Build Back Better Would Reduce Economic Injustice Among America’s Children

Today, with the Build Back Better Bill awaiting action in the U.S. Senate, it’s a good time to reflect on the Victorian British attitude that prefigured Americans’ faith in personal responsibility. Mr. Bumble, the parish beadle who oversees provisions for the poor in Charles Dickens’ Oliver Twist, complains: “We have given away… a matter of twenty quartern loaves and a cheese and a half, this very blessed afternoon, and yet them paupers are not contented… Why here’s one man that, in consideration of his wife and large family, has a quartern loaf and a good pound of cheese, full weight. Is he grateful, ma’am? Is he grateful? Not a copper farthing’s worth of it!  What does he do, ma’am, but ask for a few coals; if it’s only a pocket handkerchief full, he says! Coals! What would he do with coals? Toast his cheese with ’em, and then come back for more. That’s the way with these people, ma’am; give ’em a apron full of coals to-day, and they’ll come back for another the day after to-morrow, as brazen as alabaster.”

This blog quoted from Charles Dickens’ Oliver Twist in December of 2017 in a post criticizing an important economic policy: Congressional passage of President Donald Trump’s tax cuts for wealthy individuals and corporations. In our culture, even though we profess a commitment to progressive taxation, we like to use tax cuts to reward the enterprising—celebrities, tech wizards, and enormous corporations.

Assuming that people can pull themselves up by their bootstraps, we publicly neglect those who fall behind. The problem has been bipartisan. The 1996 welfare reform law Bill Clinton pushed through Congress was called the Personal Responsibility and Work Opportunity Act. Its name presumed that the poor are irresponsible and lazy. Welfare’s replacement—Temporary Assistance for Needy Families (TANF)—left our society with alarming poverty and inequality. The law was inequitably administered by state governments.  It also turned out to live up to its name: Temporary Assistance. Many states phased out assistance and cut out the employment training programs that had not been designed well enough to prepare workers for available jobs. And the minimum wage stayed so low that people who did find jobs were paid so little they could not rise above the federal poverty level.  Nobody did anything about the children whose families struggled to survive.

Right now, the U.S. House of Representatives has passed the Build Back Better Bill which represents a radically different philosophy: President Biden’s commitment to helping children whose families live in poverty instead of punishing their parents.  The U.S. Senate is negotiating its version, which many hope to see passed by the end of 2021.

The Center on Budget and Policy Priorities explains why a single reform in the Child Tax Credit—making it fully refundable for families with very low income—is for America’s children the most important element in Build Back Better: “Making the full Child Tax Credit available for families with low or no earnings in a year, often called making it ‘fully refundable,’ is expected to generate historic reductions in child poverty compared to what it would have been otherwise. Before the Rescue Plan made the full Child Tax credit fully available in 2021, 27 million children in families with low or no income in a year received less than the full credit or no credit at all.” In the American Rescue relief bill last spring, Congress made three significant changes in the Child Tax Credit: raising the maximum Child Tax Credit from $2,000 to $3,600 per child through age 5, and $3,000 for children age 6-17; allowing families to receive a Child Tax Credit for 17-year-olds; and making the Child Tax Credit fully refundable for the year 2021.  The House version of the Build Back Better Bill extends the first two provisions only through 2022, but the House version permanently makes the Child Tax Credit fully refundable:

“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.”  “Until last spring’s COVID relief bill, many children had been excluded 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.  Build Back Better, in one of its signature achievements, would make this policy advance permanent.”  (emphasis in the original)

In a new report last Friday, the Center on Budget and Policy Priorities warns about what we can expect if the U.S. Senate fails to pass the Build Back Better Bill by the end of December, 2021 and allows to expire the reforms instituted temporarily for this year alone in last spring’s American Rescue Plan: “If Build Back Better isn’t enacted, the Child Tax Credit would revert to providing the least help to the children who need it most — and some 27 million children would once again get a partial credit or none at all because their families’ incomes are too low.”

The First Focus for Children Campaign outlines other urgently needed reforms included in the House version of the Build Back Better Bill: “The Children’s Health Insurance Program, CHIP, which covers roughly 10 million children would be made permanent, sparing it from serial expiration every few years.”  The bill would also require states to make children’s eligibility continuous over all 12 months for CHIP and Medicaid; would guarantee 12 months (instead of 60-days) of postpartum coverage for mothers on Medicaid; and would provide 4-weeks of paid leave for new parents and expand family leave. Build Back Better would significantly expand access to quality child care and phase in universal pre-K for 3- and 4-year-olds. For young adults aging out of foster care, the law would lower the age of eligibility for the Earned Income Tax Credit from 25 to 18. The bill would also address hunger among children by making meals available during the summer months when school is not in session.

None of these programs directly invests in public education, but together they will improve educational opportunity. Why?  We know that a family’s economic circumstances affect children’s opportunity at school. Recently this blog covered a new report that 101,000 students in the New York City Public Schools—10 percent of the district’s students—were homeless in the past year.  Decades of research show that such challenges directly affect students’ experiences at school.

The Regents’ professor emeritus at Arizona State University and former president of the American Educational Research Association, David Berliner explains: “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… 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.)

in 2013, the Stanford University educational sociologist, Sean Reardon released a massive data report confirming the connection of school achievement gaps to growing economic inequality and rapidly growing residential patterns of economic segregation in metropolitan areas. Reardon documented that across America’s metropolitan areas the proportion of families living in either very poor or very affluent neighborhoods increased from 15 percent in 1970 to 33 percent by 2009, and the proportion of families living in middle income neighborhoods declined from 65 percent in 1970 to 42 percent in 2009.  Reardon also demonstrated that along with growing residential inequality is a simultaneous jump in an income-inequality school achievement gap among children and adolescents. The achievement gap between students with income in the top ten percent and students with income in the bottom ten percent is 30-40 percent wider among children born in 2001 than those born in 1975.

For the sake of our children and to ensure they can thrive at home and at school, the United States needs to do better. During the Victorian era, Charles Dickens castigated a society that forgot about the well-being of children and sought to punish their parents for laziness. Today, we ought to notice that, like the parish beadle, Mr. Bumble, in Oliver Twist, too many members of Congress have for decades conditioned any sort of public assistance as a punishment for parents’ lack of “personal responsibility.” For too long, Congress has been willing to forget our public obligation to the children who are always the victims of poverty.  President Biden’s approach in Build Back Better instead addresses the vulnerability and distress of too many American children—as a matter of economic justice.

Income Inequality Tears the Social Fabric and Undermines School Achievement

Inequality, Unbelievably, Gets Worse,” declared Steven Rattner two weeks ago on the op ed pages of the NY Times.  He points to data released by the Federal Reserve documenting that, “Inflation-adjusted earnings of the bottom 90 percent of Americans fell between 2010 and 2013, with those near the bottom dropping the most.  Meanwhile, incomes in the top decile rose.”  Rattner attributes much of the problem to our tax laws: “And income taxes for the highest-earning Americans have fallen sharply, contributing meaningfully to the income inequality problem.  In 1995, the 400 taxpayers with the biggest incomes paid an average of 30 percent in taxes; by 2009, the tax rate of those Americans had dropped to 20 percent.

Rattner worries that dropping tax rates on the citizens with the greatest capacity to pay are tearing the fabric of our society: “Lower taxes means less for government to spend on programs to help those near the bottom… The United States, which is the only developed country without a national paid parental leave policy, also has no mandated paid holidays or annual vacation; in Europe, workers are guaranteed at least 20 days and as many as 35 days of paid leave.”  Rattner notes that even the International Monetary Fund has “suggested that a more equal distribution of income could… raise the growth rate because of the added access to education, health care and other opportunities.”

When people with the means to pay taxes are excused from that civic responsibility it does mean less spent on public education.  As the Center on Budget and Policy Priorities continues to remind us, 30 states are, in inflation-adjusted dollars, still spending less on public schools than before the 2008 recession.  There is also substantial evidence that the growing divide between families with means and those in dire need is affecting public school achievement in other ways.

For one thing residential housing patterns track the growing income divide.  Stanford University sociologist Sean Reardon, who studies housing segregation, has documented that by 2009 the proportion of families in major metropolitan areas living in either very poor or very affluent neighborhoods had increased—to 33 percent (from 15 percent in 1970) and the proportion of families living in middle income neighborhoods had declined to 42 percent in 2009 (from 65 percent in 1970), with increased segregation at both ends of the income distribution.  Both high-and low-income families became increasingly residentially isolated in the 2000s, resulting in greater polarization of neighborhoods by income.  The strongest trend is the increasing residential isolation of the rich.

Reardon has also demonstrated  that along with growing residential inequality is a rapidly growing income-inequality school achievement gap between the children in richest ten percent and the children in the poorest ten percent, a gap that is 30-40 percent wider among children born in 2001 than those born in 1975.  Today the income inequality achievement gap is twice as large as the black-white achievement gap.  Greg Duncan and Richard Murnane, who have studied the educational consequences of income inequality add that, “Among children growing up in relatively affluent families, the four-year college graduation rate of those who were teenagers in the mid-1990s was 18 percentage points higher than the rate for those who were teenagers in the late 1970s.  In contrast, among children from low-income families, the graduation rate was only 4 percentage points higher for the later cohort than for the earlier one.”  Duncan and Murnane conclude: “By widening the gap in educational opportunities between children from low-and higher-income families, increasing income inequality jeopardizes the upward socioeconomic mobility that has long held our pluralistic democracy together.  Improving educational outcomes for children growing up in low-income families is therefore critical to the national’s future and requires a combination of policies that support low-income families and measures to improve the quality of schools that low-income children attend.”

In a Thanksgiving message on his blog at Chicago Theological Seminary the Rev. John Thomas, retired general minister and president of the United Church of Christ, lists some of the economic policies that have contributed to growing inequality and that could be adjusted to help those struggling at the bottom of our economy:  “The list of sins is long: Trade policy that moved jobs out of the U.S., refusal to raise the minimum wage to a living wage, deregulation of financial institutions that led, in significant measure, to the Great Recession, stripping rights from public employee unions and scaling back benefits of retirees to pay for the misdeeds of politicians who grossly underfunded pensions, the refusal of policy makers to provide adequate job stimulus or address the housing foreclosure crisis while bailing out large financial institutions, the explosive growth of the influence of money in politics…, the radical inequality of public school funding, tax codes that benefit investors over wage earners, corporations over individuals, the refusal of many states to expand Medicaid, and the continuing assault on the Affordable Care Act…  The descent of the working class into near or complete poverty is no accident.  It is willful policy and willful indifference—private and governmental—and as its corrosive effects creep across our economy the health of our democratic society is increasingly challenged.”