Home Credit report Democrats want to bring back Biden’s child tax credit since it reduced poverty

Democrats want to bring back Biden’s child tax credit since it reduced poverty

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  • A measure of the poverty rate fell to its lowest level last year, according to a new report from the Census Bureau.
  • Expanding the Child Tax Credit has helped cut child poverty by about half, and some Democrats want to bring it back.
  • Poverty could rise next year since programs like direct payments were only temporary.

The poverty rate fell to 7.8% in 2021, the lowest level on record due to extraordinary federal assistance last year, according to a new Census Bureau report released Tuesday.

Much of that stems from stimulus checks, enhanced unemployment benefits and a monthly child allowance briefly established as part of President Joe Biden’s stimulus bill.

The new report also indicates that the number of children living in poverty has been reduced by approximately half. The data comes from the Supplemental Poverty Measure, a measure that takes into account federal assistance such as food stamps, the child tax credit and wages. The official poverty rate, which does not take into account aid such as MPS, rose to 11.6%.

The PMS rate for children was 5.2% in 2021 after being almost twice as high at 9.7% in 2020. In 2009, the PMS rate for those under 18 was 17.0% .

Experts said the enhanced child tax credit was among the federal relief programs with the biggest impact.

“This is what policy success looks like,” Chuck Marr, vice president of federal tax policy at the Center on Budget and Policy Priorities, told Insider. “This is a historic achievement to reduce child poverty by a record amount through the expansion of the Child Tax Credit.”

“Generally, you might see a steady decline,” Joshua McCabe, a policy pundit at the libertarian-leaning Niskanen Center, told Insider. “But in this case, at least for the kids, it was a pretty big drop.”

Marr said that “what led to this reduction in poverty was that for the first time the child tax credit was fully available to low-income children, just as it is available to children in the middle class”.

He added that since the expanded child tax credit has expired, “the challenge now is for Congress to extend it.”

Some Democrats want to restore the expanded child tax credit

The Enhanced Child Tax Credit provided up to $300 per monthly check per child to parents for six months. But resistance from Republicans and Sen. Joe Manchin of West Virginia prevented Democrats from expanding it as part of their ill-fated Build Back Better plan in 2021. No child benefit was included in the Democratic bill. on health, climate and taxes adopted last month.

Now some Democrats like Sens. Sherrod Brown of Ohio and Michael Bennet of Colorado want to use an expiring portion of the 2017 Republican tax cuts to bring Republicans to the negotiating table for a deal by year’s end. The White House supports them, Axios reported.

“We shouldn’t be extending corporate tax relief at the end of this year without also extending the expanded child tax credit,” said Bennet, Brown, Sen. Cory Booker of New Jersey and Reps. Rosa DeLauro of Connecticut. , Ritchie Torres of New York, and Suzan DelBene of Washington said in a statement Tuesday.

These figures follow a recent comprehensive analysis by the research organization Child Trends, which found that child poverty has fallen by 59% since 1993, with children of all races and states having less need for multiple parameters during this period.

Nearly 28% of children were classified as poor in 1993, according to the researchers, “poor” defined as not having the income deemed necessary to meet basic needs. By 2019, that metric had fallen to around 11% — and that’s not counting what temporary pandemic relief has done to further reduce that.

Research from Child Trends suggests that the expansion of the social safety net has only helped reduce child poverty over the years, even in light of economic crises like the Great Recession.

Sharon Parrott, president of the Center on Budget and Policy Priorities, said in a statement without the child tax credit expansion, “some 2.1 million additional children would have lived in families with incomes below the poverty line”. This number was also highlighted in a Census Bureau article.

There was also some other positive news from the Census Bureau on Tuesday as well. The share of Americans with health insurance soared to 91.7% in 2021, a slight increase from the previous year. This is partly due to the enhanced Affordable Care Act grants made available to people under the stimulus act. It allowed low-income Americans to pay a small amount or nothing for private health care.

Without measures like the expanded child tax credit, poverty likely increased in 2022.

“I certainly fear that without these economic impact payments and child tax credits, we will see an increase in poverty in 2022,” Elise Gould, senior economist at the Economic Policy Institute, told Insider. “So we know that some of these measures have helped reduce things like food insecurity. So, unfortunately, I think without them we’re going to see an increase in hardship in 2022, even though we’ve had a growing economy. .”