Four Reasons the Expanded Child Tax Credit Should Be Permanent
2. It helps families afford basic needs.
There is no good time for the expanded Child Tax Credit to expire, but to let it happen amid a time of rising food and energy prices is particularly egregious. More than 90 percent of families with incomes below $35,000 spent the money on food, utilities, housing, clothes, and education, since families with no or low wages spend a greater share of their income on these staples. The real impact of this policy can be seen across the country. This is how families relied on this extra support:
● Donna and her husband are raising their two grandkids. They used the Child Tax Credit “to keep on top of the bills, food, clothes for the kids and for ourselves, shoes for the kids and us, the furniture.”
● Juliana and her husband have been hit hard financially throughout the pandemic, and her work as an ER nurse took an emotional toll on her and her family. She changed jobs as a result, but the subsequent decline in income has been a struggle in its own right. “[The monthly child tax credit] helps a lot. That little bump that it gives me every month [is how] I’m able to kind of keep afloat.”
● Pristine is a single mother of two children and also has been struggling financially during the pandemic. She is adjusting and learning how to juggle work and find (and afford) child care. “ … as far as with the child tax credit that I get each month … currently, I’m using it towards rent.”
Only last month, 42 percent of families reported difficulty in affording basic household expenses. As the stories above illustrate, the expanded credit was a lifeline for millions of families. And that lifeline is now gone.
3. It reduces food insecurity.
In 2020 (the most up-to-date data available), an estimated 38 million people in our country were food insecure. This is one in eight Americans, including almost 12 million children who do not have consistent access to enough food to live an active, healthy life. Black and Hispanic households experience food insecurity at almost triple the rate of White households.
Of all the essentials for which the expanded Child Tax Credit helped families pay, a state-by-state analysis reveals that food topped the list just about everywhere. In fact, advance Child Tax Credit payments were associated with a 26 percent reduction in household food insufficiency.
4. It produces an astounding return on investment.
Research shows that the $97 billion annual cost of a permanently expanded Child Tax Credit would be far outweighed by $982 billion in annual social benefits. This includes improved health and longer lifespans for kids, healthcare costs savings, and increases in future earnings, which drives a corresponding rise in tax revenue. In other words, an astounding 1,000 percent return on investment.
What Needs to Be Done
Our country should not stand for even one child living in poverty. Making the expanded Child Tax Credit permanent and ensuring that families with no or low wages remain eligible for the full amount should be an easy call. And we can do even more to maximize its potential by:
● Making it easier for the people at the lowest income levels to verify their eligibility, file tax returns, and receive payments.
● Repealing a provision of a 2017 law that makes children without Social Security numbers ineligible.
● Rejecting proposals that impose work requirements on eligibility, which would disproportionately affect children of color and those further from economic opportunity.
The expanded Child Tax Credit is more than just tax or fiscal policy. It speaks to whose lives we value and whether we can ever truly become a nation where every person has the opportunity to live the healthiest life possible. This is about people like Donna, Juliana, and Pristine who work so hard to support their families and deserve support to make sure their children grow up healthy. The fate of the expanded credit remains undecided. But whatever happens, this is one fight worth having.
Read more from my colleagues Rich Besser and Dolores Acevedo-Garcia in their op-ed for The Hill, What the Child Tax Credit Fight Says About America.