Expand the Child Tax Credit
Written by ABC Audio All Rights Reserved on December 18, 2022
The problem is clear and harrowing:
In New York last year, 18.5% of people under 18 were living below the poverty line. These are toddlers, children, adolescents — the next generation.
The overall picture in the state was similarly grim for all ages, with the state enduring the 13th-highest poverty rate in the nation, according to a December report from the office of state Comptroller Thomas DiNapoli.
There is a straightforward — if politically tricky — solution: Expand the federal Child Tax Credit.
This tax benefit for families raising children is old enough to have been signed into law under Bill Clinton and expanded under George Bush, among many changes in who is eligible and how much money they receive. One of the most significant came in 2021, when Democrats expanded the program, increasing the amount of money parents could receive — up to $3,600 for the youngest children — and making households that had no income eligible for the boost.
The pandemic-era results were significant: The credit lifted 5.3 million people from poverty, including 2.9 million children, according to a recent analysis from the Census Bureau.
The one-year experiment showed how low-income parents were actually spending the money that, for a time, came in monthly installments: Food was at the top of the list.
Unfortunately, a tightly divided Congress was unable to renew the big expansion beyond 2021.
When we boost kids out of poverty, we enjoy a long tail of benefits. Children in dire financial situations often miss out on healthy food, stable housing, or good medical care, which can impact cognitive development or school performance. Everyone deserves a better start, and this is a direct, effective, and simple way for the government to help many provide for basic needs.
Fiscal hawks tend to oppose this kind of cash transfer, and the aid does not come cheap: the Congressional Budget Office estimated last year that making the 2021 credit permanent would cost $1.597 trillion over 10 years. A calculation by the nonpartisan Institute on Taxation and Economic Policy found a $92 billion yearly cost to expand the credit to where it was in 2021.
That’s significant, but it’s also close to the size of just the increase in this year’s defense authorization.
There are different compromises to be had over amounts, time spans, and income requirements that would affect the price tag. The year-end omnibus spending bill currently being hashed out in Washington might be the best moment to broaden the credit once again, given that Republicans are hungry for business-friendly tax changes and Democrats are facing a GOP-controlled House. Learn from one of the few wins from 2021, and make life better for children coast to coast.
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