Tag Archives: child poverty

Child poverty seeing a spike

Child-Poverty-Spike

Important Takeaways:

  • What’s Behind the Spike in Child Poverty in the U.S.
  • An uptick in the number of children living in poverty had been widely expected, because of the expiration of the enhanced version of Child Tax Credit program (CTC) that had been instituted in July 2021 as a means of defraying the financial burden that the stay-at-home measures had imposed on parents. The CTC gave parents a historically high yearly tax credit of up to $3,600 per child, depending on age, which was often paid upfront monthly and did not have to be paid back if the parents’ tax bill didn’t reach a certain amount.
  • While an increase was expected, advocates for children were surprised by the size of the jump and seized on the moment to trumpet the effectiveness of the policy and to mourn its expiration at the end of 2021, after Congress failed to extend the CTC expansion. “This data once again highlights that poverty in our country isn’t a personal failing, but rather a policy choice,” said Melissa Boteach, vice president of income security at the National Women’s Law Center in a statement. “Lawmakers have the power to lift millions of women and children out of poverty if they would just choose to prioritize families over their wealthy donors. We know what works.”
  • Other policy advisory organizations, however, worried that the benefits were too generous and would provide a disincentive for parents to work and thus push children further into poverty.

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Biden sees U.S. child tax credit as ‘giant step’ to counter poverty

By Andrea Shalal and Trevor Hunnicutt

WASHINGTON (Reuters) -Some 35 million American families have started receiving their first monthly payout from the U.S. government in an expanded income-support program that President Joe Biden said on Thursday could help end child poverty.

Under the Child Tax Credit program that was broadened under Biden’s COVID-19 stimulus, eligible families collect an initial monthly payment of up to $300 for each child under six years old and up to $250 for each older child.

Payouts made to families, covering nearly 60 million eligible children, totaled about $15 billion for July. The payments are automatic for many U.S. taxpayers, while others need to sign up.

Biden wants to extend expanded, monthly benefits for years to come as part of a $3.5 trillion spending plan being considered by Senate Democrats, who expect strong Republican opposition to the full bill.

“It’s our effort to make another giant step toward ending child poverty in America,” Biden said in a speech. “This can be life changing for so many families.”

The Child Tax Credit is being likened to a universal basic income for children, although it has income limits. It is expected to help people meet monthly expenses from rent to food and daycare.

The Center on Poverty and Social Policy at Columbia University estimates the expansion can reduce the U.S. child poverty rate by up to 45%.

Critics say the expanded credit is expensive and may discourage people from working. Some experts say it may not reach some of the poorest Americans who are not in the tax system.

The Democrat-backed $1.9 trillion COVID-19 legislation known as the American Rescue Plan enacted in March increased how much is paid to families under the program.

The law made half of the tax credit for the 2021 tax year payable in advance by the Internal Revenue Service in monthly installments from July through December this year.

Biden proposed making the monthly advance payments permanent and maintaining expanded benefits through 2025 at least.

(Editing by Sonya Hepinstall and Edmund Blair)