Child poverty fell by a whopping 46% from 2020 to 2021, the largest year-to-year decrease ever recorded. (Photo by Spencer Platt/Getty Images)
If you could prevent millions of children from falling back into poverty, would you? Most of us, I imagine, would answer “yes” without hesitation.
But not Congress. For nearly a year, lawmakers in Washington, D.C., have dithered as the policy directly responsible for a dramatic decline in poverty last year lapsed. It’s time for Congress to bring back the enhanced Child Tax Credit.
New poverty figures by the U.S. Census Bureau has left no doubt that we can end poverty if we choose to do it. In 2020, the rate of childhood poverty stood at 9.7%. By 2021, it had dropped to just 5.2% — a whopping 46% decline. It was the largest year-to-year decrease ever recorded. In the blink of an eye, 2.1 million children in our nation no longer lived below the poverty line.
The reason for the massive decline in childhood poverty is clear. It is the result of improvements to the Child Tax Credit included in the last federal pandemic relief package that Congress passed in March 2021.
Congress strengthened the Child Tax Credit in several ways. First, it upped the amount of cash families get from the credit. Lawmakers also reworked the credit so that the lowest-income families could receive the full benefit, just like middle-class families can. Finally, Congress made it so that the benefits of the Child Tax Credit arrived in monthly installments, rather in a lump sum after families filed their tax returns, thus helping them better cope with their monthly bills.
These improvements to the Child Tax Credit proved a powerful tonic for the financial ills plaguing families struggling to get by on low wages. Most of the money went to pay for essentials like food, utilities, and rent. The tax credit also helped families cover expenses related to their children’s education, such as school books and supplies, tuition and after-school programs. These uses were particularly evident in the case of Black, Latino, and other families of color.
The one hitch with the plan was that the improvements to the Child Tax Credit were temporary. The changes expired in January of this year. And so far, Congress has yet to reinstate this more effective version of the Child Tax Credit.
The expiration of the enhanced Child Tax Credit comes at an especially bad time for families surviving on low wages. The cost of food, rent, and other essentials has been rising rapidly over the past year. While higher income families have room to absorb price increases, low-income families have no wiggle room. They already make too little to get by on. At the very least, a stronger Child Tax Credit would help families with children keep up with the rising cost of essentials.
Long term, a stronger Child Tax Credit offers to transform the lives of our most vulnerable children. There is overwhelming evidence that growing up with economic insecurity — without reliable access to such basics as food, shelter, or health care — is damaging to kids. Children who experience poverty have worse outcomes in virtually every way, from physical and mental health, to school performance, to earnings when they become adults. By strengthening the economic security of families, the Child Tax Credit helps children reach their full potential.
But right now, millions of children are falling back into poverty, due to congressional inaction. Congress stands idle as children needlessly suffer, despite having a proven remedy on hand.
There is still a chance for Congress to redeem itself. An anticipated end-of-year budget bill is the perfect opportunity to bring back the enhanced Child Tax Credit. Members of Congress should push hard to ensure that they and their colleagues do right by our nation’s most vulnerable children.
The evidence gathered over the past year has removed any shred of doubt that poverty is a policy choice. It is not inevitable. It would be a failure of leadership for Congress to send millions of children back into poverty.
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