families’ economic well-being.
Four key elements of the American Rescue Plan Act would reduce the projected poverty rate for 2021 by more than one-third.