Congress Must Make Last Spring’s Temporary Expansion of the Child Tax Credit Permanent As Part of the Build Back Better Bill

In the American Rescue Plan, the COVID-relief bill passed in March, President Joe Biden and Congress temporarily increased the Child Tax Credit and made it fully refundable. Now, as House and Senate bargain and fight about President Biden’s Build Back Better Bill (sometimes called the reconciliation package), they need to invest in making permanent last spring’s temporary expansion of the Child Tax Credit.

Congress should not add parental work requirements as qualifications for families to receive the full Child Tax Credit. The program was designed to protect children from the ravages of poverty.  Children should not be punished if parents are unable to work or unable to find or afford childcare.

The big problem with the Child Tax Credit until last spring when Congress temporarily expanded the program was that it helped middle class families far more than it assisted impoverished families whose children’s needs may be desperate.  Until Congress fixed it temporarily in the American Rescue Plan, the Child Tax Credit was what the Center on Budget and Policy Priorities calls “an upside-down policy (which) gave less help to the very children who needed it most.” “Prior to enactment of the American Rescue Plan in March,  27 million children received less than the full Child Tax Credit or no credit at all because their families’ incomes were too low, including roughly half of all Black and Latino children and children who live in rural communities… Enacted in 1997, the original Child Tax Credit largely excluded children whose families had low or moderate incomes because the credit could only be used to offset a family’s income tax liability, not to boost a family’s low income.”

The Center on Budget and Policy’s September 7, 2020 report fills in the history of the Child Tax Credit: “As part of tax legislation, President George W. Bush signed in 2001, a bipartisan group of senators restructured the Child Tax Credit to make it partially ‘refundable,’ meaning that a family with little or no income tax liability could receive part of the credit as a refund… During each of the Bush, Obama, and Trump Administrations, policymakers on a bipartisan basis incrementally reduced the earnings threshold.  Most recently, Republican Senators Marco Rubio and Mike Lee pushed to reduce it to $2,500 in the 2017 law, which also increased the maximum credit to $2,000 per child.  But because the credit only phased in at the rate of 15 cents on the dollar for earnings above $2,500, a mother of two earning $15,000 received just $1,875 per year… still substantially less than middle-income families. The American Rescue Plan took a major step in rectifying this problem by making the full Child Tax Credit available to children in families with low or no earnings for 2021.”

The American Rescue Plan also increased the amount of the Child Tax Credit to $3,600 for each child under age 5 and to $3,000 for children ages 6-17.  “The Rescue Plan also allowed the IRS to deliver the Child Tax Credit to families on a monthly basis, rather than as a lump sum at tax time. The monthly cadence of payments provides financial predictability and stability for families with incomes near the poverty line.”

In late September, as some members of Congress suggested adding parents’ work requirements as a condition for families’ qualification for the Child Tax Credit, the Center on Budget and Policy Priorities released a second report to define the explicit purpose of reforming the Child Tax Credit: to help support children living in poverty, not to punish unemployed parents. “Recent suggestions that Congress should deny the credit to children whose parents don’t have earnings are misguided. Taking away the full credit from children based on their parents’ earnings would needlessly leave in poverty — or push deeper into poverty — the children who need help the most, injuring their long-term health and educational outcomes and reducing their earnings as adults, while doing virtually nothing to boost parental employment…In more than 95 percent of families who benefit from making the credit fully refundable, the parent or other caretaker is working, between jobs, ill or disabled, elderly, or has a child under age.”

Permanently expanding the Child Tax Credit and making it fully refundable are tools for addressing economic inequality and racial injustice. The Center on Budget and Policy Priorities continues: “Prior to the Rescue Plan expansion, about half of Black and Latino children received a partial credit or no credit at all because their incomes were too low, compared to about a fifth of white children. About half of children in rural… communities were also excluded from the full credit due to their family’s low income. These facts reflect sharp disparities in the educational and employment opportunities available to Black, Latino, and rural communities… The nation’s high child poverty rate and gaping racial ethnic, and geographic disparities in child poverty have translated into lost opportunities for millions of children.”  “The most common way people used their initial monthly Child Tax Credit payments this summer was to buy food… In the month and a half after the initial monthly Child Tax Credit payment was issued, the number of adults with children reporting that the household didn’t have enough to eat dropped by 3.3 million or nearly one-third.”

While middle class families have been receiving the full Child Tax Credit for each of their children since its inception in 1997, working poor and unemployed families have been excluded. The purpose of permanently expanding the Child Tax Credit is to help alleviate the threats of hunger, housing insecurity, and family stress for 27 million of our nation’s poorest children who have been left out of this program. It is time for Congress to do the right thing by making permanent the temporary reforms that were part of the American Rescue Plan.

Advertisement

President Biden Is Investing to Help Children at School: Secretary Cardona Needs to Provide the Policy Vision

The Education Law Center headlined the press release about its annual Education Justice Lecture: “President Biden’s First 100 Days Set Stage for Overhaul of Federal Education Policy.”

The press release sounded exciting as it described Linda Darling-Hammond, the event’s primary speaker, “underscoring the backdrop of the multiple crises facing the United States and their impact on structural inequities and racism in the nation’s public schools.” It described Dr. Darling-Hammond explaining, “how these profound challenges are behind the President’s call for a comprehensive federal policy to support major investments and reforms in public education, including addressing discrimination and segregation, equitable funding and resources, universal preschool, wholistic student supports, investments in the teacher workforce and access to post-secondary education and college.”

Immediately I opened the link to Darling-Hammond’s presentation, where I found myself disappointed, even though she titled her remarks, “President Biden’s First 100 Days: A Transformation in Action”—and even though I agree that what Darling-Hammond reported is important.  She describes the American Rescue Plan Act which would, according to Darling-Hammond, definitely help children and families by expanding access to affordable health insurance; boosting families’ access to needed nutrition services; supporting and stabilizing child care and Head Start; supporting child mental health; offering stimulus payments, unemployment supplements, and tax credits for family medical leave; and most important of all, expanding the child tax credit and making it fully refundable. As Darling-Hammond stresses, the expansion of the child tax credit, if it becomes permanent, is projected to cut child poverty in the U.S. by half.

Darling-Hammond also summarizes the streams of money in the American Rescue Plan to help schools reopen, to help homeless students, to improve services for disabled students and to expand broadband infrastructure.  And she adds on significant proposals from the Biden administration in the President’s proposed budget—large increases in Title I and IDEA funding and over $400 million to build more full-service, wraparound Community Schools and even more in the Proposed American Families Plan for Pre-K, free community college, teacher training, and additional support for child care.

What I found was a report about the urgently important investments Biden has proposed, but Darling-Hammond’s summary missed what I was looking for, which was also what Darling-Hammond had promised: the plan for an “overhaul of federal education policy.”  The report is long on money and short on what I have been hoping Secretary of Education Miguel Cardona would provide: a major change of plans.

This is not to say that whatever amount of all this money is eventually appropriated by Congress will be unimportant.  Much of this investment is to support America’s poorest families with enough money to more comfortably care for their children. Generations of research demonstrate that poverty itself is the greatest barrier for children in general and for their engagement at school. (See here, here, and here.) Aggregate standardized test scores correlate with family and neighborhood income.  Helping families with food, healthcare and childcare, and enough money to provide for children’s basic needs will inevitably help children at school.

But the problem is that none of this gets at the big problem today in federal education policy and with the state policies that have been spawned by the federal government and are still required to some degree in education policy across the states. Secretary Miguel Cardona has kept in place the vast infrastructure of federally mandated standardized testing.  And even though the Every Student Succeeds Act (ESSA) no longer mandates a cascade of punishments for so-called failing schools, as No Child Left Behind (NCLB) did, ESSA does require states to rate and rank public schools and to submit to the U.S. Department a plan for turning around the lowest scoring five percent of schools.  And so, due to long-running federal policy, we have all kinds of practices based on standardized testing—the state school report cards that brand so-called “failing” school districts, school closures, the idea of charterization or privatization as a turnaround strategy, state takeovers of schools and sometimes entire school districts, evaluating teachers by their students’ test scores, the Third-Grade Guarantee, and high school graduation exams.  The federal government doesn’t require some of this anymore, but states still have to promise school turnarounds and lots of states still have the systems in place that they set up under NCLB.

Today we know that the test-and-punish scheme of NCLB and ESSA didn’t work. Scores on the National Assessment of Education Progress have never risen and achievement gaps measured by standardized tests have not closed. During the presidential campaign, President Biden himself spoke out against the current regime based on standardized testing.  Now we must look to Cardona to set a new and more constructive policy framework to go with the added investment.

Cardona is to be commended for quicker action to reverse Betsy DeVos’s disastrous college loan policies that have left graduates of for-profit trade schools with huge debts and worthless degrees.  But, in the area of education policy, he has hired Roberto Rodriguez as Assistant Secretary of Planning, Evaluation and Policy Development.  And President Biden has hired Carmel Martin as Special Assistant to the President for Education Policy. These people helped implement Arne Duncan’s test-and-punish policies epitomized by Race to the Top and the Common Core Standards and both of them were involved with the Senate Health, Education, Labor, and Pensions Committee back in 2001 during the drafting of the No Child Left Behind Act.

Cardona needs to acknowledge the failure of standardized test-based accountability and to define a well-formulated path forward.  At the very least he should begin to re-name educational inequity with the term, “opportunity gap,” which describes children’s lack of access to equal resources instead of the old test-score-based term, “achievement gap.” There are some policies that we know would help the nation’s most vulnerable children at school, many of them the things that schoolteachers taught us in the statewide walkouts and huge strikes of 2018-2019: smaller classes, more counselors and social workers, enriched curricula, and the reopening of school libraries staffed by certified school librarians.

President Biden has proposed to make more money available. Secretary Cardona needs to proclaim a vision for how the investments in K-12 public schools might best be spent.

What Is President Biden’s American Families Plan?

Tonight, when President Biden marks 100 days in office with a major speech to a joint session of Congress, he is expected to announce the second part of his Infrastructure Plan—the American Families Plan.  This part of Biden’s agenda does not directly support the public schools, but it will continue to ameliorate child poverty and reduce stress on families and thereby help public school students in myriad ways.

The Washington Post‘s Jeff Stein explains what is known about the plan, despite that negotiations have been fluid even in recent days: “The ‘American Families Plan,’ set to be released ahead of the president’s joint address to Congress on Wednesday, calls for devoting hundreds of billions of dollars to national child care, prekindergarten, paid family leave and tuition-free community college, among other domestic priorities… The key components of the plan consist of roughly $300 billion in education funding, the biggest pot of which includes funding to make two-year community colleges tuition-free; $225 billion in child-care funding; $225 billion for paid family and medical leave; $200 billion for prekindergarten instruction; and $200 billion to extend more enhanced Affordable Care Act subsidies….  The plan would also extend a more robust child tax credit until 2025… a measure that could cost as much as $400 billion, as well as extend a more robust tax credit for workers. Aides repeatedly stressed that the details of the plan were subject to change and that final decisions had not yet been made.”

Fiscally austere federal policy to address economic inequality dates back to the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, the law that ended welfare. Policy designed to stigmatize instead of helping low income families has been around for so long that, it’s clear, the path to final enactment of Biden’s American Families Plan will not be smooth. Stein continues: “Those programs all largely reflect ideas that have moved into the Democratic mainstream, brought to the fore by the changes caused by the pandemic. The United States is the only wealthy nation with no federally provided paid maternity leave; is one of about five with no paid paternity leave; and is one of two without general paid sick leave… The Organization for Economic Co-operation and Development has ranked the United States as one of the worst in the world in terms of spending on families, with parents particularly stressed by the high cost and lack of access of child care during the pandemic.”

Negotiations in Congress look challenging. CNN‘s Phil Mattingly reports that after tonight’s speech to Congress, “Biden will then hit the road on his first sales pitch for the plan later this week.” The American Family Plan is being announced second—after the Infrastructure Plan was recently announced.  Mattingly explains: “(O)fficials acknowledged to CNN… that this is a far heavier lift politically, with limited chance for any GOP buy-in. The two pieces were spaced out intentionally in part to give space for Biden’s infrastructure plan to attract bipartisan support.” From the other side, Congressional Democrats are demanding that Biden extend the plan with additional programs and investments.

Especially controversial with Republicans are the tax reforms that have been discussed as the way to pay for the plan. Stein explains: “Biden and White House officials have been adamant that their tax hikes would not hit anyone earning under $400,000 per year. The key tax changes are expected to include increasing the top tax rate from 37 percent to 39.6 percent; taxing investment gains from capital income at ordinary wage rates for those earning more than $1 million; and imposing a higher tax on assets when they are transferred at death, among other provisions….”

A Little History about the Need for Such a Plan

In the first 100 days of his term, President Biden has been taking enormous steps to try to establish a new set of foundational values regarding the role of government for supporting children—both at school and at home. When a major shift is underway in the direction of public policy, it is difficult to discern the ultimate implications.  We can’t anticipate how Biden’s Infrastructure Plan will work out or even whether he will get his proposed budget for education passed.

We had another major shift in the basic values under public policy when a  bipartisan Congressional coalition passed the omnibus No Child Left Behind Act (NCLB) back in 2002. That law—with its glowing title about saving children—would instead solidify the idea that public schools across America are failing and would launch an era of austerity budgeting for public schools federally and across the states. We have now watched two-decades of blaming and sanctioning the schools serving America’s poorest children instead of helping them.  And at the same time, federal policy has reduced economic support for the poorest children served by public schools. The federal punitive requirements of NCLB conspired with the 1996 law that “ended welfare as we know it”— and later with the Great Recession followed by austerity budgeting across the states after the Tea Party wave election in 2010—to destroy overall state investment in public education and programs to help families barely subsisting as economic inequality soared.

It took two years (through 2018 and 2019) of statewide walkouts by public school teachers from West Virginia to Kentucky to Oklahoma along with huge strikes in Los Angeles and Oakland and Chicago to begin to correct NCLB’s strategy of test-and-punish. Teachers finally opened the nation’s eyes to the impact on schools and on children of austerity budgeting and privatizing education—an agenda that had conspired across the states to punish, privatize, and even close public schools in America’s poorest communities.  Striking teachers across the states exposed what had been invisible: staffing shortages that left children stuffed in classes of 40 students and that left children in public schools without an adequate number of counselors, school psychologists, school nurses and librarians.

It’s been a long time coming, but right now President Biden is attempting significantly to shift policy that shapes the lives of America’s poorest children and their schools. Biden’s American Rescue Plan, signed into law on March 11, allocates significant dollars for school reopening, and his FY 22 budget proposal would double investment in the Title I program that invests extra dollars in the public schools serving concentrations of America’s poorest children. Both are designed to rectify the damage to schools wrought by NCLB and a cascade of other punitive policies like Race to the Top.

Today the Biden Administration, spurred on by the economic catastrophe of COVID-19, will propose to supplement those investments by introducing the American Families Plan, intended to reshape national policies that have blamed America’s poorest families for being poor and denied them urgently needed public support. The American Families Plan would make permanent the American Rescue Act’s temporary expansion of the Child Tax Credit and offer a boost for families struggling to afford preschool, for young people unable to afford community college, and for families shut out of affordable childcare and burdened with persistent poverty, hunger, and homelessness.

Last month when the President’s infrastructure bill was announced, the Center for Law and Public Policy’s executive director, Claudia Golden responded to the parts of the infrastructure package that comprise the American Families Plan: “CLASP looks forward to supporting the remaining crucial infrastructure investments anticipated in the forthcoming American Families Plan. A successful economic recovery can’t occur without a national paid leave program that enables workers everywhere to take time when they need to care for themselves or loved ones without risking their livelihoods. It requires a large-scale investment to transform the nation’s child care and early education system, building on the important first step in the recently enacted American Rescue Plan to stabilize the sector.  A comprehensive recovery must also make permanent improvements to the child tax credit and earned income tax credit included in the American Rescue Plan, as well as a substantial additional investment in mental health….”

Biden Asks Congress to Double Title I on top of Stimulus Dollars: Why Is All This Money Needed?

On March 11, President Joe Biden signed the American Rescue Plan, COVID-19 relief bill, which will provide $125.4 billion for state K-12 education programs including investments to help kids catch up, provide after-school programs, offer summer enrichment, undertake facilities upgrades and “stabilize and diversify the educator workforce and rebuild the educator pipeline.”

And on April 9, President Biden proposed doubling the annual Title I allocation in the administration’s FY 2022 federal budget proposal. Title I was created in 1965 as a federal supplement to compensate for inadequate state funding for the nation’s school districts that serve concentrations of poor children.  It has been chronically underfunded. Chalkbeat explains: “The proposal would take the Title I program from its current $16.5 billion to $36.5 billion… The budget plan also includes a boost for special education funding… more counselors, nurses, and mental health professionals in schools… more for child care and Head Start… a big increase for the relatively small Community Schools program (schools with wraparound medical and social services for families)… and more money for the Office of Civil Rights.”  Of course, Biden’s budget is just a proposal for now—the first stage in several rounds of negotiations with Congress before a final federal budget will be passed by September 30.

None of us can fully comprehend what all these billions of dollars will mean. Probably some of us wonder whether they are really needed. In fact, those of us who live in school districts able to pass regular local property tax levies might imagine that all American schools probably look like ours—adequately maintained and at least adequately staffed. But in a nation with roughly 13,500 school districts and 98,000 public schools that serve over 50 million students, most of us can grasp neither the scale of the cost of public schooling across the United States nor the alarming inequity among the schools even in our own state.

Back In 2009, when the Obama administration passed the American Recovery and Reinvestment Act to address the impact of the 2008 Great Recession, none of us could look ahead to see what turned out to be its negative effects on public schools—the Race to the Top and School Improvement Grant Programs, for example. And with the current federal stimulus bill, like the one a dozen years ago, it is impossible to predict exactly what will happen in the next decade.  What is clear is that experts who have examined public school investment in the years since Obama’s stimulus package know that its relief dollars for public schools were inadequate. Following the Great Recession public schools took such a serious beating that in many places they had not recovered even before COVID-19 struck. There is considerable evidence today of the need for the new, one-time stimulus dollars and additionally, the long-term increase in Title I spending for the school districts across the United States that serve concentrations of poor children.

The COVID-19  pandemic has actually helped to make educational inequality visible particularly as we have all observed school districts’ unequal access to technology compounded by their students’ unequal access even to basic broadband. But experts have exposed other extremely troubling indicators which point to the importance of the size and scope of the investments President Biden is making available.

The Albert Shanker Institute’s Matthew DiCarlo describes the conclusions of research by Rutgers University school funding experts Bruce Baker and Mark Weber: “There is good news and bad news. The good news is that thousands of districts enjoy funding levels above and beyond our estimates of adequate levels…. The bad news is that these well-funded districts co-exist with thousands of other school systems, some located within driving distance or even in the next town over, where investment is so poorly aligned with need that funding levels are a fraction of estimated costs. To give a rough sense of the magnitude of the underfunding, if we add up all the negative funding gaps in these latter districts… the total is $104 billion…. (W)e report… that funding tends to be more inadequate—or less adequate—in districts with higher Census child poverty rates… We also find a negative relationship between funding inadequacy and the shares of students of color served by districts.”

In their new book, The Wolf at the Schoolhouse Door, Jack Schneider and Jennifer Berkshire elaborate on the same problem: “Almost every state reduced spending on public education during the Great Recession, but some states went much further, making deep cuts to schools, while taking aim at teachers and their unions… Moreover, states including Arizona, Kansas, Michigan, and North Carolina also moved to permanently reduce the funds available for education by cutting the taxes that pay for schools and other public services.  In Wisconsin, Governor Scott Walker took aim at education through Act 10—what was first called the ‘budget repair bill.’  Act 10 is remembered for stripping teachers and other public employees of their collective bargaining rights.  But it also made $2 billion in cuts to the state’s public schools.” (The Wolf at the Schoolhouse Door, pp. 35-36)

And in his new book, Schoolhouse Burning, constitutional scholar, Derek Black summarizes what has happened in too many states in the past decade: “Before the recession of 2008, the trend in public school funding remained generally positive… Then the recession hit. Nearly every state in the country made large cuts to public education. Annual cuts of more than $1,000 per student were routine.” But the recession wasn’t the only cause of money troubles for public schools: “(I)n retrospect…. the recession offered a convenient excuse for states to redefine their commitment to public education… By 2012, state revenues rebounded to pre-recession levels, and a few years later, the economy was in the midst of its longest winning streak in history. Yet during this period of rising wealth, states refused to give back what they took from education. In 2014, for instance, more than thirty states still funded education at a lower level than they did before the recession—some funded education 20 percent to 30 percent below pre-recession levels.”  (Schoolhouse Burning, pp. 31-33)  “(W)hen it comes to districts serving primarily middle-income students, most states provide those districts with the resources they need to achieve average outcomes… But only a couple states provide districts serving predominantly poor students what they need. The average state provides districts serving predominantly poor students $6,239 less per pupil than they need.” (Schoolhouse Burning, p. 241)

And last summer,  C. Kirabo Jackson, a social policy professor at Northwestern University and two colleagues released a study of the decade-long effects of the recession on school achievement nationwide despite federal stimulus in the form of the 2009 American Recovery and Reinvestment Act.  School districts made the greatest cuts by putting off capital expenses like building maintenance and repairs. “Even so, districts still made substantial cuts to instructional spending. For every dollar in spending cuts, we find districts reduced instructional spending by $0.45, on average. Reductions in payroll costs for instructional employees account for roughly half of that amount… Districts trimmed their spending on payroll across the board, taking particular aim at the guidance office. We look at overall staff counts and find that, on average, a $1,000 decline in spending was associated with hiring 3.7 percent fewer teachers, 5.3 percent fewer instructional aides, 3.3 percent fewer library staff members, and 12 percent fewer guidance counselors. This led to roughly 0.3 more students per teacher and 80 more students per guidance counselor… (T)he spending declines that followed the Great Recession halted a five-decade-long increase in student test scores in reading and math, kicking off what some have called a ‘lost decade’ in terms of student achievement… (T)hose cuts also were associated with slower rates of college-going among students on track to become first-time college freshmen, possibly undermining some students’ momentum during a critical moment of transition from K-12 to higher education…”

School districts are already weighing the urgent needs they can address with the American Rescue Plan dollars they are set to receive.  Chalkbeat Detroit reports that in Detroit, which will receive $1.2 billion, “District leaders plan to spend about half of the funds—$613 million— on addressing a long-running facilities crisis, alleviating pressure from a mounting repair bill that the district hadn’t been able to cover.”

Chalkbeat‘s Matt Barnum and Kalyn Belsha add that in Hamtramck, a district connected geographically to Detroit, Superintendent Jaleelah Ahmed, “says the new federal aid will allow her district of 3,300 students to finally afford improvements to its buildings, some of which are so old they’re historical landmarks. First on its list: fixing windows that don’t open. Then, Ahmed is hoping to expand after-school and summer programming. That could include more dual enrollment college classes and new ways to engage students with sports, arts, or technology as they work on their English skills. More than two-thirds of her students are English learners, many of whom fled war in Yemen and have acute academic, social, and emotional needs.”

Barnum and Belsha add that in Pennsylvania’s Chester-Upland, a district which has been in receivership since 2012, Superintendent Carol Birks, “hopes to spend the money on air conditioning in schools that lack it, upgrading the district’s IT infrastructure so more students can use laptops in their classrooms, and adding tutoring for younger students… ‘Our goal is not to spend all the money in one year… We’re going to be developing a planning process of what we can take on in year one, year two, so that we do things thoughtfully, purposely, and well.'”

Clearly there are two problems to be addressed by the President’s proposed increase in Title I (assuming that Congress appropriates the funds) and the money for public schools in the American Rescue Plan: (1) a long and alarming problem of school district inequity that overlays already serious racial and economic inequality among American children, and (2) the very unequal impact of COVID-19 for families and the public schools that serve those families.  Fortunately the American Rescue Plan dollars are being distributed according to the Title I formula, which means that the bulk of the funding will be targeted to school districts serving our nation’s poorest children.