Because Congress Failed to Pass Build Back Better, Child Poverty Grew by 3.7 Million Children from December to January

A new February 2022 report from the Center on Poverty and Social Policy at Columbia University documents an alarming increase in child poverty since the U.S. Senate failed to pass the Build Back Better Bill and permitted important reforms to the Child Tax Credit to expire on December 31: “The overall monthly child poverty rate rose sharply between December 2021 and January 2022, from 12.1 percent to 17 percent—an increase of 41 percent.”

In the American Rescue Plan COVID relief bill, passed in the spring of 2021, Congress temporarily increased the per child amount of the Child Tax Credit, paid it out in monthly installments to help families living paycheck to paycheck, and made it fully refundable. Making the tax credit “fully refundable” means that families earning too little to pay a significant amount in income taxes could benefit from the full tax credit. The Child Tax Credit, established in 1997, has, until the brief 2021 temporary expansion, benefited middle and some upper income families but excluded those who have no income and paid a paltry amount to parents whose income is too low. The Center on Budget and Policy Priorities has called it “an upside-down policy.”

Last week, the New Yorker‘s Isaac Chotiner published an important interview with Sophie Collyer, the research director at the Center on Poverty and Social Policy at Columbia University. Collyer explains to Chotiner what the Center on Poverty and Social Policy has discovered based on data collected since December:

“We found that 3.7 million more children are in poverty as a result of rolling back the child tax credit between December and January. We’ve been measuring poverty over all and among children since the beginning of the pandemic, but using a monthly framework… It’s been a really useful tool for evaluating the impact of the expanded child tax credit in real time. Over the summer, with the initial payments, we saw an immediate reduction in the rate of child poverty, particularly because it was being paid out monthly for the first time and reaching about one in three children who were previously ineligible for the credit. So over the summer you’re seeing both the initial payments being paid monthly for the first time but also a much greater share of the child population being eligible for the credit. But it was only in effect in terms of monthly payments through the end of 2021. And the expansion of the child tax credit was only in effect for the calendar year 2021.”

Collyer explains to Chotiner the serious implications for Black and Hispanic children: “A big piece of the expanded child tax credit last year was that the earnings requirement associated with the credit was removed for 2021, and it was made fully refundable. The amount that you received was independent of your earnings… Before the expansion, many Black and Latino children were left behind when it came to receiving the full benefits of this credit—one out of two Black children and one out of two Latino children were ineligible for the full credit because of family income levels.”  The temporary changes in the Child Tax Credit ended in December, and Collyer continues. “Now, with the absence of the credit, we saw a 5.5 percentage point increase in the poverty rate of Black children and 7.1 percentage points for Latino children, translating to… nearly seven hundred thousand Black children falling into poverty and 1.3 million Latino children falling into poverty as a direct result of the credit being removed.”

Collyer elaborates on why she believes this program is particularly helpful: “It’s cash-based. So many social policies and social programs in the United States consist of in-kind transfers—housing subsidies, food stamps—and they’re infrequently cash. But with this you saw families receiving a cash payment, and cash is fungible. In one month, you might need it to fill in a food budget, but for the next month, it might be used to fix a car. Another month, it might help with child care. That flexibility is also something that comes out of the data, with families using it to meet needs that vary from month to month. I think that’s a really important takeaway in terms of the importance of cash in families’ lives and the importance of the monthly aspect of this.”

In a business column for the Los Angeles Times, Michael Hiltzik lauds last year’s temporary improvements to the Child Tax Credit and condemns the Congressional inaction that blocked support for Build Back Better: “The payments had a rapid and material effect on the child poverty rate, which fell from about 16% in June to about 12% in December. Then the monthly payments ceased, and the child poverty rate rebounded to 17% in January, its highest mark since January 2020. That increase translates to 3.7 million children added to the poverty rolls in just a single month… The Biden administration has been trying to convert the one-year Child Tax Credit (changes) into a permanent program, but that goal has been thwarted by Congress—specifically, by Sen. Joe Manchin III (D-W.Va.). Manchin has bizarrely drawn a line in the sand against the child credit, even though his state is a leading member of the child poverty hall of shame. In 2018, West Virginia boasted the fourth-worst rate of child poverty in the nation and fifth worst in extreme child poverty… The Republican Party has made stinginess a governing principle.”

Years of research document that children’s life chances and educational accomplishments all reflect their families’ economic circumstances.  The editors of a 2011 book, Whither Opportunity? Rising Inequality, Schools, and Children’s Life Chances, Greg Duncan and Richard Murnane, conclude the book’s introduction with this declaration: “We draw three conclusions: First, mindful of the biology of human development and the track record of proven programs, we must channel more policy dollars to enrich the early years of children born into poverty.  Second, we must improve the educational opportunities for children from low-income families at every stage of their development.  Third, we need a national policy debate about the consequences of economic policies that have permitted the growth of family income inequality that the nation has experienced in recent decades. Only if our country faces the consequences of growing income inequality will it be able to maintain its rich heritage of upward mobility through educational opportunity.” (Whither Opportunity? p. 20)

Regents Professor of Education Emeritus at Arizona State University and past president of the American Educational Research Association, David Berliner is even more blunt in his analysis: “(T)he big problems of American education are not in America’s schools. So, reforming the schools, as Jean Anyon once said, is like trying to clean the air on one side of a screen door. It cannot be done!  It’s neither this nation’s teachers nor its curriculum that impede the achievement of our children. The roots of America’s educational problems are in the numbers of Americans who live in poverty. America’s educational problems are predominantly in the numbers of kids and their families who are homeless; whose families have no access to Medicaid or other medical services. These are often families to whom low-birth-weight babies are frequently born, leading to many more children needing special education… Our educational problems have their roots in families where food insecurity or hunger is a regular occurrence, or where those with increased lead levels in their bloodstream get no treatments before arriving at a school’s doorsteps. Our problems also stem from the harsh incarceration laws that break up families instead of counseling them and trying to keep them together. And our problems relate to harsh immigration policies that keep millions of families frightened to seek out better lives for themselves and their children…  Although demographics may not be destiny for an individual, it is the best predictor of a school’s outcomes—independent of that school’s teachers, administrators and curriculum.”  (Emphasis in the original.)