Five Democratic Senators Insist that the Child Tax Credit Expansion Must NOT Be Dropped from Build Back Better

Yesterday, Ohio Senator Sherrod Brown and four colleagues—Michael Bennet (CO), Cory Booker (NJ), Raphael Warnock (GA), and Ron Wyden (OR)—wrote to President Joe Biden and Vice President Kamala Harris to advocate for including last year’s expansion of the Child Tax Credit in a 2022 version of the Build Back Better Bill.

Last year’s temporary expansion was part of the American Rescue Plan COVID relief bill. The program expired at the end of 2021, when the U.S. Senate failed to pass the House of Representatives’ version of Build Back Better.

Many have worried that because West Virginia Democrat Joe Manchin has expressed opposition to expanding the Child Tax Credit, Senate Democrats will, in 2022, push through a watered down Build Back Better bill that lacks this program, but Senators Brown, Bennet, Booker, Warnock, and Wyden declare that this program is essential. They explain why: “The expanded Child Tax Credit represents the biggest investment in American families and children in a generation. From July to December 2021, the monthly payments of $250 per child age 6-17 and $300 for children under age 6 reached more than 35 million families.  Nearly 9 in 10 American children benefited from these payments, which enabled their families to afford rent, put food on the table, and pay for child care so their parents and caregivers could stay in the workforce. Data from the Census Bureau show 91 percent of low-income families spent their payments on basic necessities like groceries, utilities, housing, and school-related costs.”

The senators continue: “The expanded Child Tax Credit is a signature domestic policy achievement of this administration, and has been an overwhelming success.  The expanded Child Tax Credit payments, which are projected to reduce child poverty by more than 40 percent, kept an estimated 3.7 million children out of poverty in December 2021 alone.  These anti-poverty effects are particularly strong for children of color, nearly half of whom were excluded from the full credit prior to the American Rescue Plan. Nationwide, the payments cut hunger among families with children by 24 percent.”

In their letter, the senators cite a preliminary academic study published last week by the National Academies of Sciences and described by the NY Times expert social science reporter Jason DeParle.  Neuroscientific research documented a small but significant increase in babies’ brain activity in the months when their parents were awarded $333 per month in cash assistance. DeParle reports: “The payments will continue until the children are at least 4 years old, and the researchers plan further tests.”

DeParle explains further: “Evidence abounds that poor children on average start school with weaker cognitive skills and neuroscientists have shown that the differences extend to brain structure and function. But it has not been clear if those differences come directly from the shortage of money or from related factors like parental education or neighborhood influences.” In this study, “Using electroencephalograms… to evaluate the children at age 1, the researchers found that those in the high-cash group had more of the fast brain activity other research has linked to cognitive development than those in the low-cash group… Researchers are still trying to determine why the money altered brain development. It could have purchased better food or health care, reduced damaging levels of parental stress, or allowed mothers to work less and spend more time with their infants… Economists and psychologists once dominated studies of poor children, but neuroscientists have increasingly weighted in.” Here DeParle is referring to a body of research documenting “toxic stress,” which children living in poverty are more likely to experience partly through their environments and partly from their parents’ anxiety and depression.

DeParle explores how the debate about the Child Tax Credit has played out politically in Congress: “Most Republicans oppose the monthly grants, citing the cost and warning that unconditional aid, which they describe as welfare, discourages parents from working. Sharing some of those concerns, Senator Joe Manchin III, Democrat of West Virginia, effectively blocked the Biden Plan, though he has suggested that he might support payments limited to families of modest means and those with jobs.”

Economists and sociologists have questioned this assumption that the Child Tax Credit payments will undermine parents’ motivation to work. Many parents who desperately need the Child Tax Credit are already working.  A sociology professor at American University, Celine-Marie Pascale explains that, “A recent study by the Brookings Institution defined low-wage work as a median hourly wage of $10.22 or $17,950 per year.  By this measure, 44% of all workers in the U.S. are low-wage earners.”

And “low-wage work” pays more than minimum-wage work. The federal minimum wage is $7.25 per hour—just over $15,000 per year for working full time—at the same time the federal poverty level for a family of four is $26,500.  Low-wage work is particularly common among women including many single mothers. The Economic Policy Institute reports that, “The average hourly wage for early care and education workers and home health care workers is $13.51 and $13.81 respectively—about half the economywide average hourly wage. For a full-time worker, this translates to less than $30,00 a year.”

Expanding the Child Tax Credit would improve children’s lives and additionally have educational implications. Kevin Welner, a professor of education at the University of Colorado and executive director of the National Education Policy Center explains: “Those of us who work in or with schools never question the enormous impact that a teacher or school can have on a student. But this essential truth coexists with another truth: that differences between schools account for a relatively small portion of measured outcome differences. That is, opportunity gaps in the U.S arise primarily outside of schools. This should not be a surprise. Poverty, concentrated poverty, and racialized poverty are pervasive features of America. School improvement efforts cannot directly help children and their families overcome decades of policies that perpetuate systemic racism and economical inequality. When children are born in the United States, their educational and life outcomes can all be predicted based on their parents’ education, income and wealth. Compared to the Scandinavian countries and other so-called Western democracies like Canada, Spain, Australia, and New Zealand, American children are inordinately trapped in intergenerational poverty. Inequality in the U.S. is stark and enduring.”

Last year as part of the American Rescue Plan COVID relief bill, Congress enacted three temporary reforms in the Child Tax Credit—increasing the per-child benefit, distributing the tax credit monthly instead of once a year, and making the tax credit fully refundable. Ironically, prior to last year’s reforms, America’s poorest families could not qualify because their incomes were too low.  Making the Child Tax Cut fully refundable to America’s poorest families is the most desperately needed reform in this program.  The Center on Budget and Policy Priorities explains why:

“In the absence of the full refundability provision, the first two of those changes would lift an estimated 543,000 children above the poverty line, reducing the child poverty rate by 5 percent… But the two changes plus full refundability stand to raise 4.1 million children above the poverty line and cut the child poverty rate by more than 40 percent. In other words, the full refundability feature makes the expansion nearly eight times as effective in reducing child poverty.” “Prior to the Rescue Plan, 27 million children received less than the full Child Tax Credit or no credit at all because their families’ incomes were too low. That included roughly half of all Black and Latino children and half of children who live in rural communities… This upside-down policy gave less help to the children who needed it most. The (COVID) Rescue Plan temporarily fixed this policy by making the tax credit fully refundable for 2021.”  (emphasis in the original)

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Strategic Advocacy Over Decades Brought Us an Expanded Child Tax Credit: Can the Same Kind of Strategic Organizing Produce School Funding Reform?

On Saturday, after the U.S. Senate joined the U.S. House of Representatives to pass President Joe Biden’s American Rescue Plan, I started thinking about how a huge coalition and strong advocates can sustain support for an important reform even through times that feel bleak and hopeless. Now, as a result of persistent and strategic advocacy, suddenly an election of new leaders has on some level adjusted our society’s collective notion of the role of government.

Welfare reform imposed policies that punished parents who were not working by reducing their access to public assistance. In doing so, President Bill Clinton and the Congress that replaced Aid to Families with Dependent Children with Temporary Assistance for Needy Families entirely neglected the needs of America’s poorest children. But as of this weekend, by expanding the Child Tax Credit, Congress accepted the idea that as a society we bear collective responsibility for the well-being of our children. And while the expanded Child Tax Credit is part of this year’s time-limited pandemic relief, my Ohio Senator Sherrod Brown and Colorado Senator Michael Bennet have promised to try to make the changes permanent.

Back in 2004, I read Jason DeParle’s powerful book, American Dream: Three Women, Ten Kids, and a Nation’s Drive to End Welfare, about how the 1996 welfare reform harmed children. Since then I have filled my clipping file with DeParle’s articles about our collective responsibility for poor children, most recently last summer, when DeParle pushed for expanding the Child Tax Credit in the NY Times and the New York Review of Books.  At the same time, I realized that powerful research and advocacy organizations—including First Focus on Children, the Center for Law and Social Policy, the Center on Budget and Policy Priorities, the Urban Institute, and the Brookings Institution—were working to expand the Child Tax Credit and make it fully refundable. But for years and years the matter of overturning welfare reform has felt hopeless.

In the NY Times this week, DeParle reminds us that an election can bring a turnaround not only in one piece of public policy but also much bigger shift: “Obscured by other parts of Biden’s $1.9 trillion stimulus package which won Senate approval on Saturday, the child benefit has the makings of a policy revolution. Though framed in technocratic terms as an expansion of an existing tax credit, it is essentially a guaranteed income for families with children, akin to children’s allowances that are common in other rich countries. The plan establishes the benefit for a single year. But if it becomes permanent, as Democrats intend, it will greatly enlarge the safety net for the poor and the middle class at the same time when the volatile modern economy often leaves families moving between those groups. More than 93 percent of children—69 million—would receive benefits under the plan, at a one-year cost of more than $100 billion.”

DeParle continues: “While the proposal took center stage in response to the pandemic, supporters have spent decades developing the case for a children’s income guarantee. Their arguments gained traction as science established the long-term consequences of deprivation in children’s early years, and as rising inequality undercut the idea that everyone had a fair shot at a better life… Mr. Biden’s embrace of the subsidies is a leftward shift for a Democratic Party that made deep cuts in cash aid in the 1990s under the theme of ‘ending welfare.’… ‘ The moment has found us,’ said Representative Rosa DeLauro, a Connecticut Democrat who has proposed a child allowance in 10 consecutive Congresses and describes it as a children’s version of Social Security.”

Two weeks ago, the Education Law Center—the nation’s top school finance litigation firm pursuing cases for school funding adequacy and equity under the 50 state constitutions—published From Courthouse to Statehouse—and Back Again, a major report endorsing precisely the kind of sustained, research-based advocacy that helped bring about this week’s Congressional shift to expand the Child Tax Credit. The Education Law Center, whose business is pursuing litigation-based school funding reform, warns—based on successful court victories in Massachusetts, Kansas, Washington, and New Jersey—that along with litigation, states need grassroots organizing, research-based communications, and disciplined messaging:

“Securing new resources for schools requires a majority of elected lawmakers to support finance reform and more critically, to fund it. These legislative debates trigger complicated political calculations about taxation, public and social services, the role of government, and, inevitably race, income, and wealth… The profiles in this report demonstrate that labor and grassroots organizations can play a significant part in galvanizing public opinion and breaking down resistance or deadlock inside the statehouse.”

“(E)ach state’s constitution obligates it to maintain and support a system of free public schools to educate all resident children. This means the amount and distribution of school funding—both state and local revenues—is controlled by elected state legislators and governors. Consequently, improving the way public schools are funded and boosting the investment of tax dollars in those schools can only be accomplished through the year-to-year political process of making laws, and passing budgets in state capitols.”

How to shape public opinion? First the Education Law Center advocates the wide dissemination of research: “(S)uccessful campaigns require research at all stages and for multiple audiences… It is imperative that research go beyond academic circles and be tailored and marketed to broader groups and the public at large.” But research must be part of a strategically framed campaign: “(S)takeholder coalitions helped maintain a unified message throughout both the legal proceedings and legislative deliberations. These coalitions also helped contain potential schisms among stakeholder groups, keeping them internal rather than spilling out and muddying the public debate.”

The Education Law Center urges coalitions pursuing school funding lawsuits to raise enough funds to hire a communications director to manage a well framed and extremely disciplined message. And campaigns “are much more impactful when done in close partnership with grassroots parent, community, and civil rights organizations. These partnerships ensure that the interest of the most important beneficiaries of the campaigns—the students themselves—remain front and center.”

The same kind of sustained, research-based advocacy that paved the way for last weekend’s Congressional expansion of the federal Child Tax Credit is going to be necessary, says the Education Law Center, for school funding reform even when the central strategy is through litigation: “(T)he level and distribution of school funding is controlled by elected state legislators and governors. In the end, improving the education of our nation’s children, especially the most vulnerable, depends on building strong, multi-dimensional political campaigns that can place and sustain the demand for well-funded and well-resourced schools squarely at the foot of state elected representatives and governors. Lawyers, when working in deep connection to those campaigns, can use the courts to amplify and advance that demand.”

Suddenly President Biden Has Made Ameliorating Child Poverty a Topic of the Hour

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.”