Last summer and through the autumn, Jason DeParle—a NY Times reporter and long chronicler of the devastation wrought when, in 1996, welfare reform eliminated Aid to Families with Dependent Children—made the case (here and here) for augmenting the Child Tax Credit as the best way to reduce child poverty in the United States. In a long piece in July for the NY Review of Books, DeParle explained why reforming the Child Tax Credit is the key to reducing the alarming incidence of child poverty in the United States:
“In talking with scholars over the past year, I’ve been struck by how many substantive reasons there are for focusing on poor kids—even more now than three decades ago. Neuroscientists have shown that much of a child’s developmental trajectory is set during the first few years of life, before children even start school. Economists have shown that even a brief episode of poverty, especially in early childhood, can have life-long consequences—leading to fewer years of education, lower earnings, and worse health in adulthood. It’s also become harder to excuse America’s exceptional child poverty by arguing that the U.S. enjoys exceptional mobility compared to other rich countries…. Research suggests the American advantage in class fluidity has declined or disappeared….”
During the Trump administration, with the conservative Republican lock on the U.S. Senate, and through the fraught post-election season, it seemed to me pretty hopeless to even post a blog about the need to help our nation’s poorest children, even though I know that American child poverty is appalling and that our society’s alarming rate of child poverty is a pertinent topic for a blog about public education. After all, our society holds public schools accountable according to aggregate standardized test scores, which are known to reflect primarily family and neighborhood economics rather than school quality. As education historian Jack Schneider and Jennifer Berkshire explain in their new The Wolf at the Schoolhouse Door: “Today more than twenty states have implemented some version of an A-F grade scale for schools. But…. Giving A ratings to schools solely on the basis of student test scores, which closely correlate with student demography, means that the wealthiest, whitest schools earn the top grades, while high-poverty schools get Ds and Fs. ‘A is for Affluent‘ is how the Dallas News summed up school letter grades in Texas.”” (The Wolf at the Schoolhouse Door, p. 144)
Suddenly, however, President Joseph Biden has made eradicating child poverty one centerpiece of his domestic policy agenda—beginning with his $1.9 trillion COVID-19 relief proposal. The Senior Director of Federal Tax Policy at the Center on Budget and Policy Priorities, Chuck Marr explains: “President Biden’s $1.9 trillion emergency relief plan includes a Child Tax Credit expansion that would lift 9.9 million children above or closer to the poverty line, including 2.3 million Black children, 4.1 million Latino children, and 441,000 Asian American children. It also would lift 1.1 million children out of ‘deep poverty,’ raising their family incomes above 50 percent of the poverty line. To do that, the Biden plan would make the credit fully available to 27 million children—including roughly half of all Black and Latino children—whose families now don’t get the full credit because their parents don’t earn enough….” Take a look at Marr’s list of workers who now fail to qualify for the full Child Tax Credit but whose children would benefit under Biden’s plan: retail sales workers, home health aides, cooks, child care workers, agricultural workers, medical assistants, bus drivers, meat processing workers, and dishwashers.
In his New York Review of Books piece, DeParle reminds us which families currently benefit from the Child Tax Credit: “The largest federal expenditure on children comes through the child tax credit, which has expanded rapidly with little public notice and largely leaves out the poorest families. The Republican tax bill of 2017, Donald Trump’s most notable domestic achievement, doubled its value to 2,000 per child and extended it to families with annual earnings as high as $400,000… But because it phases in as earnings rise, the neediest get the least benefit: a single parent with two children needs to earn about $30,000 to qualify. About 35 percent of children fail to receive the full credit because their parents earn too little. A quarter receive a partial payment, and 10 percent get nothing. Among those failing to receive the full amount are half of Latinos, 53 percent of blacks, and 70 percent of single mothers.”
Writing for the Brookings Institution, David Wessel explains how the Child Tax Credit, passed by Congress a quarter of a century ago, works right now: “Families currently are eligible for a tax credit of up to $2000 per child under age 17… Eligible families can claim a tax credit—which reduces income taxes they owe dollar-for-dollar—of up to $2,000 per child under age 17 who is a citizen of the US. The size of the credit is reduced by $50 for every $1,000 of adjusted gross income above $200,000 for single parents and $400,000 for married couples. Families who owe little or no income tax can get cash of up to $1,400 per child, a feature which makes the tax credit partially ‘refundable,’ in the jargon of Washington… Although important to the low-income families who get it, and often promoted as a way to fight poverty the Child Tax Credit is not targeted at those families, particularly after the changes made in 2017. About 40%… will go to households with incomes above $100,000.”
Wessel outlines the changes President Biden has proposed in his COVID-19 stimulus package: “President Biden would increase the credit from $2,000 to $3,600 for children under age 6 and to $3,000 for children under age 18, and he would make it ‘fully refundable,’ meaning that low-income families would get the full amount even if they don’t owe any income taxes. He proposes to do this only for one year, reducing the price tag, but fans of the tax credit both inside and outside the Biden administration say they hope the expansion would be renewed after the first year… Senators Mike Bennet (D-CO) and Sherrod Brown (D-OH) and Representatives Rosa DeLauro (D-CT) and Suzan Delbene (D-WA) have introduced legislation, the American Family Act, that would expand the Child Tax Credit from $2,000 to $3,000 per year for children between the ages of 6 and 16, and to $3,600 for younger children—and make it fully refundable.”
For the NY Times last August, Jason DeParle reported that last year Congress commissioned the National Academies of Science, Engineering and Medicine to study U.S. child poverty and make recommendations for addressing it: “Congress asked the academies what it would take to cut child poverty in half. The panel considered the expansion of 10 programs including job training, housing aid, child care, food stamps, and the earned-income tax credit. None reduced child poverty nearly as much as creating a child allowance. An annual payment of $3,000 per child would lift at least 38 times as many children out of poverty than an increased ($10.25 an hour) minimum wage. Advocates would pay it monthly, to temper damaging income swings like those hitting families today. ‘If I had to pick one policy, I would put my bet on a child allowance,’ said Greg J. Duncan, an economist at the University of California, Irvine, who led the academies’ study group.”