Wednesday, July 15, was a historic day for our country. For the first time, the United States joined our peer nations, sending tax relief to poor, working, and middle class families in the form of an Advanced Monthly Child Tax Credit: $250 per child, $300 for younger children, each month. Parents report buying diapers and food, paying for team uniforms, and having a little more certainty about making next month’s rent. The expanded Child Tax Credit expires after one year, but there is broad support among our colleagues to make this expansion permanent.
With the election of Joe Biden and Kamala HarrisKamala HarrisTwo 'View' hosts test positive for coronavirus ahead of Harris interview Rep. Karen Bass to run for mayor of Los Angeles: report Biden taps big bank skeptic to for top regulatory post MORE, alongside majorities in the House and the Senate, Congress stepped up by passing the historic American Rescue Plan less than 100 days into the new term. Shots in arms. Checks in pockets. America has begun to emerge from the shadows of the pandemic and related economic calamity. As President BidenJoe BidenFighter jet escorts aircraft that entered restricted airspace during UN gathering Julian Castro knocks Biden administration over refugee policy FBI investigating alleged assault on Fort Bliss soldier at Afghan refugee camp MORE reminds us, our job now is to “build back better” as we face simultaneous crises and need to make progress on each: the pandemic, economic inequality, racial inequity, and the climate crisis.
Congress is now faced with the challenge of meeting our urgent needs — needs that existed before the pandemic and needs that will continue long past the time when the pandemic subsides. As chairs of the House Appropriations Committee and House Budget Committee, we feel a particular responsibility to meet the moment in a responsible way for our budget — both fiscally and budgetarily.
At the same time, we face a ceiling on what we can pass in a bill that must receive majority support in both chambers before becoming law. Balancing the many necessary investments with the imposition of a budget constraint is often viewed as an almost intractable problem. Fortunately, in one of the most important areas there is good news, but only if Congress recognizes the facts.
New research from Columbia University shows that making the landmark changes to the Child Tax Credit permanent will yield dividends to taxpayers over the long term. Doing an exhaustive metanalysis of the literature, the Columbia researchers find if the Child Tax Credit expansion is made permanent that taxpayers will actually earn back 84 cents for every dollar invested. Why? The evidence shows:
· Children will learn more and earn more later in life, leading to increases in tax payments.
· Children are less likely to be neglected, leading to decreases in child protection costs.
· Children are less likely to end up participating in criminal activity, leading to savings in costs of law enforcement.
· Children are likely to be healthier leading to decreased health care costs.
· Even the parents of children are likely to be healthier leading to further decreases in health care costs (in fact, scholars have found that such a policy leads to reductions in drinking and smoking among parents of recipients).
In short, when children and families receive these tax credits, they will learn more, earn more, and grow up healthier and less likely to end up incarcerated.
In fact, while making the Child Tax Credit permanent will save taxpayers money, it will also be a boon for American society as a whole. The Columbia scholars find that a permanent Child Tax Credit expansion returns nearly $8 for every $1 spent. Children who grow up to earn more will reap their own rewards, as will the businesses that profit off a better-trained workforce. Those additional savings from this policy may not flow directly to federal coffers, yet they are still investments for America.
But we can only achieve these returns if we make the Child Tax Credit expansion permanent. It is the certainty of the program, month after month, year after year, that leads to the benefits our nation should enjoy.
It is rare in public policy to have a win-win-win. Cut taxes for the working and middle classes. Cut child poverty in half. Return most of the money to taxpayers. And save money for society. In order to lock in this win, Congress must follow the evidence of the real economic impacts of the policy.
We simply cannot miss this opportunity to make the Child Tax Credit permanent. We cannot put ourselves in an arbitrary straitjacket that has no relationship to the facts and ignore the real economic impacts of the policy.
When it comes to coronavirus, we have depended on the evidence of researchers to enact policies to move us past the pandemic. It is time for Congress to again follow the evidence and make the Child Tax Credit expansion permanent.
Congresswoman Rosa DeLauroRosa DeLauroHolding back on defensive systems for Israel could have dangerous consequences On The Money — Democrats rush to finish off infrastructure Overnight Defense & National Security — Presented by AM General — Defense bill takes center stage MORE serves as chair of the House Appropriations Committee and represents Connecticut’s 3rd District. Congressman John YarmuthJohn Allen YarmuthHouse Democrats set 'goal' to vote on infrastructure, social spending package next week House panel set to take up Democrats' .5T bill this weekend The Hill's Morning Report - Presented by Alibaba - Biden jumps into frenzied Dem spending talks MORE serves as Chair of the House Budget Committee and represents Kentucky’s 3rd District.