An evidence-based response to rising child poverty — reform and expand the Child Tax Credit
COVID-19 is the biggest health and economic crisis in our lifetimes. Nurses and doctors are in intensive care units trying to save lives. Over the last few months, it has become clear that the most effective response to the virus will depend on science. Estimates of infection spread, deaths, and risks of exposure should guide our allocation of resources to the areas that will have the greatest impact.
Science should also drive our response to the economic impact of the pandemic. While older Americans are at particular risk of succumbing to the health impacts of the virus, a new Columbia University study shows children are among those who are at particular economic risk at this moment. The researchers estimate that poverty rates are rapidly climbing, potentially to the highest levels since the measure was created in 1967, with the rise in poverty rates among African-Americans and children especially alarming.
Fortunately, there is a simple evidence-based solution to this problem: put money directly in families’ pockets.
We did that with one of the recent relief bills Congress passed, the CARES Act. But we know the fallout from this crisis is ongoing, and we need a sustained response over many months. Families are worried about how they’ll afford groceries and diapers and formula if they’re laid off or have their hours cut. They’re hoping the businesses they work for will survive this and stressed about making rent or finding a new job if they don’t. We already have a simple and effective evidence-based solution to support these families and their children: the Child Tax Credit (CTC). By expanding and improving the Child Tax Credit, we can directly address the rising rates of child poverty.
The Child Tax Credit is our nation’s largest federal expenditure on children, yet right now, it leaves behind a third of all children who are in families who earn too little to get the full credit. The National Academy of Sciences found that of any policy it examined, an improved Child Tax Credit – one that includes the children left behind by the current policy – would have the greatest impact on reducing child poverty. Right now, those disproportionately left behind include families with young children, families headed by women, and rural families. The current credit also leaves out half of African-American and Hispanic children. Over the coming months, while most families will receive $2,000 per child in their regular 2019 tax refunds, these “left behind” kids will not.
How can we fix this? By expanding and improving the Child Tax Credit in the next relief package Congress passes. First, we should make the Child Tax Credit fully refundable so that the millions of children in families who earn too little to get the full credit get the same help as other kids. This would provide the biggest boost to the poorest families, by simply providing the same Child Tax Credit to lower-income families that middle- and upper-middle-class families already receive.
Second, we should provide an extra $1,000 to all children through the Child Tax Credit and an additional $600 for young kids under the age of six who are most at risk. Doing so would provide extra assistance to all families with children, who will need additional support during this crisis. In advance of the first CARES Act, Speaker of the House Nancy Pelosi (D-Calif.) called for a Child Tax Credit expansion that did exactly this.
We also need to ensure all families and workers get the financial boost they need to get through this pandemic and to get our economy moving again. Gaps in the Earned Income Tax Credit (EITC) mean that low-wage seniors over 64 and young adult workers not raising children in the home do not qualify. Some 5 million workers without children are taxed into or deeper into poverty, receiving only a small EITC benefit. We can fill these gaps – and give families the choice to use their 2019 wages when filing to make sure they’re not penalized with a lower CTC and EITC benefit when they file taxes in 2021 – in this next package.
It took a dozen years after the Great Recession for poverty rates to fall back to where they were beforehand. Research tells us who is most at risk now. Expanding the Child Tax Credit will help avoid the long-lasting damage caused by severe economic insecurity and speed our economic recovery. Congress must implement this evidence-based policy now — these kids and families can’t wait.
Rosa DeLauro represents Connecticut’s 3rd District and is chairwoman of the Labor, Health and Human Services, and Education Appropriations Subcommittee; Suzan DelBene represents Washington’s 1st District and is a member of the Ways and Means Committee; Sherrod Brown is Ohio’s senior senator and Michael Bennet is Colorado’s senior senator.