Child tax credit provides financial salvation

Michelle Singletary says Congress must expand the payments to keep millions of children from slipping back below the poverty line.

WASHINGTON — Unless Congress acts, the last of the advance child tax credit payments will hit bank accounts on Dec. 15. The end of these monthly payments will financially devastate many American families, pushing them back into poverty.

“Millions of children who spent last Christmas in poverty will not bear that burden this holiday season,” President Joe Biden said in a recent briefing about the effects of the expanded child tax credit.

That wasn’t political hyperbole. Increasing the payments and extending them to more low-income parents made available an additional $77 billion to feed, clothe and provide for more than 61 million children, Treasury Secretary Janet L. Yellen said during a Senate hearing last month.

“Food insecurity among families with children dropped 24 percent after the July payments, which is a profound economic and moral victory for the country,” Yellen said.

An estimated 9.9 million children are at risk of slipping back below the poverty line or deeper into poverty if the child tax credit expansion is not extended, according to a report by the Center on Budget and Policy Priorities

The American Rescue Plan temporarily boosted the child tax credit — just for the 2021 tax year — to $3,600 for children 5 and younger and $3,000 for those 6 through 17. The pre-pandemic maximum was $2,000 per child under 17.

The law also expanded the payments to families with low or no income, providing financial salvation for families, many still reeling from coronavirus-related job losses. The IRS and community groups are still trying to find families who — because they don’t have enough income to be required to file a federal tax return — don’t know they are entitled to the payments.

From late July through September, about half of families receiving the child tax credit payments reported spending at least part of that money on food and about 4 in 10 spent it on rent, mortgages or utilities, according to the Census Bureau.

If all families with eligible children receive the payments, child poverty would be reduced by up to 40 percent, according to researchers at the Center on Poverty and Social Policy at Columbia University.

With monthly payments ending soon, Congress has a choice — keep the money coming or go back to the way things were.

As the Center on Budget and Policy Priorities points out, a mother of two — one a toddler and the other elementaryschool age — who works full time earning the federal minimum wage is now eligible for a $6,600 child tax credit. If the expanded payments end, they would see a credit cut of $4,800.

Biden’s Build Back Better legislation would extend the enhanced credit for another year, through 2022. That oneyear extension was part of a compromise. It’s something, but not enough. If Democrats lose control of the Senate or the House in next year’s midterms, the future of the expanded child tax credit could be dire. Among the complaints from conservatives is that the expansion to low-income households would diminish their desire to find employment.

A research brief released by the University of Chicago contends that the expanded child tax credit would reduce employment by 1.5 million people. This would diminish the effect on child poverty, the paper argues. In an opinion column for the Washington Post, the authors write, “Replacing a tax credit available only to working families with a flat allowance will serve as a disincentive to work.”

Sen. Joe Manchin III, D-W.Va., shares this concern.

“There’s no work requirements whatsoever,” Manchin complained during a CNN interview. “There’s no education requirements whatsoever for better skill sets. Don’t you think, if we’re going to help the children, that the people should make some effort?”

Manchin’s political viewpoints on this issue lack context and compassion.

The arguments against the expanded child tax credit remind me of the cautionary aphorism, “Don’t let the perfect be the enemy of the good.”

It’s not a matter of people not wanting to work. They often do have jobs, but their paycheck isn’t enough to cover their needs, or they may leave the workforce because a great percentage of their pay is spent on child care. Or, they have caregiving challenges. Without taking on debilitating debt, many people can’t afford to go to college and boost their skill sets.

Many of the folks who are getting these payments are grandparents on low fixed incomes taking care of grandchildren. They aren’t deadbeats sucking on the teat of the government.

Nelson Mandela said, “The true character of a society is revealed in how it treats its children.”

We’ve gained some ground putting children first. Let’s not stop now.