Build Back Better Bill Would Turn Around Decades of Policy Punishing Poor Children

The U.S. House of Representatives finally passed President Biden’s infrastructure plan last Friday. The Senate passed it a while ago, and the bill is headed to Biden’s desk for signature.  At the same time, Democrats in the U. S. House of Representatives pledged that if the Congressional Budget Office confirms cost estimates for the Build Back Better Bill, Democrats in the House will pass the current version of the plan and send it on to the Senate for consideration. For months, Congress has been debating the programs that are part of this plan, and even if Congress passes it, it won’t be perfect.

Even if imperfect, however, the Build Back Better Bill in its current form would signify a truly revolutionary investment in America’s children. That is because the United States has, for decades, utterly failed to use government to begin to eradicate a morally reprehensible level of childhood economic inequality.

Cara Baldari of the First Focus Campaign for Children explains: “For the first time in generations, we are on the precipice of making serious and long-term progress to reduce our stubbornly high rate of child poverty in the United States. Historically, the United States has had a significantly higher rate of child poverty than other developed countries because we have continually failed to sufficiently invest in our children. While the establishment of Social Security has permanently reduced poverty for seniors, children have remained the poorest group in America. This situation is not due to a lack of evidence on what works to reduce child poverty, but rather the lack of political will to act.”

Since 1997, families who earn enough income to pay federal income taxes have benefited from a tax credit for each child. Last spring’s American Rescue Plan Covid-relief bill made the full Child Tax Credit available to children in families with low earnings or without income, and it increased the credit’s maximum amount—$2,000 per-child last year— to $3,000 per child and $3,600 for children under age 6—but only through the end of 2021. Without the extension of this reform, many children will fall back into deep poverty in 2022.

Balderi presents some recent history: In 2015, advocates for children “worked with Reps. Lucille Roybal-Allard (D-CA) and Barbara Lee (D-CA) to secure federal funding for the landmark National Academy of Sciences study, A Roadmap to Reducing Child Poverty, which was published in 2019. This study, written by a committee of experts… confirmed that… providing families with flexible cash assistance through a monthly child allowance was the most effective way to combat child poverty, reduce racial-economic inequality, and improve children’s long-term outcomes.”  In a tragic irony, until this year families without income or with income so low they payed little in federal income taxes could not receive the full tax credit, while middle class and even wealthy parents could receive the full credit, thereby reducing their federal income tax.

Last week the Center on Budget and Policy Priorities examined several provisions of the Build Back Better Bill which will, if the law is passed in its current draft form, reduce racial disparities.  The brief leads with the Bill’s provision to reduce child poverty by extending last spring’s expansion of the Child Tax Credit: “Build Back Better extends the American Rescue Plan’s expansion of the Child Tax Credit for 2022, which is expected to lift 4 million children above the poverty line and narrow the difference between poverty rates for Black and white children by 44 percent (compared to what the rates would be otherwise) and to narrow the difference between the poverty rates for Latino and white children by 41 percent.  Build Back Better also permanently ensures that the full Child Tax Credit is available to children in families with low or no earnings in a year. This is particularly important for Black and Latino children, about half of whom received a partial credit or no credit at all before the Rescue Plan expansion because their families’ incomes were too low, compared to about 20 percent of white children.”

In late October, a Center on Budget and Policy Priorities Senior Research Analyst, Claire Zippel reported data collected from late July through September by the U.S. Census’s Household Pulse Survey. These data documented that, “Some 91 percent of families with low incomes (less than $35,000) are using their monthly Child Tax Credit payments for the most basic household expenses—food, clothing, shelter, and utilities—or education… Many of these households are receiving the full Child Tax Credit for the first time thanks to the American Rescue Plan’s credit expansion. The Rescue Plan temporarily increased the credit amount, provided for the credit to be paid monthly rather than once a year at tax time, and halted a policy that prevented 27 million children from receiving the full credit because their parents earned too little or lacked earnings in a given year.”

How did parents use the money?  Zippel continues: “Among households with incomes below $35,000 who received the Child Tax Credit, 88 percent spent their payments on the most basic needs: food, clothing, rent, a mortgage, or utility bills.  The Child Tax Credit payments also helped many parents and other caregivers invest in their children’s education, Pulse data suggest. Some 40 percent of families with low incomes used their Child Tax Credit payments to cover education costs such as school books and supplies, tuition, after-school programs, and transportation to and from school. (In some cases, these expenses may be for adults’ own education. About 5 percent of adults in low-income households with children are enrolled in school, other Census data show.)

The NY TimesClaire Cain Miller adds that in its current form in the U.S. House of Representatives: “The Build Back Better Bill also includes extensive investment in pre-Kindergarten for 3 and 4-year-olds and assistance for parents to afford childcare as well as dollars to ensure that “teachers in child care classrooms be paid a livable wage, equivalent to that of elementary teachers with the same credentials… Also as part of the proposal, pre-K lead teachers must have a bachelor’s degree in early childhood education or a related field, though they would be given six years to get the degree with some exemptions based on professional experience.”

Nobel Prize winning economist Paul Krugman strongly endorses these and other proposals to help families and their children: “Democrats may—may—finally be about to agree on a revenue and spending plan. It will clearly be smaller than President Biden’s original proposal, and much smaller than what progressives wanted. It will, however, be infinitely bigger than what Republicans would have done, because if the G.O.P. controlled Congress, we would be doing nothing at all to invest in America’s future. But what will the plan do?  Far too much reporting has focused mainly on the headline spending number.”

Krugman continues: “So let me propose a one-liner: Tax the rich, help America’s children.  This gets at much of what the legislation is likely to do. Reporting suggests that the final bill will include taxes on billionaires’ incomes and minimum taxes for corporations, along with a number of child-oriented programs.”

Krugman, the economist, comments on the economic arguments for Congressional passage of this bill: “(T)here is overwhelming evidence that helping children, in addition to being the right thing to do, has big economic payoffs. Children who benefited from safety-net programs like food stamps became healthier, more productive adults. Children who were enrolled in pre-K education were more likely to graduate from high school and go to college…. As I’ve argued in the past, the economic case for investing in children is even stronger than the case for investing in physical infrastructure.”

Krugman also believes that President Biden’s Build Back Better Bill, philosophically conforms to American political tradition: “Remember, we are the nation that basically invented universal education… America led the way in creating ‘common schools’ that were meant to include students from all social classes, and were justified by many of the same arguments now being made for universal pre-K and other forms of aid to children. So when Republicans denounce pro-child policies as socialist and try to promote private schools, they, not Democrats, are rejecting our nation’s traditions.”

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.”