Anthony Behar/Sipa USA via AP Images
A volunteer helps the mother of a young child select food at the West Side Campaign Against Hunger outdoor mobile food pantry market outside of St. Paul & St. Andrew United Methodist Church in New York, April 20, 2022.
The Child Tax Credit, a hallmark of American tax policy since 1997, was expanded in March 2021, lifting over three million children out of poverty from June to December. In part because of that program, 78 percent of Americans expressed that they were financially sound at the end of 2021, the highest number in the decade-long history of a survey conducted by the Federal Reserve. The CTC expansion was specifically cited in that survey as a significant boost to household well-being.
Today, six months after the expanded program ended, as inflation continues to rise, as wages lag behind it, and other pandemic-related support measures are discontinued, people raising children have been put in a position that is perhaps worse than pre-pandemic.
As part of the American Rescue Plan, the CTC payment amounts were increased, turned into a monthly payment, and the requirements were lowered to cover more people raising children. From July to December 2021, parents were provided with payments of up to $300 per month and per child. Before the changes, people without an income had been ineligible, and children over 16 were excluded. According to an analysis from The Washington Post, these pre-expansion requirements had put people in a position where “poor parents must earn more than [the] poverty threshold to claim a benefit aimed at lifting them out of poverty.”
Now, however, the absence of these expanded payments has profoundly impacted the quality of life for families in America. As well, relief that had been promised in the form of Build Back Better became a casualty of President Biden’s stalled legislative agenda.
A survey from ParentsTogether Action, a nonprofit parent advocacy group, illuminates just how harrowing this year has been without the expanded tax credit, and why reinstating it is so critically important. According to the survey of the group’s membership, which “skews lower-income,” nearly half said they could not feed their family. Nearly 30 percent are unable to meet their family’s basic needs without the Child Tax Credit payment, while over 80 percent said the expanded payments had decreased their financial anxiety.
The enhanced CTC has been accused of being a system that “pays parents not to work,” but data consistently shows how this is a false equation. When people are given payments directly, they use it on what they most need at that time. The only shame in that is attributed by those who have never been put in that position.
ParentsTogether found in their survey that people were using the CTC payments on “food (80%), housing (60%), [and] utilities (67%).” This is consistent with the Household Pulse Survey from August that found that food insufficiency and financial hardship dropped with the payments. About 47 percent of respondents from that survey said that they spent the checks on food.
“I think the most striking thing is just how hard things are right now,” Allison Johnson, campaign director for ParentsTogether Action, said.
The challenges presented by the program’s ending have been picked up in other surveys as well. The national Household Pulse Survey, conducted by the U.S. Census Bureau, showed that food insecurity shot up after the expiration of the CTC. A Columbia University study found that child poverty increased by 41 percent as soon as the monthly CTC ended.
At the same time, inflation has reached historic levels, with the highest increase in 40 years. While it has slowed slightly, gas and food prices remain high. Rent increased by 16 percent in the first quarter of 2022. Child care is increasingly unaffordable and difficult to find.
Other pandemic-related aid measures have also been discontinued. Pandemic Unemployment Assistance ended in September, and another round of Economic Impact Payments appears to be a lost hope. While the unexpanded CTC has bipartisan support and will not expire until 2025, the expanded version depends upon the passage of some version of Build Back Better. Given West Virginia Sen. Joe Manchin’s opposition to the expanded CTC, however, even if a diminished Build Back Better manages to pass, it’s not likely to include a resurrection of the expanded Child Tax Credit.
That expansion accounted for an almost 30 percent reduction in monthly child poverty. Without it, parents are often put in the difficult position of choosing between feeding themselves or their children. For any parent, that is a no-brainer—feed the children, always. But in the most prosperous country in human history, it is abhorrent that this is a consideration.
There is a common talking point among conservatives that government payments disincentivize people. Groups like ParentsTogether, however, are demonstrating how this is a false choice, and how a rightsized government program can make a huge difference in people’s lives. Even with inflation and a stalled agenda, enacting an adequate CTC shows that the government can ease the financial burden many families feel.
“It’s not very often that you have a solution like that,” Johnson said, “that you know can be implemented, and within a month millions of kids will no longer be living in poverty. And so it just feels like right now, to not do this is inexcusable.”
What a world of difference $300 a month can make.
