Additional help from child tax credit ends, just as Covid resurfaces
This does not happen. Polls have found the public to be roughly divided on whether the program should be extended, with views varying along partisan and generational lines. And the expanded tax credit failed to convince the person whose opinion mattered most: West Virginia Democrat Senator Joe Manchin III, who raised concerns about the cost and structure of the program in its decision to oppose Mr. Biden’s climate, fiscal and social measures. policy bill. The bill, known as the Build Back Better Act, cannot be introduced in the equally divided Senate without the support of Mr Manchin.
For supporters of family allowances, the lack of an extension is all the more frustrating since, according to most analyzes, the program itself has been a remarkable success. Researchers at Columbia University estimate that the payments lifted 3.8 million children out of poverty in November, a nearly 30% reduction in the child poverty rate. Other studies have shown that the benefit reduced hunger, reduced financial stress among recipients, and increased overall consumer spending, especially in rural states that received the most money per capita.
Congress last spring expanded the existing child tax credit in three ways. First, it made the benefit more generous, offering up to $ 3,600 per child, up from $ 2,000. Second, he began to pay off the loan in monthly installments, usually deposited directly into recipients’ bank accounts, turning the annual windfall into something closer to the child allowances common in Europe.
Finally, the bill made full benefits available to millions of people who previously had not been able to take full advantage of the credit because they earned too little to qualify. Poverty experts say the change, known in tax parlance as “full refundability,” was particularly significant because without it, a third of children – including half of all black and Hispanic children, and 70% of children raised by single mothers – did not receive full credit. Mr. Biden’s plan would have made this provision permanent.
âWhat we saw with the child tax credit was a political success that was unfolding, but it’s an achievement that we risk stopping just as it started,â said Megan Curran, director of policy at Columbia’s Center. on poverty and social policy. âThe weight of proof is clear here in terms of what the policy does. This reduces child poverty and food shortages.
But the expanded tax credit doesn’t just go to the poor. Couples earning up to $ 150,000 a year could receive the full benefit of $ 3,600 – $ 3,000 for children 6 and over – and even the wealthiest families qualify for the initial credit of 2 $ 000. Critics of the policy, including Mr Manchin, have argued that it makes little sense to provide assistance to relatively well-off families. Many proponents of credit say they would willingly limit its availability to richer households in return for maintaining it for poorer ones.
Mr Manchin also publicly questioned the wisdom of unconditional cash payments and privately expressed concerns that recipients might spend the money on opioids, comments that were first reported by The Wall. Street Journal and confirmed by someone familiar with the discussion. But a Census Bureau survey found that most beneficiaries used the money to buy food, clothing, or other essentials, and many saved some of the money or paid back their expenses. debts. Other surveys have found similar results.