Growing number of families struggle to meet expenses after child tax credit expires

(The Hill) – An extension of the child tax credit included in a coronavirus relief package passed last year has helped lift millions of American children out of poverty in what experts have called the one of the most successful anti-poverty experiments ever conducted in the United States.

But that expansion ended at the end of 2021, and new federal data shows that a growing number of households with children are now facing difficulty paying for ordinary household expenses, putting a generation of children at risk. , just a few months ago, were on the verge of escaping poverty.

More than a third of families with children, 35%, said they were now struggling to cover ordinary costs in late January and early February after payments ended, according to a new US Census Bureau survey. This figure is up from the 30% who struggled to cover costs last year when payments were still being distributed.

“These payments were so effective because they were such a crucial investment for children,” said Kris Cox, deputy director of federal tax policy at the Center on Budget and Policy Priorities. “The global expansion of the Child Tax Credit was expected to lift millions of children out of poverty.”

Previous surveys have shown that around one in four households use child tax credit payments to cover expenses, money that is no longer available. The current survey showed that around a third of families with children said they did not have enough food sometimes or often.

The expanded Child Tax Credit payments were equivalent to $600 for a family of four with two children under age 5, equivalent to a quarter of the federal poverty level. More than 36 million families received monthly payments of up to $300 per child under age 5 and up to $250 for children ages 6 to 17, wrote Katherine Giefer, a statistician with the Division of Census Bureau social, economic and housing statistics.

Congress did not renew the tax credit at the end of 2021. An expansion was part of the Build Back Better plan that died late last year, facing opposition from Republicans in the Senate and the Sen. Joe Manchin (DW.Va.), who opposed several elements of the plan.

The impacts of poverty on children extend far beyond a child’s current situation, said Rich Besser, former director of the Centers for Disease Control and Prevention who now heads the Robert Wood Johnson Foundation, which supports the credit expansion.

“Poverty is tied to so many things in a child’s life,” Besser said in an interview. “When you look at the impact of poverty, poverty means a family is in a stressful situation. This means that a family risks not having enough to eat, risks being evicted, risks having the heating cut off in winter.

“The chronic stress you feel because of poverty is detrimental to your health. This type of chronic stress response is extremely detrimental to physical health,” he said.

The Census Bureau’s Household Pulse Survey, an experimental series of polls designed to test the impacts of the pandemic and associated economic disaster and recovery in near real time, tracked how families spent their welfare payments. child tax credit in recent months.

Economists said they were pleased with the results, which showed families were spending on necessities and common expenses, rather than extravagances or savings. About one in four households with children said they used the payments to cover expenses. Households with children who struggled to cover expenses were twice as likely to use payments to make ends meet; these families were eight times more likely to borrow money from friends and family and when times got tough.

“Nine out of ten low-income families used this money to pay for living expenses. Food, utilities, housing. It was really crucial support to help families who were struggling to make ends meet,” Cox said. “Families spent this money exactly as we would have planned on crucial day-to-day expenses.”

And the expansion has provided more money for the poorest, especially black and Latino children. About half of black and Latino families were not receiving the full child tax credit because their incomes were too low, a gap that the expansion of the US bailout has closed.

Now supporters of expanded credit have warned that progress made over the past year is in danger of unraveling, pushing millions of children back into poverty, which could have long-lasting effects on their physical wellbeing. and mind.

“The incredible benefits of the expanded tax credit, the reduction in child poverty, the reduction in stress of not being able to pay the bills, that’s going to go away,” Besser said. “These are real, and the idea that as a nation something as simple as that can reduce child poverty by 40% or even more, that kind of program that we don’t celebrate and that we do not immediately make permanent is inadmissible.”


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