If you could prevent millions of children from falling back into poverty, would you? I imagine most of us would answer “yes” without hesitation.
But not Congress. For nearly a year, lawmakers in Washington, DC, have stalled on a policy directly responsible for last year’s dramatic drop in poverty. It’s time for Congress to bring back the Enhanced Child Tax Credit.
new US Census Bureau’s Poverty Statistics There is no doubt that we can end poverty if we decide to do it. In 2020, the child poverty rate was 9.7%. By 2021, this is down to just 5.2% – a 46% drop. This is the largest year-on-year decline ever recorded. In the blink of an eye, 2.1 million children in our nation are no longer below the poverty line.
The reason for the sharp decline in childhood poverty is clear. It is the result of reforms to the child tax credit included in the last federal pandemic relief package passed by Congress in March 2021.
Congress strengthened the child tax credit in several ways. First, it increased the amount of cash available to households from credit. Lawmakers restructured the credit so that low-income families could take full advantage, just as middle-class families could. Ultimately, the benefits of the Child Tax Credit came in monthly installments, in one lump sum after families filed their tax returns, thus helping them better manage their monthly bills.
These reforms to the Child Tax Credit proved to be a powerful tonic to the financial problems plaguing families struggling to get by on low wages. Most of the money went to pay Essentials like food, utilities and rent. The tax credit helped families cover expenses related to their children’s education, such as school books and supplies, tuition and after-school programs. These uses are particularly obvious In the case of Black, Latino and other families of color.
One hitch with the plan is that the reforms to the child tax credit are temporary. The changes were finalized in January this year. And so far, Congress has yet to reinstate this more effective version of the child tax credit.
The end of the Enhanced Child Tax Credit comes at a particularly bad time for families surviving on low wages. Prices of food, rent and other essentials have been rising rapidly since last year. While higher-income households have room to absorb price increases, lower-income households have no wiggle room. They already do so little to get by. At the very least, a strong child tax credit would help families with children keep up with the rising cost of essentials.
A long-term, strong Child Tax Credit offers to transform the lives of our most vulnerable children. There is overwhelming evidence that growing up with economic insecurity — without reliable access to basics like food, shelter or health care — harms children. Children who experience poverty have worse outcomes in everything from physical and mental health, to school performance, to earnings as adults. By strengthening families’ financial security, the Child Tax Credit helps children reach their full potential.
But now, millions of children are falling back into poverty due to Congress inaction. Even though there is a proven solution at hand, the Congress is standing idly by as the children suffer needlessly.
Congress still has a chance to redeem itself. The anticipated year-end budget bill is the perfect opportunity to bring back the enhanced child tax credit. Every member of Oregon’s congressional delegation must push hard to make sure Congress does right by our nation’s most vulnerable children.
Evidence gathered over the past year has removed any shred of doubt that poverty is a policy option. It is not necessary either. It is the Congress leadership’s failure to send millions of children back into poverty.