Growing Body of Evidence Builds Case for Direct Cash Assistance for Families

With the upcoming 2025 expiration of temporary modifications to the Child Tax Credit enacted under the Tax Cuts and Jobs Act, a new debate on the future of the CTC and any future expansion looms for Congress in 2025.

Cash Assistance and Child Well-Being: Research and Policy Partnerships That Improve Children’s Lives, an online conference sponsored by the Urban Institute, the Berkeley Opportunity Lab and the Doris Duke Foundation held May 22, underlined the growing body of evidence of the positive impacts of the CTC expansion during the COVID-19 pandemic and other cash assistance trial projects that policymakers can draw on.

“This topic is going to be front and center again in 2025,” said Urban Institute President Sarah Rosen Wartell, with a mixture of mounting excitement about the potential of cash assistance policies as well as a growing push back and concern in some political circles. “It’s really important to step back from the political debate and look at the evidence.”

Colorado Sen. Michael Bennet (D) gave keynote remarks, saying that part of the populist upheaval roiling politics in the U.S. comes from a widespread belief among voters that government programs simply don’t work.

“What we are learning is that they do work,” Bennet said, stressing that communicating that evidence to the American people is crucial not just for successful anti-poverty policies, but to restore faith in democracy. “We have to do something to have people feel like they are part of a society where they actually matter,” he said. “Next year’s going to give us an opportunity to have a real debate in front of the American people.”

New York Times journalist Jason DeParle then moderated a discussion with two pioneers in the cash assistance movement—Michael Tubbs, the former mayor of Stockton, Calif., and founder of Mayors and Counties for a Guaranteed Income, and Natalie Foster, founder and president of the Economic Security Project.

Foster said that the experimentation in anti-poverty policy, including direct cash assistance, prompted by the COVID-19 pandemic has “opened the political aperture for what is possible in this country.” But she and Tubbs agreed that while evidence of the positive impact of those programs has brought a “sea change,” the movement needs to continue to grow and be even more ambitious.

“People want big change, and this is just the beginning of what that big change could be,” Foster said.

Hilary Hoynes, Co-Director of Urban’s Innovations in Cash Assistance for Children Initiative and Director of the Berkeley Opportunity Lab, led a panel of researchers who used their work to give just a sampling of the important new data on the impact of cash assistance.

• Kevin Werner, a nonresident fellow at the Urban Institute, presented results from his recent study that shows potential long-term impacts if the expanded CTC were made permanent. Werner found a 7 to 12% in income for CTC recipients—-or roughly $3,000 more per year—by age 30.
• Katherine Rittenhouse, an assistant professor, at the University of Texas, outlined her work that found increased child tax credits lead to a reduced rate of referrals to child welfare agencies.
• Lisa A. Gennetian, Pritzker Professor of Early Learning Policy Studies at the Sanford School of Public Policy, Duke University, gave a summary of the latest findings from the Baby’s First Years project, the first study in the United States to assess the impact of poverty reduction on family life and infant and toddler’s cognitive, emotional, and brain development. Initial findings found participants receiving a larger cash stipend have a higher net income, spent more money on child-focused expenditures and show no detectable increase in spending on alcohol and tobacco.

Margot Crandall-Hollick, acting Co-Director of the Innovations in Cash Assistance for Children Initiative and Principal Research Associate at the Urban-Brookings Tax Policy Center, directed a final panel that looked at the promising results from several new research and policy partnerships. The programs featured included Rx Kids, the first citywide program in the U.S. to address maternal and infant poverty through unconditional cash allowances to all pregnant moms and babies in the city of Flint, Mich.

Mona Hanna-Attisha, Associate Dean for Public Health, Michigan State University College of Human Medicine and one of the leaders of Rx Kids, said that the evidence for the successful impacts of cash assistance programs is overwhelming.

“We know the evidence, but we are doing a lot of research,” she said, noting that Rx Kids has already enrolled 700 moms, given out $1.5 million in cash assistance and is using administrative data sources to compile more evidence of impact.