Using Cash Payments to Reduce Poverty

Fact Sheet

Using Cash Payments to Reduce Poverty

August 7, 2020

Abstract

A recent Urban Institute analysis projected that three provisions of the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, meant to stimulate the economy and reduce material hardship in response to the COVID-19 pandemic and recession, could keep 12.2 million people out of poverty between August and December 2020. One of those three provisions, providing Economic Impact Payments (“stimulus checks”) of $1,200 to most adults (and up to three dependents), would by itself keep a projected 8.3 million people out of poverty. But additional stimulus payments could substantially reduce projected poverty in the final five months of 2020, particularly among Black and Hispanic people. An additional direct payment would keep another 6.3 million out of poverty over that period.

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