A Year After Biden’s American Rescue Plan, Kids Are Falling Back Into Poverty. Congress Is To Blame.

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During the darkest days of the pandemic, Congress stepped up and provided people with the stimulus checks they needed to get by — and that our economy needed to stay afloat. This experiment — giving people cash to spend on food, fuel, rent and other basics — showed the public that they could trust the government to be there for them during hard times.

As we approach the one-year anniversary of the American Rescue Plan, the progress we’ve made is in jeopardy.

Last March, President Joe Biden and Democrats expanded the wildly popular child tax credit program, providing working families with up to $3,600 annually for every kid and transforming the benefit into an automatic monthly payment instead of a once-a-year line item on your tax return. President Biden also reversed the previous administration’s discriminatory restrictions on who received the payments, giving half of Black and Latinx children access to this vital support for the first time.

Like the stimulus checks, expanded child tax credit payments were overwhelmingly successful.

In December, the monthly cash assistance program lifted nearly 4 million children out of poverty. Hunger fell by more than 25%. If the tax credit had been extended through 2022, it would have cut child poverty nearly in half.

Though Democrats hoped to extend the monthly payments for another year as part of the Build Back Better Act, they lacked enough votes for the legislation to pass — thanks in part to the resistance of Sen. Joe Manchin of West Virginia. The loss of these payments has had a devastating impact on families. A new study from Columbia University shows 3.7 million children have fallen back into poverty in just two months; a staggering 10 million children are at risk of falling back or deeper into poverty.

The monthly child tax credit showed that the government is competent and can do big things. Just months after Congress created this entirely new program, the IRS implemented it and distributed payments to families of nearly 60 million children in July. Because of its experience with stimulus checks, the IRS was able to distribute the payments automatically to most families. More work was needed to ensure other families signed up, but the IRS avoided the chaotic rollout naysayers predicted.

In addition, at a time when all families are facing increased costs at the fastest clip in four decades, the child tax credit can offset rising prices on essential goods.

Unfortunately, just as both inflation and the omicron variant surged, Congress allowed the child tax credit to expire. Parents who thought the government had thrown them a lifeline found it cruelly ripped away. Data from the Census Bureau estimated that nearly 9 million people had to call out sick last month due to omicron, many of whom likely had no access to paid leave or sick time and simply lost out on their wages. But instead of a monthly payment on Jan. 15, families impacted by the surging pandemic received nothing. And these parents have continued to get nothing as inflation rose to the highest point in 40 years.

The ramifications of allowing the child tax credit to expire are starting to be seen both in parent’s pockets and in the data. According to a recent report from the Columbia Center on Poverty and Social Policy, the child poverty rate rose 41% from December 2021 to January 2022, with the largest percentage point gains in poverty falling on Black and Latinx children. Last June, right before the first batch of payments, the child poverty rate was a little under 16% and almost immediately in the next month that rate fell to nearly 12%.

The absence of child tax credit has resulted in the highest number of children living below the poverty line since December 2020.

Outside the numbers, the expiration of the child tax credit will continue to perpetuate the pervasive notion that government doesn’t work, and that politics is a waste of time. Pew Research puts Americans’ trust in government at around 20% — a number that’s been that low for a decade. It’s easy to see why.

Repairing that damage and getting people to believe in America again is essential, and it was central to Biden’s 2020 pitch: If you can demonstrate that the government can actually help people, you can start to restore faith in institutions. You start by doing things that people will see and feel in their everyday lives.

Early data suggests that child tax credit was already inching us toward repairing trust. As a recent Data for Progress survey revealed, families receiving the payments were 4% more likely to approve of Biden and Democrats. What’s remarkable is this effect was consistent across party lines, even among Trump voters. Seventy-seven percent of parents who were receiving the child tax credit — tens of millions of people — supported it.

Among communities of color, there might’ve been even more reason for optimism. According to Pew Research, trust in government is up 8% among Hispanic people this year. For the Black community, it’s more than doubled: from 15% to 37%. One must believe this hopeful direction hangs in the balance.

Just imagine explaining to a parent who came to rely on the monthly tax credit payment why the checks were cut off. You can toss out all the “pay-fors,” “parliamentarians,” “filibusters,” and “Byrd baths” you want. The only thing that matters is that the government screwed up something in their life. And that’s all they’ll remember when it comes time to vote.

The project of restoring the American people’s faith in government needs Sen. Manchin and the White House to find a path forward. You start by passing a bill that invests directly in people. You open the doors and invite more people to participate in democracy. You make good on your promises.



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