Congress failed to extend funding for the credit, and many families reflected on how the payments shaped their lives amid COVID-driven economic uncertainty and how they are getting by now.
By: Laura Santhanam
Original Post: https://www.pbs.org/newshour/nation/how-child-tax-credit-payments-helped-these-families-stay-afloat
For millions of families in the United States, the few hundred dollars a month they received last year through the child tax credit payments was the difference between having enough food to eat or going hungry.
Across six months, the payments helped roughly 61 million children and decreased the number of U.S. kids in poverty by as much as 40 percent, the Center on Budget Policy and Priorities has projected. For some it was a “cushion,” as one mom told the PBS NewsHour. For others, it was a bigger lifeline. Adding up to $93 billion total, these payments illustrated what economic research has shown all along – that giving Americans cash directly — as opposed to food stamps — can get assistance to people who need it more quickly and effectively, the Urban-Brookings Tax Policy Center Senior Fellow Elaine Maag said in March.
It’s a conversation that’s been bubbling among for years. Along with local pilots of similar programs, research has also pointed to other benefits that come from the security of consistent income. A study published in the Proceedings of the National Academies of Sciences on Feb. 1 suggested regularly scheduled payments to low-income mothers may even boost brain development in their young children, a finding that experts found promising, though more testing is needed. The question of what to do about poverty found new resonance and urgency in the midst of a pandemic, which has done caregivers no favors.
“It’s an incredible tragedy to address child poverty and then to let that lapse.”
Nearly two years after the coronavirus brought normal life to a grinding halt, child care in many communities remains elusive, expensive and a source of anxiety over COVID outbreaks, shutdowns and further disruption to life. Parents have felt like they are forced to choose between the safest options for their family or their jobs and financial solvency.
The American Rescue Plan Act of March 2021 secured funds for the monthly child tax payments that began for some households in July, helping many of those parents cope with both ongoing financial struggles and rising costs due to inflation and effects of the pandemic. More than half of middle-income families used the new infusion of cash to buy food, according to the Census Bureau.
Congress failed to extend funding for the credit, and the provision expired in December. Democrats and Republicans have failed to agree on who should qualify for the payments and how much they should be. For Republicans, the lack of work requirements, as some other government programs include, has continued to be a sticking point. Sen. Joe Manchin, D-W.Va., has opposed extending the tax credit through the proposed Build Back Better bill, reportedly saying late last year that he thought families would use the aid to buy drugs instead of helping their kids, according to ABC News, despite a lack of evidence to support his claim.
Families can still receive the second half of their child tax credit payment, but to get it, they must file their tax return in 2022 for the previous year. “The truth is there are people across our nation who work hard every day and still struggle to get by and it should not be this way in our country,” Vice President Kamala Harris said Tuesday at an event to promote the program.
In the meantime, some economists are worried about how the absence of credits may affect the economy. Caregivers, especially women, juggling obligations to their families and their jobs, may be squeezed out of the labor force, potentially slowing economic growth.
“All of these policies help people be able to stay in the labor force. When you don’t have enough funds to pay for child care, you get pushed out,” said Kristin Rowe-Finkbeiner, executive director for MomsRising, a social justice group with more than a million members.
With the future of the program at an impasse, people across the country who benefitted from the payments feel they are back to struggling every month. “That’s the default mode,” said Lilian Kroupa, a mom from Michigan.
“It’s an incredible tragedy to address child poverty and then to let that lapse,” Rowe-Finkbeiner said.
The PBS NewsHour asked parents across the country how the child tax credit payments have shaped their household budgets and what they will do now that the money is gone.
Joy Spencer, 34 – Durham, North Carolina
While receiving monthly child tax credit payments, Joy Spencer no longer had to second-guess whether she could afford to put gas in her car and feed her toddler.
A single mom who once processed gun permits for the local sheriff’s office, Spencer said she left her job as an essential worker when the COVID-19 pandemic shut down her toddler’s daycare, leaving her with no options. For months, she struggled to pay her rent, utilities, gas and food and fell into debt.
“I’m perpetually behind.”
In October 2020, she found her dream job with a local nonprofit that empowers Black people with prenatal care to support them through pregnancy and improve the chances of healthy delivery. But she still had trouble making ends meet: “I’m perpetually behind,” she said.
When a child tax credit payment would clear her account, she didn’t have to worry about grocery money and she began to pay off her debt, including back payments to her child’s daycare. With that extra support expired, Spencer said she doesn’t think the payments will return. “The government has failed us in so many ways,” she said.
Josh Meryman, 45 – Kirkwood, Washington
Since his divorce five years ago, Josh Meryman has struggled to stay afloat financially. He said he is building back his credit, and he pays child support for his two children, ages 11 and 14, for whom he started college savings accounts when they were born.
Then the child tax credit payments arrived last summer, and the positive impact on Meryman’s household budget was “instantaneous,” he said. He began to rebuild his savings and buy what his children needed.
The pandemic has added stress to Meryman’s life. As a mail carrier for the U.S. Postal Service, he and his colleagues endured near-constant fear of getting sick with COVID-19.
But the payments had offered some relief. “That was a big thing – to just be able to count on that,” he said.
Lilian Kroupa, 32 – Buckley, Michigan
Lilian Kroupa’s son nearly died shortly after being born, due to a chronic heart condition. To care for her infant, she quit her job at a local grocery store. Three years have passed, and Kroupa said she is taking no chances with COVID-19. “If he gets COVID, he could die,” her child’s doctor told Kroupa.
“We constantly struggled before the pandemic, so that’s the default mode.”
Neither she or her husband, who is legally blind, work outside the home, and her 10-year-old daughter attends school virtually to prevent any possible COVID exposure from a classroom. For years, Kroupa practiced budgetary gymnastics, trying to stretch disability payments that her husband receives as far as possible to keep the family and her car going so her son could make his medical appointments.
When the child tax payments showed up, “that was a nice cushion that got us through,” Kroupa said. She made long-delayed car repairs on her 2006 Subaru Outback with a rebuilt engine. The money also allowed the family to “have Christmas,” Kroupa said, helping to pay for a handful of Gabby’s Dollhouse figures for her son and art supplies for her daughter. Now, that cushion is gone.
“We constantly struggled before the pandemic, so that’s the default mode,” Kroupa said. “We struggle month to month, and we have no savings.”
Kevin Barthauer, 47 – Noblesville, Indiana
When the COVID-19 pandemic shuttered businesses and people weren’t eating out, it also snuffed out any hope Kevin Barthauer had of resurrecting his 25-year career in the restaurant industry. He decided to change his course and study information technology – a big change for the married father of five kids, ages 7, 11, 15, 17 and 19.
While he went back to school and launched a new life professionally, his family relied on the savings he had set aside for decades, spending more than half of it. He is currently working an entry-level role with the promise of a promotion and good benefits. But the child tax credit payments allowed him to protect the rest of his savings and make his house payments on time. “That made the difference,” he said.
Kathryn Tipton, 40 – Kailua-Kona, Hawaii
As branch manager for her local library, Kathryn Tipton knows people are hungry for information and resources about how to navigate the financial uncertainty brought on by the COVID-19 pandemic. She organizes and shares virtual programs and printed pamphlets with people who call or enter the library, which directly serves a community of 6,500 people where Hawaiian royalty once spent their summers. There, grocery prices have soared and rent for a two-bedroom, two bath condo starts at $3,000 per month, she said.
“We knew we wouldn’t have to worry in between paychecks about how to feed the family.”
For herself, the child tax credit payments gave her cause for optimism and helped stretch their steady income, including her husband’s disability stipend. “We knew we wouldn’t have to worry in between paychecks about how to feed the family,” she said.
But now Tipton herself struggles to figure out how she and her loved ones, including sons aged 11 and 13, can continue to afford to stay in Hawaii.
“We haven’t given up hope,” Tipton said. “We’re just assuming it’s not going to happen.”
Those payments gone, Tipton thinks lawmakers in Washington, D.C., are “not willing to work” with each other.
Chardè Belle, 34 – Stoughton, Massachusetts
In January 2020, Chardè Belle’s household “was in panic mode.” Everyone was sick – her husband worked as a security guard until he developed a strange respiratory illness that required hospital care, what Belle believes was COVID-19.
Less than a year earlier, in 2019, Belle’s struggle with lupus and fibromyalgia had ended her career as a nurse. “It’s not my fault that I became disabled,” she said.
“The world we grew up in doesn’t exist anymore.”
Her husband then ran out of medical leave and lost his job – the family’s sole income. Belle had to make every penny count, and spending got so tight “we couldn’t afford to put money in the friggin piggy bank.” To buy school clothes for her children, ages 4, 9 and 13, Belle said she skipped paying bills except for their rent and phone for a month. Her credit was shredded over debt that hovered around $500.
Then, in July 2021, the child tax credit payments started to come in. “I could live normally, like how I grew up,” Belle said. She enrolled her son in karate classes and her older daughter into band lessons. But now, the payments are gone, and when Belle goes to the store to see what little she can afford, prices have soared well above pre-pandemic costs.
She said her only goal was to make a life for her kids that was better than what she and her husband had when they were children. But it’s not better; in her mind, it’s worse. “The world we grew up in doesn’t exist anymore,” Belle said.
About the Author: Laura Santhanam is the Data Producer for the PBS NewsHour. Follow @LauraSanthanam