Opinion | The American Rescue Plan helps struggling Iowans during the COVID-19 pandemic

Democrats rightly chose to go big on COVID-19 relief.

Yuri Gripas/Abaca Press/TNS

U.S. President Joe Biden holds in the Oval Office at the White House in Washington D.C., on March 3, 2021.

Shahab Khan, Opinions Columnist


Iowans should rejoice because President Joe Biden and the Democrats are coming to the rescue.

On Saturday, the Senate approved Biden’s $1.9 trillion American Rescue Plan. The package includes money for vaccine distribution, unemployment insurance, infrastructure, health care, an expansion of the Child Tax Credit, and $1,400 checks.

While Democrats were unable to get everything they wanted in the package, the American Rescue Plan will help get hundreds of thousands of Iowans back on their feet.

Compared to last year, 65,000 more Iowans are unemployed as job markets continue to shrink. Although the recession has hurt many Iowans, the hardest hit has been the poorest. As unemployment among those earning less than $27,000 shot up by 23 percent.

Biden’s plan aims to dilate the social safety net and help those in need in three key ways.

First, the American Rescue Plan extends the $300 per week unemployment insurance through September. In addition, the first $10,000 received through unemployment is tax free.

Second, unlike previous rounds, adult dependents will receive stimulus checks. Single filers earning under $80,000 and joint filers earning under $160,000 will receive a $1,400 check.

Finally, the package improves the Child Tax Credit. Now, families earning under $150,000 can claim up to $3,000 a year for children who are 6-17 years old and $3,600 for children who are 0-6 years old.

The American Rescue Plan is going to provide enough support to Iowans until the state’s economy reopens. Not to mention, it is also projected that the relief plan will cut the number of Americans in poverty by a third.

However, Iowans could not have counted on their own senators, as Sens. Chuck Grassley and Joni Ernst, both Republicans, voted against the bill.

Since the package is financed through deficit spending, Republicans argue that the bill’s price tag would lead to unsustainable amounts of inflation and drive up the national debt to the point of crisis.

But the American Rescue Plan is not going to cause a rise in inflation. The fiscal boost from the package will only be effective in the short run as many of the programs are not permanent. Since prices are sticky, meaning they do not change, it’s safe to say that there will not be a sudden rise in inflation in the short run.

As for the national debt, Republicans often love pointing to estimations from the Congressional Budget Office that show how the debt will be eight times the size of the economy by 2050.

That being said, the numbers from the CBO are inaccurate to say the least. This is because they expect that real interest rates to rise in the future, increasing the value of the national debt.

Instead, as the economists Larry Summers and Jason Furman point out, we are going to be living in an era of low and negative real interest rates for the foreseeable future. This means that the carrying cost of the debt will be low and nonthreatening to the U.S. economy.

The aid package will provide great benefits toward Iowans and help alleviate the state’s struggling economy.

In addition, the reform of the Child Tax Credit makes it possible for thousands of Iowa families to join the ranks of the middle class.

As we near the end of the pandemic, history will look back fondly on Biden’s rescue plan and the way it expanded the welfare state.


Columns reflect the opinions of the authors and are not necessarily those of the Editorial Board, The Daily Iowan, or other organizations in which the author may be involved.