Millions of kids were thrust back into poverty after the child tax credit expired in December, and progressive Democrat Lisa McCormick is calling on Congress to reinstitute the measure to give parents the help they need and spare American children from misery and hunger.
“Children living in poverty have worse health, fewer skills, and inferior scholastic achievement, so when they reach adulthood, they complete less schooling, secure lower-paying unskilled jobs, and exhibit more criminal behavior,” said McCormick. “There is no doubt that alleviating poverty in early childhood is not only humane, but it is a wise investment in America’s future.”
The temporary expansion of the child tax credit expired Dec. 15, which resulted in an increase in childhood poverty from 12 percent to 17 percent in January, the highest since December 2020.
“Black and Latino children were hit harder, with poverty rising to 1 in 4 kids,” said McCormick. “Americans must reverse course to make our economy work for everyone, but in the immediate moment, Congress must reinstitute the child tax credit.”
More than 1.7 million New Jersey children were eligible to receive the credit and payments to families in the state totaled more than $5 billion.
“During the pandemic, the expanded child tax credit kept child poverty rates lower than what they would have been, and there is evidence that this reduced youth psychiatric disorders, drug abuse, and crime participation as well as increased high school graduation rates,” said McCormick. “Being free from poverty in children has magnified educational achievement, increased income earnings, and improved cardiovascular health in adulthood.”
The American Rescue Plan, signed into law on March 11, 2021, expanded the Child Tax Credit for 2021 to get more help to more families. It has gone from $2,000 per child in 2020 to $3,600 for each child under age 6. For each child ages 6 to 16, it’s increased from $2,000 to $3,000.
The Child Tax Credit provided monthly payments to families, even those who do not file taxes or earn an income, and it had no impact on anyone’s eligibility for other federal benefits.
The tax filing season saw refundable credits boost family income for those who receive them, but these were temporary effects.
The Earned Income Tax Credit and the Child Tax Credit helped millions of families across the United States and contributed to a decline in the monthly poverty rate in March 2022.
Columbia University’s Center on Poverty and Social Policy found that the overall monthly poverty rate fell from 14.4% in February 2022 to 10.8% in March 2022. For children, the monthly poverty rate fell from 16.7% in February 2022 to 9.9% in March 2022.
“The power of what the child tax credit did was getting funds directly to those kids who need them — there is simply no policy that is as effective as that,” said Andrew Stettner, a senior fellow at The Century Foundation. “The reductions were historic and it is criminal that it’s so controversial to take a simple step to rectify the inequality our modern economy causes.”
A 2019 study by the National Academy of Sciences, commissioned by Congress, found that the United States could cut poverty in half and increase the hiring of low-income workers by more than 400,000 by expanding four existing programs.
It would take just $90.7 billion annually to expand the child and dependent care tax credit, the earned income tax credit, the housing voucher program, and SNAP benefits (formerly known as food stamps), while the estimated annual cost of child poverty in the U.S. is as much as $1.1 trillion.
“Families who are no longer receiving tax credits since the expansion expired in December have been struggling to make ends meet,” said McCormick. “That is why Congress must act to reinstate the expanded Child Tax Credit.”