Biden’s Relief Package Moves Along—Including Child Tax Credit to Ameliorate Child Poverty

Last week, while America was reliving the January 6, 2021, insurrection at the Capitol and listening to an impeachment trial in the U.S. Senate, the U.S. House continued marking up President Joe Biden’s proposed $1.9 trillion COVID relief package. In a society that has, over the past four years, not even managed to name widespread child poverty as a problem, the new President has—by  getting to work and immediately proposing a comprehensive COVID relief package—managed entirely to change the national conversation. I clipped seven different articles last week alone on Biden’s proposed provisions to reduce child poverty.

First Focus on Children’s Bruce Lesley explains: “(T)here were 12 million children in the United States living in poverty in 2019… Even before the pandemic and recession, the kids were not alright. In an international comparison, our nation is well behind other wealthy nations in a report by UNICEF on dozens of child well-being measures, including child poverty and child mortality.  In that report, the United States ranks… 36th out of 38 countries—behind countries like Romania, Estonia, Slovakia, Latvia, Greece, Poland, Lithuania, and Malta.”  Leslie points out that 31 percent of U.S. children live below the poverty line.

Leslie highlights a key provision in the President’s proposed COVID-19 relief plan, “What stands out is the Biden-Harris proposal to make the Child Tax Credit fully refundable to help… one-third of all our kids… whose parents make too little to qualify for the full child benefit, which is $2,000 annually under current law. The legislation also raises the amount of the Child Tax Credit to $3,600 to families with children 5 and under ($300 per month) and $3,000 to families with children 6-17 years-of-age ($250 per month).”

The Child Tax Credit is exactly that: a tax credit. It works by reducing a parent’s federal income taxes leaving more earned income to be spent on the needs of the family. But if a parent’s income is too low, that parent cannot benefit from the full amount of the credit as higher earning parents do.  Biden’s proposal, now marked up by the House, would make the child tax cut fully available to all parents—“fully refundable” in the jargon of Congress.

In a new brief last Wednesday, the Center on Budget and Policy Priorities explains the proposal for increasing the Child Tax Credit in the relief bill the House Ways and Means Committee has marked up: “Some 27 million children—including roughly half of all Black and Latino children and a similar share of rural children—receive less than the current maximum $2,000-per-child tax credit because their parents earn too little, even as middle-and higher-income families get the full amount. The proposal would make the full Child Tax Credit available to children in families with low earnings or that lack earnings in a year, and it would increase the credit’s maximum amount to $3,000 per child and $3,600 for children under age 6.  It would also extend the credit to 17-year-olds. The increase in the maximum amount would begin to phase out for heads of households making $112,500 and married couples making $150,000. The proposal would lift 4.1 million children above the poverty line—cutting the number of children in poverty by more than 40 percent. The proposal also would lift 1.1 million children above half the poverty line (referred to as ‘deep poverty’).  Black and Latino children in particular, whom the current credit disproportionately leaves out or leaves behind, would benefit.”

The Center on Budget and Policy Priorities continues: “To see what this can mean to individual families, consider these examples:

  • A single mother of a toddler, who earns $10,000 a year providing in-home care to older people (with work hours that fluctuate significantly from month to month), now receives a Child Tax Credit of $1,125. Under the House plan, she’d receive $3,600, a gain of $2,475.
  • A single mother with a 4-year-old daughter and 8-year-old son, who is out of work for the year due to a health condition, now receives no Child Tax Credit at all, adding to the family’s financial insecurity. Under the House plan, she would receive the full Child Tax Credit of $3,600 for her daughter and $3,000 for her son to help with the children’s expenses.”

How has it come to be that one third of children in the United States live in families whose income is below the federal poverty line—$26,200 for a family of four?  Writing last week for the NY Times, Claire Cain Miller and Neil Irwin explain: “The United States is distinct among rich countries in thinking of children as, in many ways, an individual responsibility. Many European countries have family allowances as do Canada and Australia (most allowances are larger than the ones being proposed in the United States), as well as policies like public child care and lengthy paid family leaves. In the 1970s and ’80s, when women entered the work force in large numbers, the United States briefly considered the idea that the government and employers could play a big role in supporting family life, such as with public child care and flexible work hours. Instead policymakers settled on the idea—supported by an alliance of people who believed in small government and traditional family structures—that it was mostly the responsibility of parents, and not the government, to invest in children.”

The President’s proposal to increase the Child Tax Credit and make it fully refundable as part of the COVID-relief package would expire after this year. However,  in the last session of Congress, Senators Sherrod Brown (D-OH) and Michael Bennet (D-CO)  introduced  a more permanent solution—the American Family Act, which includes the very same provisions for increasing the child tax credit and making it fully refundable. Last week, Reps. Rosa DeLauro (D-CT) and Suzan DelBene (D-WA) reintroduced their companion bill in the U.S. House of Representatives.

We can assume that, through the reconciliation process, President Biden will soon be able to pass the COVID-19 relief bill. The bill’s passage will significantly but temporarily reduce child poverty by repairing the Child Tax Credit. We can hope that with Democratic majorities this year in House and Senate, Congress will pass the American Family Act to provide more permanent assistance for the millions of American children whose families struggle with poverty.

2 thoughts on “Biden’s Relief Package Moves Along—Including Child Tax Credit to Ameliorate Child Poverty

  1. Thank you, Jan, for pointing this out:

    “12 million children in the United States living in poverty in 2019… Even before the pandemic and recession, the kids were not alright. ”

    I hope that President Biden’s increased early childhood education funding is a start toward greater help for all public education and childcare programs.
    And then, public libraries, transportation, healthcare, and community colleges.

    Stay safe,
    -Shira

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