The United States cannot afford to be stingy with parents. Reinstate the expanded child tax credit

Child poverty is bad for the United States. And we are paying a terrible social and economic cost to allow this to continue.

Children who grow up in poor families are more likely to have difficulty in school, suffer from stress and have poor health, compared to children from families living well above the poverty line. A growing body of research has found that adults who grew up very poor tend to have lower incomes, rely more on public assistance, have more health problems, and are more likely to become entangled in poverty. criminal justice system.

A landmark 2019 report from the National Academy of Sciences estimated that child poverty costs the United States between $ 800 and $ 1.1 trillion per year due to reduced adult productivity, increased crime costs and health care costs. The United States has one of the highest child poverty rates among industrialized countries, and poverty is disproportionately high among children of color, accentuating systemic inequalities.

So it is deeply frustrating that one of the country’s most powerful tools to reduce child poverty – the expanded federal child tax credit – has been allowed to expire this month without even a vote in the United States Senate. .

From July to December, approximately 36 million households with more than 61 million children received monthly payments from the federal government of up to $ 300 per child. The long-standing tax advantage that was raised and broadened for a year as part of President Biden’s $ 1.9 trillion US bailout passed last March.

The president and many Democratic lawmakers intended to extend the more generous child tax credit for several years and make some provisions permanent through the “Build Better” bill. That hope was dashed – perhaps temporarily – last month when Democratic Senator Joe Manchin III of West Virginia, whose vote was crucial to passage, announced he would not support the bill. . Manchin cited the cost and details of the child tax credit as one of his concerns.

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All right, discuss the details. Even strong supporters of the child tax credit have recommended changes to make the expanded version more sustainable. But abandoning this transformational expansion of the child tax credit would be a terrible mistake and delay efforts to lift the next generation out of poverty.

The Child Tax Credit was passed in 1997 as a tax cut for the middle class. Over time and with bipartisan support, the value of the credit increased as well as who were eligible to receive it. As part of President Trump’s 2017 tax bill, Congress doubled the value of credit, but poorest families got nothing or only got partial credit because they didn’t earn enough to be entitled to the full amount.

The American Rescue Plan has increased the credit to a maximum of $ 3,000 for children ages 6 to 17 and $ 3,500 for children under 6, half paid in monthly installments and the other half paid in monthly installments. half at tax time.

And, most importantly, he made the maximum payment accessible to families with little or no income, turning the child tax credit into a powerful anti-poverty program.

And it worked.

In November, the tax credit kept 3.8 million children out of poverty, according to Columbia University’s Center on Poverty and Social Policy, reducing the monthly child poverty rate by 29.4% .

During the six months of payments, the researchers found that low-income families had higher checking account balances. As soon as the payments were made, there was a marked reduction in food insufficiency rates among low-income families.

Three in four families spent the initial payments primarily on food, bills, clothing, shelter, school and child care rather than saving money. Among families receiving food stamps, three-quarters said they used the child tax credit to pay late utility bills or prevent eviction or foreclosure. These are families who live in constant stress, month after month, to keep a roof over their heads and the flow.

In mid-fall, nearly 70% of families earning $ 75,000 or less said monthly payments “made them a lot or a little less stressed about money.”

And so far, researchers have seen no evidence that the monthly payments have caused parents to stop working, which is the main criticism from opponents of extending credit to poor families. Indeed, lawmakers Manchin and GOP have been pushing for work requirements to be a condition of the child tax credit.

What’s frustrating is that skeptics care more about theory possibility that a small number of people will choose not to work because of child tax credit payments rather than proven reduction of child poverty and hunger for six months of payments.

Most other wealthy industrialized countries offer family allowances to families to recognize that raising children is expensive and that there is a greater societal benefit in having healthy, well-cared for children. Unlike the United States, most countries ensure that poorer families receive the maximum benefit because they need help the most. It is time for this country to value and support families at all income levels by reinstating the expanded child tax credit and making it permanent.

This story originally appeared in the Los Angeles Times.