Michael Brochstein/Sipa USA via AP Images
Senate Majority Leader Chuck Schumer (D-NY) speaking at a press conference about the Child Tax Credit, July 20, 2021
In the American Rescue Plan, passed at the outset of the Biden administration, Congress greatly expanded the Child Tax Credit (CTC) to virtually all families with children, and paid it out monthly for the first time. Starting in July 2021, the IRS sent families payments—$300 for each child under 6 years of age and $250 for children 6 to 17 years. The credit was made fully refundable and offered to families with the lowest incomes for the first time. More than 90 percent of all children were eligible for the credit. (Full disclosure, my wife Rosa DeLauro was a co-author of the policy.)
While only in place for a year, the results of the expanded Child Tax Credit were—without understatement—transformative.
Harvard economist Jason Furman wrote, “The Biden plan is the most impressive and ambitious child poverty plan ever in the United States. This would not just help in the short run but have long-run mobility benefits as well.”
H. Luke Shaefer and Kathryn J. Edin, co-authors of $2.00 a Day: Living on Almost Nothing in America, wrote, “The expanded child tax credit could effectively eliminate the kind of $2-a-day poverty that motivated our book … We have the ability to wipe away the most extreme forms of child poverty with a simple policy.”
Academic studies found that in just its one year of operation, the expanded CTC was delivered to 36 million households and cut child poverty by over 40 percent, with 3.7 million kids lifted out of poverty. The number of children without enough to eat fell by three million. And after it expired, 2.1 million children in Black, Hispanic, and Indigenous communities fell into poverty.
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The additional funding for poor families sustained families and supported work. Low-income recipients spent more than 90 percent of the added money for food, utilities, clothing, diapers, and education. Many used the monthly credit to cover child care costs so they could go back to work. When the monthly payment stopped, the number of unemployed went up because these families could not afford child care.
The worry of conservative skeptics that the payment would be “welfare” and lead to people declining employment has not been borne out.
The expanded Child Tax Credit is expensive, but it is an investment. Economists have found that taxpayers get 84 cents back for every dollar spent in children being healthier with decreased health care costs, less costs for child protection and foster care, and higher wages and taxes paid. The investment pays off tenfold, as children get more education and training, there is less crime, parents earn more money and pay more taxes, and people are healthier and live longer.
But if the Child Tax Credit is really going to become “Social Security for children,” then it also must be good politics.
Fortunately, it is.
IN OUR SURVEYS, WE ARE TESTING the range of things Democrats and the Biden administration have accomplished. Most recent surveys were conducted with the support of the American Federation of Teachers and Economic Security Project Action. The expanded Child Tax Credit is among the most important for the hard-hit, working-class Democratic base of African Americans (12 percent of the electorate), Hispanics (10 percent), millennials and Gen Z voters (40 percent), and unmarried women (23 percent).
It is understandably central for the recipients themselves (17 percent), but also for parents in general (33 percent) and whites where a family member has a disability (10 percent).
And it is key for the swing targets of white voters under 50 years without a four-year degree (17 percent).
For all those groups, the expanded Child Tax Credit is the most important Democratic achievement, along with what Democrats have done in reaction to the gun massacres, the push for higher wages, and acting against price-rigging.
But campaigns are also about the issues on which candidates are vulnerable to attack. Do you remember “defunding the police”?
We tested the strongest attacks against the Republicans, and again, the politics work. (In the graphs below, the issues raising the greatest doubts are in yellow.) They are vulnerable on taking away the expanded CTC and raising people’s taxes. It is virtually the Republicans’ greatest vulnerability with these groups, along with them doing little about guns after the massacres, including not raising the age for buying assault weapons from 18 to 21. They are also vulnerable on making abortion illegal nationally.
Hitting Republicans on pledging never to allow the expanded Child Tax Credit to happen again was the second-strongest attack for Blacks, Hispanics, Gen Z voters, and millennials. It was the very top attack for white working-class voters under 50 years, as well as the recipients. Mitch McConnell promising to make abortion illegal nationally was a top attack for white Gen Z and millennial voters and white unmarried women. But even among Gen Z, the CTC attack scored higher than abortion.
Despite these results, the expanded Child Tax Credit has virtually vanished from the Democrats’ agenda and politics for 2022. That’s unfortunate, because making it a central issue is critical to any Democratic winning strategy in November. The politics work for the midterms and for the next Democratic president.
Sen. Manchin and all the Republicans in the U.S. Senate stopped the extension of the expanded Child Tax Credit this summer.
But the Biden administration has been unclear on whether they see it as a priority. When the president cheered the Inflation Reduction Act agreement between Sens. Schumer and Manchin, he highlighted a hefty list of programs that he would support in the future: affordable child care, elder care, housing, higher education, closing the health care coverage gap, and expanding Medicaid in states that refuse to do it. But he did not mention the expanded Child Tax Credit.
In his animated speech about the MAGA Republicans at the DNC at the end of August, he did include it. “If we elect two more senators, we keep the House—and Democrats, we’re going to get a lot of unfinished business we’re going to get done,” Biden said. “We’ll codify Roe v. Wade. We’ll ban—we’ll ban assault weapons. We’ll protect Social Security and Medicare. We’ll pass universal pre-K. We’ll restore the Childcare Tax Credit. We’ll protect voting rights.” (The White House confirms that Biden was citing the Child Tax Credit, not the Childcare Tax Credit.)
Despite this, there is no evidence that the main messaging and policy bodies for Senate and House races—the DSCC and DCCC—are yet including the expanded CTC.
During the Build Back Better negotiations, the Progressive Caucus in the House and Sen. Bernie Sanders prioritized paid leave, child care, and home health care; allowing Medicare to negotiate lower drug prices; and expanded coverage to cover dental, vision, and hearing aids. It also pushed for action on climate change and immigration. It is possible that some members of the Progressive Caucus thought the White House had already committed to including the expanded Child Tax Credit. But it wasn’t a top priority.
WHY HAS THE CHILD TAX CREDIT not been a higher priority for Democrats?
Rep. Rosa DeLauro, my wife, struggled for 20 years using whatever legislative vehicles to expand and grow the Child Tax Credit. She wrote in her book The Least Among Us that “the biggest obstacle has not been lies or obstructionism or direct opposition, but indifference to the condition of children, particularly poor children.” Most Democratic members liked the program, she found, but they didn’t give it a high political priority.
A senior staff person in the House speculates that Democratic members feel they failed their constituents in not extending the Child Tax Credit, and just don’t think to use it in a campaign.
I think the main reason is that Democratic elected leaders see their political base as increasingly college-educated women voters in better-educated suburbs and economically dynamic metropolitan areas. And they believe their diverse base of African Americans, Hispanics, and Asian Americans are motivated by identity politics more than economic issues.
The 21st century was launched with George W. Bush’s trickle-down tax cuts, and working-class voters (particularly working-class voters of color) lived through two decades of lost income, lost wealth, and spiking inequality. Corrupt, dark money meant the game was rigged for billionaires and the biggest corporations.
As I wrote in The American Prospect, “The Obama years were the critical juncture when Democratic leaders stopped seeing the working class and feeling its despair and anger. They stopped advocating for workers against corporate excess and stopped challenging the exceptional corruption that allowed billionaires and Wall Street to dominate politics. The result is that the Democratic Party has lost touch with all working people, including its own base.”
In recent memory, only in 2018 did Democrats run on the economy and reforming politics, attacking Republicans on repealing Obamacare and cutting federal health care spending, along with Trump’s big corporate tax cut and self-enrichment. I listened to focus groups with working-class Trump voters in Macomb County, Michigan, who were so angry with the cost of Obamacare and the requirement to have health coverage, but Trump let them down.
I urged progressives to speak to “working-class discontent.” The subtitle read: “It’s the one way to mobilize Blacks, Hispanics, and Asians, not just white workers.”
The White House and congressional Democrats barely talk about addressing the cost of living and continue to boast about the historic low unemployment and good-paying jobs they are creating.
President Biden said in a statement on August 19, “Americans all across the country are back at work in record numbers. 22 states—a record high—have unemployment rates at or below 3 percent, and 14 states now have their lowest unemployment rate on record … My infrastructure law and CHIPS and Science law are already bringing investments to make more here in America and create good jobs, and the Inflation Reduction Act will build on that even further.”
In the spring, the president was saying, “But because we took action, we created 6.5 million jobs just last year—more jobs than ever created in one year in the United States of America. More jobs. And people got pay increases. And it hasn’t stopped.”
But working people right now are being slammed by the surging prices that overwhelm any wage gains. And Hispanics and Blacks are the poorest, and therefore the hardest-hit. If you would see these voters, it wouldn’t take a brain surgeon to figure out that they need money.
Republicans simply would not fail to talk about any tax cuts they passed on their watch, especially ones designed for working-class voters. Republican governors as we speak are competing to cut taxes and send money back to households.
It is time to shake up Democratic leaders and their campaigns on the politics of the Child Tax Credit. They need to be reminded that the politics works.
To get their attention, I am testing this overall Democratic message for November that has Democrats contesting on the cost of living—and not hoping they win this election on abortion, guns, and Trump’s threat to democracy.
Democrats say people are living paycheck to paycheck and working people haven’t seen a real pay increase in years. Those in Washington don’t get it. The big corporations and billionaires and their lobbyists are calling the shots. Democrats gave tax relief to the poor, working families, and the middle class, reduced health care, prescription drug and energy costs. With inflation killing people, they are going after the monopolies and price gouging. Republicans get their money from big oil and the drug companies, and they oppose tax relief for working people and raising taxes on billionaires. Democrats believe your hard work should be rewarded, and we grow the middle class again.
The expanded Child Tax Credit will not be a high priority unless progressives battle for it. There are business-related “tax extenders” passed every year, and business groups are usually successful in getting them extended. Progressives should make extending the Child Tax Credit the price for Congress going home.
Rosa DeLauro may be right and Democrats won’t prioritize kids unless pestered. The members of the House caucus who think Democrats failed on extending the expanded Child Tax Credit, and so this is hardly an accomplishment to highlight, may also be right. And I may be right that Democrats do not usually focus on working-class economic discontent, and thus seem reluctant to contest the rising cost of living—the top issue for voters.
But Democrats, for a brief moment, enacted transformative policies, and they will not be remembered for this unless they actively make the expanded Child Tax Credit central to their message and agenda.
