Permanently Expanding the Child Tax Credit Would Help Close Educational Opportunity Gaps

Those of us who support closing educational opportunity gaps have a lot on our plates right now.  We are watching states cut taxes instead of investing in teachers, counselors, and enriched curriculum.  It seems that momentum has slowed for ending the misguided scheme of high-stakes test-and-punish school accountability, and, based on test scores, states continue to rank and rate public schools and take over or shut down the so-called “failing” schools.  Laws condoning racism and anti-gay bias are winning in many state legislatures.  We are watching legislatures expand all kinds of private school tuition vouchers at the expense of their states’ public education budgets and watching the charter school lobby protest any kind of reasonable oversight of the largely unregulated, rapaciously greedy, privately operated charter school sector.

So, why do I think advocates for public education should work to support one more priority: pressing Congress to restore the expanded and fully refundable child tax credit that Republican senators along with Joe Manchin blocked when they derailed President Biden’s Build Back Better bill?

I’ll admit that for most of us who are focused on confronting the myriad challenges for the public schools, the complexities of addressing child poverty are not an area of expertise. But I think it is essential that we step back and consider David Berliner’s words: “(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.)

UNICEF statistics show that in 2018, 35 OECD nations had a child poverty rate lower than the rate in the United States. As advocates for the public schools that serve the mass of America’s poorest children, I think we ought to trust the experts who explain how best to ameliorate our nation’s outrageous child poverty. They seem to agree that one simple Congressional action—restoring the American Rescue Plan’s temporary expansion of the Child Tax Credit—would enormously reduce child poverty in the United States.

The Center on Budget and Policy Priorities’ Chuck Marr reports: “Last year’s expansion of the Child Tax Credit was a striking success, lifting an estimated 3.7 million otherwise-poor children (3 in 10) above the monthly poverty line in December 2021. The credit’s full refundability (ensuring that children with the lowest incomes get the full credit) was the main driver of its poverty reduction; making that provision permanent could have life-long positive impacts in health, educational attainment, and ultimate earnings power for millions of children.”

Until last year’s American Rescue COVID relief bill, families whose incomes were so low they did not pay enough in taxes to be refunded received only partial benefits from the Child Tax Credit. And if a family had no income and paid no taxes, the family received no Child Tax Credit whatsoever. In a more recent report, Marr adds: “Absent a new expansion, the expiration of the Rescue Plan’s expanded Child Tax Credit will push a projected 4.1 million children back below the poverty line in 2022, of whom 1.6 million are Latino, 1.2 million are white, 930,000 are Black, and 132,000 are Asian… (A)nnual poverty rates among Black, Latino, and American Indian or Alaska Native children would be an estimated 8 to 9 percentage points higher without the Rescue Plan expansion than if the expansion were still in place. The greatest driver of these rises in poverty would be the loss of the expanded credit’s full refundability. Accordingly making the full credit available to children in families with the lowest incomes would be key to reducing child poverty.”

Writing for The Hill, Albert Hunt identifies a widespread bias of many Americans: that poor people are basically lazy and will only waste the money: “Critics, many Republicans and Sen. Joe Manchin (D-W.Va.), have charged making it refundable would create incentives not to work. There are even charges that some recipients would spend the extra money on drugs rather than their kids.”

The Brookings Institution just confirmed the lie in that bias. Instead parents used the money primarily for food, basics, and paying down credit card debt: “Overall, our findings suggest that the expanded CTC supported eligible families in several critical ways. First, the credit allowed families to cover routine expenses, such as housing, food, utilities, clothing, and other essential items for their children while also helping families to save for emergencies and pay off debt. Because one of the primary uses of the benefit was on food, it is not surprising that the CTC significantly lowered eligible families’ food insecurity and helped them afford healthier, balanced meals for their children. Additionally, the CTC reduced overall economic insecurity for eligible households, as evidenced by their declining credit card debt, lower eviction risks, stronger rainy-day funds, and reduced reliance on payday loans, pawn shops, and selling blood plasma to make ends meet.”

It is to be hoped that Senator Manchin has noticed the Brookings study.  It has been widely reported in West Virginia’s newspapers.  The Intelligencer.Wheeling News-Register reported “The study also found that the monthly CTC payments to families did not encourage parents to not work, but likely led them to seek professional training and classes.”  “The survey indicated….  58%… had used the money for essential items, with 56% noting they had purchased additional food with the funding. Another 49% responded they had used the money for emergency savings, with 42% noting it was directed toward debt payment.”

A second new report from the Center for Law and Social Policy, the University of California at Berkeley, the Children’s Defense Fund, the Urban Institute, and other partner organizations describes how last year’s Child Tax Credit payments actually helped parents get to work: “During the phone interviews with respondents, parents commented how the monthly payments helped them afford transportation to get to work and covered the cost of child care that allowed them to work additional hours. One mom named Jasmin, who has two kids and lives in New Jersey, explained how transportation costs take up a large portion of her monthly budget… The monthly CTC payments provided her with more resources to pay for the transportation to get to and from her job.”

What about inflation?  Wouldn’t re-establishing last year’s temporary expansion of the Child Tax Credit drive more inflation?  Writing for the NY Times, Ezra Klein discounts this worry: “Nor is inflation a reason to leave children in poverty. Extending the expanded child tax credit would cost about $100 billion per year for the next few years—less than 0.5 percent of U.S. G.D.P.  And it could easily be paired with policies raising taxes or cutting spending elsewhere, making the overall impact on spending nil.”

The Center on Budget and Policy Priorities’ Chuck Marr backs up Klein’s judgment: “Rising prices are no reason for policymakers to delay or avoid taking action on critical policies such as extending the Child Tax Credit expansion. For struggling families, in fact, they make the task more urgent. The Rescue Act’s expansion of the Child Tax Credit would amount to roughly 0.5 percent of gross domestic product. It would provide extremely meaningful income support for millions of low-income families, but it would generate little or no inflationary pressure…. Policymakers need to act.”

The Washington Post‘s E.J. Dionne Jr. summarizes the depth of the need to support children growing up in poverty: “Our society claims to love children, admire parents and revere the family. But our public policies send the opposite message… It’s hard to think of work more important to a society’s long-term well-being and prosperity than raising children. Yet the market economy values work outside the home that produces goods, services, and profits far more than the work of parenting. While parenting’s value is, well, infinite, it goes largely unmeasured in our gross domestic product… Our country needs a sensible family policy. That’s why child care, universal pre-K, family leave and an expanded child tax credit were central components of President Biden’s Build Back Better plan. But our debate last year about his proposal rarely got to the merits.”

Ameliorating child poverty in the United States is a moral imperative. It is important for supporters of public education to join child advocacy organizations in standing behind Congressional champions like Ohio Senator Sherrod Brown, Colorado Senator Michael Bennet and Connecticut Congresswoman Rosa DeLauro, who are pushing Congress permanently to expand the Child Tax Credit and make it fully refundable.