Expansion of child tax credit gains bipartisan momentum
In a sure-to-be closely divided Congress no matter what happens in next month’s Georgia Senate runoffs, an expansion of the child tax credit is emerging as an issue that could generate crucial bipartisan support. Michelle Dallafior, Senior Vice President for Budget and Tax at First Focus Campaign for Children, spoke to Spotlight about the need for an expansion, particularly given the toll from the coronavirus pandemic on children and families, as well as her optimism about legislative movement on the issue in 2021. This transcript has been lightly edited for length and clarity.
There’s increasing bipartisan interest in a potential child tax credit expansion or child allowance in the new Congress. Tell us why it’s gaining momentum.
First of all, no child in the world’s wealthiest nation should go to bed hungry or miss opportunities to thrive because they don’t have a safe place to live, grow and learn. One of our major goals at First Focus on Children has been to tackle the persistent, stubbornly high level of child poverty in the United States. There is plenty of research out there that shows that growing up in poverty has life-long consequences for children’s physical and mental health as well as their economic and financial wellbeing. The National Academies of Sciences, Engineering and Medicine study on child poverty in 2019 found that poverty itself causes negative child outcomes, especially when it starts in early childhood or persists through the early part of the child’s life. That report also outlines how a $3,000 per year child allowance, which could be offered as an extension of the child tax credit, could be one of the most effective measures to reduce child poverty. It also would disproportionately address poverty for Black and Hispanic children as well.
Another important point in the National Academies study is that while there definitely are negative consequences for individual children, child poverty causes negative national economic consequences as well. The report points out that child poverty can cost the US economy around $800 billion to $1 trillion a year. So, when we look at implementing a program like the one put forth in the American Family Act, and there are companion bills in the House and Senate, the price tag on these bills is much, much lower, closer to $100 billion a year. And the impact is pretty significant – current research shows a program along the lines of the one contained in the American Family Act would reduce child poverty by over 42%, with a 52% reduction for Black children and 41% for Hispanic children. That’s pretty remarkable. The research also points out that children in households who receive a boost in income have positive outcomes – they are healthier, they perform better in school and they have a better chance to succeed as adults. In addition, the Academies report points to the fact that increased household income has a positive impact in relieving parental stress, and that gives parents more time and mental energy for their children.
We know this strategy works, as many of our peer countries who have similar programs that offer a child allowance or child benefit programs see results that are incredibly positive. In the U.K. for example, they cut child poverty in half between 1999 and 2008 and Canada has reduced child poverty by over a third since 2015. We have examples of success, and the American Family Act would see about 4 million children lifted out of poverty.
There’s also evidence that during the pandemic, when the CARES Act was first passed, even in the midst of a national crisis additional cash payments were clearly having a dramatic impact in helping families.
That’s right. There is a Columbia University report that looked at how the unemployment program and the stimulus payments, taken together, had the effect of temporarily preventing child poverty from spiking significantly. That’s another example of how we know that getting these cash benefits into the hands of families with children makes a difference. It works.
The incoming administration has endorsed this legislation – do you have a sense of how high it is on their radar screen?
That’s a good question. I think it is relatively high on their radar screen. I can say that we worked with Senator Harris closely on a number of kids’ issues and she included significant CTC improvements in her platform when she was running for president. I understand that a number of the groups in the transition process have the CTC expansion as an important measure to pursue not only to address the immediate crisis from the pandemic, but also to help address racial and economic disparities. I think it’s quite high on their radar.
And I think in terms of optimism within the children’s advocacy community about passing some form of a child allowance program, it’s really growing. I have been with First Focus about three years now, and I can say that in that short time, I feel the momentum for improvements in the child tax credit has grown noticeably. And we have seen bipartisan members of Congress come together on such policy changes. Senator (Michael) Bennet (D-CO) and Sen. (Mitt) Romney (R-UT) teamed up and put together some bipartisan solutions on the refundable tax credit, including an extension of the child tax credit. We’ve seen Senators Rubio and Lee push for CTC expansion back in 2017 and Senator Rubio also has legislation that would help additional stimulus payments reach immigrant families and children. Sen. (Bill) Cassidy (R-LA) has a stimulus payment bill, and several of his Republican colleagues have sponsored the legislation. So, we feel very good about that bipartisan support. And depending on what happens with the Senate runoffs in Georgia, optimism and hope grow even more with the possibility that Senator (Chuck) Schumer (D-NY) is in charge of that chamber.
I would also say that Speaker Pelosi has been a fierce leader on this issue and the members who have introduced legislation are just tremendous — we named them Champions and Defenders of children in our annual legislative scorecard. When you’re looking at that broader, big picture I think we have an outstanding team on the field to advance a permanent child benefit toward the goal line.
And the challenges for children, sadly, will be even greater as the new year begins
Every aspect of kids’ lives is being impacted by COVID, we see surging rates of child hunger, rising homelessness, deepening learning gaps, and growing childcare needs as our children’s physical, emotional, and social well-being are negatively affected. They are not immune to the virus and they are losing parents and grandparents. Hunger and homelessness are rising faster than we can track almost. It is pretty dire and overwhelming. And on top of that, one of the arguments that we heard earlier in the summer about why we can’t make improvements to the child tax credit and the Earned Income Tax Credit was that they were trying to do something more immediate and that tax credits wouldn’t kick in until 2021. Well, we are almost there now and I think we have made a strong case for a regular monthly payment that then can go to the very issue we’re talking about here – people being able to expect a regular, monthly cash benefit and that would be incredible support for families with children. For them to know on a monthly basis that they are going to get some support would be really important especially now. But even before the pandemic, we had a persistently high level of child poverty in this country – children in the United States continue to experience poverty at a rate 54 percent higher than adults — and we have a moral obligation to do something about that.
Do you feel like the anti-hunger community is united around this goal?
My short answer would be yes. I can’t say everybody perfectly agrees on all the details, but I do think that support is building. Even outside the child advocacy space, we are seeing momentum grow among partner organizations.