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Stimulus payments are a lifeline for households pushed to the edge

Diana Perry (pictured at work for the Salvation Army) said she plans to use stimulus money to give her kids a fresh start.Suzanne Kreiter/Globe Staff

Fewer trips to the food pantry. Breathing room with the landlord. Child care for the kids, or that postponed mammogram because the medical bills were already piling up.

The $1.9 trillion American Rescue Plan that President Biden signed into law last week, with its goal of helping a wide swath of Americans get back on their feet after a difficult year, might be the most consequential yet of the pandemic aid bills. The buffet of stimulus checks, child tax credits, and other benefits could reach nearly $9,000 for a family of four, and more if they’re out of work or behind on the rent or eligible for food assistance.


The package is many things — compensation for the losses of the last year, a stimulus to jolt the economy back to life, and a way to give money directly to people in need, a tack that many advocates hope signals a new approach to how the federal government helps in times of trouble.

People such as Wayne Steed, a laid-off cook and banquet server at the still-shuttered Renaissance Boston Waterfront Hotel, who described the last year as a “roller coaster ride” of worrying about unemployment benefits and health insurance and paying basic bills.

To the 33-year-old, who lives in Roxbury and has three children, the package represents some stability. A godsend, actually.

His unemployment benefits, $590 before taxes, with an extra $300 a week from the relief bill, will now last through early September. He also gets a $2,800 stimulus check, for him and his oldest child, plus a $250 a month child tax credit, cash that will come in handy after a recent car accident. The $110 a month he was going to start paying in April for COBRA health insurance benefits, partially subsidized by his union, will now be fully covered by the government.


“Every last bit is needed,” said Steed, though there will be enough left over for a little fun: He’s planning to take his kids to an indoor water park, and when the COVID coast is clear, is dreaming of a vacation somewhere warm, maybe Florida or California.

This is what Steed envisioned when he made phone calls and knocked on doors with his union — Boston’s Unite Here Local 26 — to help Biden and other Democrats get elected this fall. That effort, he said, is paying off in a tangible way.

“With this package, I feel as if we definitely got more love. ... It did more for people than for the big corporations,” he said. “The working class is the majority in our nation. Why wouldn’t you look out for the majority rather than the few?”

Wayne Steed, a laid-off cook and banquet server at the still-shuttered Renaissance Boston Waterfront Hotel, described the last year as a “roller coaster ride” of worrying about unemployment benefits and health insurance and paying basic bills.David L Ryan/Globe Staff

Indeed, while the package includes billions for state and local governments in Massachusetts, much of the money will go straight into people’s pockets.

Already, $1,400-per-person checks are arriving in the bank accounts of nearly 4 million adults in the state, and the parents of 1.3 million children. Many of those parents will also get bigger tax breaks for some 1.1 million children in Massachusetts, according to White House estimates, as will almost 300,000 low-income workers without kids, who will see nearly $1,000 more from a key anti-poverty tax credit.

It’s a markedly different approach than the one taken by the stimulus bill of 12 years ago, a much-debated package of tax cuts and spending programs designed to lift the economy out of the crash of 2008.


That plan’s billions were filtered through so many different programs that it was hard for everyday people to feel the impact, said Amanda Fischer, policy director at the Washington Center for Equitable Growth, a think tank with ties to the Biden administration. And with its focus on the financial system, banks recovered far faster than struggling homeowners and laid-off workers.

“This is way more direct than that was. It’s mostly just giving people money,” said Fischer, who worked for the Obama administration and as a Democratic congressional staffer during the previous recession. “People are more likely to feel an immediate improvement in their lives.”

And no one will feel it more than parents.

One of the key benefits in the Biden plan — one its backers hope will prove popular enough to make permanent once the pandemic ends — is a one-year, $110 billion expansion of the federal government’s child tax credit, which has long provided a $2,000 tax break for taxpayers with children under age 17.

The new law increases that to $3,000, and to $3,600 for children 5 and under. It also extends the full amount of the tax credit to millions of parents who couldn’t claim it before because their incomes were too low to use a tax credit.

Crucially, some of that money will come upfront this time around. Instead of making parents wait until they file tax returns next spring to claim the full amount, they’ll receive direct payments — $300 for children 5 and under, $250 for older kids — each month from July through December.


“This alone will lift 4.1 million children out of poverty in one swoop,” said Chuck Marr, senior director of federal tax policy at the Washington-based Center for Budget and Policy Priorities. “It’s the country saying that kids are expensive, and also that kids are important.”

Diana Perry plans to use the money to give her kids a fresh start.

A 44-year-old with three young children from Lynn, Perry lost her job as a dispatcher at a plumbing company in November 2019, and stayed out of work to care for her husband, Alexis Nunez, who was on dialysis for renal cancer. Then the pandemic hit. Unable to find work and terrified she might bring the virus home if she did, Perry collected unemployment and turned to a food pantry for the first time in her life.

“I pretty much had no other choice,” she said.

Nunez died in June. The family’s two-bedroom apartment had always felt tight, and downright claustrophobic with the kids home from school all day. But with Nunez gone, Perry felt his presence everywhere.

Perry recently started a new job at the Salvation Army. And the very day Biden signed the bill, she began looking for a new apartment, knowing the stimulus check would cover first and last month’s rent. The extra child tax credit beginning in July should help cover the additional $600 she expects to pay in rent at a new place.


It will be tight, but worth it, Perry said, for the kids to have their own bedrooms and a yard.

“I’ll probably be struggling to the dollar,” she said, but “as long as I have them in a better position, it’s worth the struggle.”

The stimulus helps working families in additional ways. Head Start programs in Massachusetts will receive up to $18 million to expand access to early childhood education, nutrition, and health care services. There’s also about $350 million in rental aid — which Massachusetts doles out in chunks of up to $10,000 per household — plus funds for struggling homeowners, housing vouchers, and the homeless. Food assistance programs will be expanded, and easier to use.

“Barriers are being broken down for federal nutrition programs,” said Erin McAleer, president and CEO of Project Bread. “We’ve been shouting from the rooftops for a long time about the need for this.”

And the new programs will build on themselves. The stimulus increased SNAP, as “food stamps” are now called, by about $28 per person, per month, through September, which should ease demand at stretched-thin food pantries. There’s also money to extend free meal programs many school districts have run despite school doors being closed. And those child payments can, of course, be used to buy food for kids.

The credit may not technically be anti-hunger policy, McAleer said, but she predicted it’s going to fight hunger.

It’s also going to help many who are still out of work, coming as it does just as the most recent round of extended unemployment benefits ran out.

After losing her job as an IT analyst in South Hadley last March, Alice Mullane struggled to get the state to pay her unemployment claim. The benefits stopped and started three times, most recently when she took a part-time job as a bartender in West Warwick, R.I., which doesn’t pay much when people are staying home. One night she made just $14 in tips on a seven-hour shift.

But on Monday, 368 days after getting laid off, Mullane will start a full-time job, remote at first, as a contract administrator for a Boston energy-efficiency nonprofit. She also recently enrolled in online classes at Southern New Hampshire University. With her unemployment benefits finally paid in full and $2,800 in stimulus money for her and her 2-year-old daughter in her bank account, Mullane is ready to put a long, dark year behind her.

“I feel like I finally have hope,” she said. “My goal now is to buy a house.”

But hope is still out of reach for many. Undocumented workers won’t receive the $1,400 checks and are ineligible for many of the other programs. Benefits scale down quickly for households that earn more than $150,000, or individuals who earn $75,000 — households earning more than $160,000 get no stimulus checks at all. The extra jobless benefits run out by Labor Day.

But until then, they’re a lifeline for people such as Pam McGowan. The 54-year-old from Abington lost her job last March at a trade-show management company. She doesn’t expect her old job to come back anytime soon, so she is applying for new ones and wakes at 3 a.m. twice a week for a part-time job at the YMCA.

She also owes $3,500 in medical bills, and has been putting off a mammogram and colonoscopy because she wasn’t sure her $600-a-month COBRA health insurance plan would cover it. But with the relief package now subsidizing her insurance through September, she’s now planning to schedule those procedures.

“Every day you wake up wondering what’s going to happen,” McGowan said. “You wonder if you’re going to be able to pay your mortgage, put food on the table. … You feel trapped, you just feel absolutely trapped.”

That stress has been wearing on a lot of people, said Wilbur Brown, a social worker in Boston who counsels people leaving prisons and going through other life transitions. He knows many people who’ve lost loved ones, jobs, and purpose over the last year, and seen that lead to substance abuse, domestic violence, and mental health problems.

This kind of support, without a lot of strings attached, can help lift some of those clouds, he said.

“For the people I deal with, this is an incredible breath of fresh air,” Brown said. “People who’ve been standing in line at the food pantry, now they can go to Stop & Shop.”

Over the last year, other communities have experimented with directly giving money to people in need.

Chelsea last fall launched a pilot program, funded largely through private donations, that gave about 2,000 families a debit card worth $200 to $400 a month, to help address a mounting food crisis in the hard-hit city. Holyoke tried something similar using federal COVID aid, but the effort was rebuffed by the Baker administration, which said it wasn’t allowed.

Months later, Mike Bloomberg, who spearheaded the effort as then-chief of staff to Holyoke Mayor Alex Morse, is still frustrated. But he also notes that that sort of direct aid — while helpful in an emergency — won’t fix the deeper challenges that made cities such as Holyoke and Chelsea so vulnerable in a crisis to begin with. Whatever economic package comes next in Washington must aim at those too.

“We have an inherently unequal and broken economic system in this country,” he said. “If you just keep feeding money into the same system, is that really going to solve any long-term problems?”

And, of course, there’s the cost. At $1.9 trillion over 10 years, the package will add to mounting federal budget deficits. Making the child tax credit permanent could cost another $1.1 trillion, according to the Committee for a Responsible Federal Budget. Any tax hikes or other revenue to pay for those and other programs may be debated in Congress in the months to come.

But right now, for many people, the relief package is a blessing, said Carlos Aramayo, president of Unite Here Local 26. Many of his members have yet to return to their hotel jobs, and have endured a year of worrying about money and all that comes with it. Now, he said, they’ve got some help.

“I never thought I would live to see this almost New Deal-esque acknowledgment of working people and the challenges they’re facing at this critical moment,” Aramayo said. “It’s like the cavalry showed up.”

Janelle Nanos can be reached at janelle.nanos@globe.com. Follow her on Twitter @janellenanos. Tim Logan can be reached at timothy.logan@globe.com. Follow him on Twitter at @bytimlogan. Katie Johnston can be reached at katie.johnston@globe.com. Follow her on Twitter @ktkjohnston.