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Imagine a program the federal government could lift millions of American children out of poverty. The program will help parents put nutritious meals on the table, pay for tuition, and even save for their children’s college — all without negatively impacting the economy.
You don’t have to imagine. We only had it last year…now we don’t have it.
through almost all empirical measurements, the expanded Child Tax Credit (CTC) — a policy passed in 2021 that provides parents with a few hundred dollars a month for every child in every family — has been a resounding success, dramatically reducing child poverty, and Makes it easier for families to buy food and pay housing and utility bills.In conjunction with other COVID-19 relief measures, especially during April 2020, January 2021 and March 2021CTC helps households buffer the economic turmoil of the pandemic.
Few researchers can say with certainty that programs like CTC actually work. Politicians often think about policy in an abstract, hypothetical way, knowing that a piece of legislation may not achieve their goals. But when Congress considered expanding the CTC, there was a trove of cold, hard data that the program was doing a lot to help children and families.
Yet that wasn’t enough to save it. The expanded tax credit ends in December 2021, with little chance of renewal. This tells you everything you need to know about which is stronger in Washington – politicians’ bias or actual evidence.
By the time the pandemic hit, reformers had been pushing for years to create a universal allowance for families with children in the United States. many other rich countries provide some kind of comprehensive financial support to parents and, not coincidentally, these countries also have Lower child poverty rates.
But the eventual upheaval — a global pandemic — prompted U.S. lawmakers to act. Spring 2021, Democrats in Congress have turned CTC, an anti-poverty measure Part of the tax code since 1997, which becomes an emergency child benefit. Unlike the original version that parents receive in one lump sum when filing their taxes, the expanded CTC is paid monthly. From July to December last year, most parents of children under the age of 6 received $300 per child per month, and most parents of children between the ages of 6 and 17 received $250 per child per month. The new payments are more generous: Families can receive up to $3,600 per child per year under the expanded CTC, compared to just $2,000 under the original. While the original CTC was primarily for middle-class families, more parents were eligible for the expanded program.
Government schemes are often glitchy at the start, but the fact that most households are eligible for payments means they are fairly easy to administer. The IRS already provides anyone who filed their child’s taxes in the previous year with all the information they need—no additional filings or forms to fill out.Payment Direct access to recipient’s bank account Or they get a check in the mail with little fuss.
Money helped a lot – a lot.Beginning July 15, the vast majority (88%) of households with children received payment $300 or $250 per child.Researchers at Columbia University’s Center for Poverty and Social Policy found that July payments Lifted some 3 million children out of poverty. By the end of 2021, Researchers estimate The program lifted 3.7 million children out of poverty.
“Families are living in a very precarious economic environment,” said Megan Curran, one of the researchers in the Columbia team. “$300 or $600 a month — that might not sound like much, but it’s enough to give you a financial cushion when you’re making very little.”
The reduction in child poverty was a major finding in the headlines. But those payments also help in other ways. many kinds of survey It was found that most parents spent their money on necessities such as food, rent and bills.
Low-income parents are especially likely to spend money on basic needs. Some Learn established Few households reported that they did not have enough food once the money started to arrive. “The most commonly reported expenditure is food,” Curran said. “After that, it’s the basic bills — the very basic things that these families need.” But the money also came in handy. When the school year begins, about one-third of parents Those who receive CTC payments use at least a portion of it for school supplies.Another study found that most parents plan save some money rainy day.Some say they’ll spend money on tutoring for their kids – maybe help offset some learning loss More than a year of school closures.The sums helped some families get yourself out of debt or escape deportation.
The findings were particularly striking because the money had no strings attached. Parents can spend as much money as they want.Although politicians long-term suspicion If we just give people money, they will run out to buy drugs or cigarettesFamilies are most likely to spend money in ways that directly benefit their children.
Of course, scaling up payments can also have downsides. For years, some economists have worried that providing child allowances to all families — whether parents work or not — would give some people an excuse not to work. A study published A few months after CTC’s expansion, the move is estimated to offset some of the payment benefits by prompting 1.5 million workers to quit and leave the workforce. In an October opinion column, the study’s two co-authors argued that, based on their findings, expanding the CTC more harm than good.
This doesn’t seem to be what happened. when other economists look at Based on real data at the end of monthly payments, they found that only a small percentage of parents said they had left their jobs. These are balanced by another group of parents who started working after the expanded CTC went into effect — perhaps because they suddenly had enough money to pay for childcare.
The researchers sliced ??and diced the data, looking for any negative effects on the economy. It’s not there. “We cut it in any way, we just don’t see the impact on whether parents work,” said Elizabeth Ananatis a professor of economics at Barnard College and a co-author of one of the studies. “This is in stark contrast to all the work on poverty and material hardship where we’re seeing huge impacts.”
But for one man who controls the fate of the expanded CTC, the evidence does not seem convincing: Democratic Senator Joe Manchin.By the fall of 2021, when Democrats Considering renewal payment As part of a sprawling social policy bill, it’s clear it won’t have bipartisan support. That means the expanded payments are due at the end of the year if a moderate Democrat defected. Manchin thinks the payments are too broad.He believes that parents should not be eligible unless they have a joband he wants parents to qualify for a much lower income cap.
There is some logic to his reasoning – the payment shouldn’t stop people from working, it should go only to the poorest households. But experts tell me these changes won’t actually translate into better money. complex formula Determining eligibility can keep money out of those who need it most. Aside from the fact that the parent didn’t leave the job because of the payment, the job requirement can backfire. “It’s the equivalent of kicking someone when they’re down,” Ananat said. “You could have a sick child and have to stay home for a day and then lose your job. Then you can’t pay for childcare to go out and interview for a bunch of new jobs.”
Manchin disagreed.By the end of 2021, he Reportedly told other senators Without strict limits, parents would spend their money on drugs — despite plenty of evidence to the contrary.Democrats’ Social Policy Bill Died in the Senate in Decemberthe final round of expanded payments went to families in the same month, with no sign of renewal in sight.
The impact of losing money is as huge as gaining it. January and February, families with children more likely to say They are struggling to pay household expenses. Child poverty is on the rise.parents report struggling Pay for diapers and child care. Politics/Morning Consultation Polls A study conducted in February found that 75% of those who benefited from an expanded CTC said losing money would affect their financial security.
Meanwhile, researchers like Ananat stand aside in frustration, wondering how such a successful project could come to nothing. “It breaks my heart that we can really understand what policy does,” Ananat said. “Now we have the answer. It just helps kids. That’s all it does. Then they let it go.”
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