By Mary A. Minor / For The Herald
Child poverty more than doubled last year after hitting record lows, Census Bureau data shows
In case you missed it, the U.S. Census Bureau reported on poverty in the United States in 2022, and the news is not good, especially for children. The New York Times reported that poverty among children more than doubled in the United States last year, as living costs rose and many pandemic aid programs ended.
In 2021, Congress passed the American Rescue Plan which included expansion of the Child Tax Credit. This $1.9 trillion economic relief and stimulus package made three important changes to the child tax credit.
It temporarily increased benefit levels to a maximum of $3,000 per child aged 6-17 and $3,600 per child under six.
It made the full benefit available to families with low or no income, which closes the gap that left a third of children excluded if their parents don’t earn enough income to qualify for the tax credit. This includes, for example, children living with grandparents who are retired and living on Social Security.
It paid the credit monthly instead of all in a lump sum at tax time.
These changes and other pandemic-era measures reduced child poverty in the U.S. by a whopping 46 percent. Most wealthy countries provide something like the expanded child credit, only they call it a child allowance. One estimate of the cost of this program per year is approximately $100 billion. However, the cost/benefit analysis indicates improvements in child health, educational attainment, with reduced involvement with child welfare and criminal justice systems, and more, the policy generates approximately $800 billion in societal benefits, representing a rate of return of eight to one.
Research on what families spent their child tax credit money on indicates it mostly went to pay for food, rent, school and household bills.
By the time eligible families received their first CTC checks in mid-July, 2021, many of the earlier forms of covid-19 relief had expired or were near expiration. In fact, by mid-summer 26 states had announced early termination of the federally funded expanded unemployment program because they were concerned that parents would leave the workforce.
In the real world, a number of researchers found that that the opposite was true. Providing the cash benefit provided resources to address barriers to employment, such as securing child care or getting automobile repairs, which expanded labor force participation. For example, one study found that parents reporting they were unemployed because they had to care for children decreased from 26 percent to 20 percent in the first three months of the expanded CTC. Even the conservative-leaning American Enterprise Institute found in their study that 90% of families receiving the CTC had no change in employment with about 5 percent working more and 5 percent working less. Most of the parents that reduced the number of hours they worked were parents of infants and toddlers.
Congress is back in session now and working to avoid another unnecessary and costly government shutdown.
Instead of playing political games with our economy, how about focusing on things that work? In 2021, we found the solution to child poverty. Then Congress let it expire and, with the spike in child poverty last year, we see the consequences of its inaction.
It’s not too late to change course. This year, Congress should make the expanded child tax credit available to the people who need it most, and it should be permanent and fully refundable. It is a good investment.
Mary A. Minor is a retired naturopathic doctor and a member of RESULTS, dedicated to achieving economic justice for under-resourced people. She lives in Snohomish.