Data confirm that the Child Tax Credit is more effective anti-poverty legislation than many of its policy peers yet it has lapsed. What’s next?
By: Connor Murphy.
Leesburg mother Nicole Lee recently wrote to the Times-Mirror, explaining the importance of the Child Tax Credit to her family. For her, this meant added support for her son, Seamus, who lives with high-functioning autism. Amid rising costs at the gas pump and grocery store, the CTC enabled her family to support him with social skills classes and therapy.
All of that support for Nicole and millions of parents nationwide is at risk today, as monthly payments have ceased. Congress has a complex and challenging year ahead, with tenuous circumstances abroad, hearings on a Supreme Court nominee ahead, and midterm elections around the corner. It would be easy for them to let extending the Child Tax Credit slip from the list of priorities to act on in 2022. But, it would be a mistake.
I’m 25 years old. I was born and raised in Loudoun County. I don’t have children, but I know this policy is an opportunity we cannot afford to miss. Here’s why:
Data confirm that the Child Tax Credit is more effective anti-poverty legislation than many of its policy peers. A recent story by Pro-Publica observed that policies like TANF, which involve a labyrinth of red tape to not only qualify for, but receive, was significantly less effective policy for supporting families due to the limited access provided to families. $5.2 billion funding for TANF is going entirely unused, instead of performing its appropriated intent.
In contrast, six monthly payments of the Child Tax Credit avoided red tape and lifted nearly 4 million children from poverty in doing so, according to Columbia University. Another 6 million were lifted from deep poverty. In the first monthly payment alone, the U.S. Census Bureau tracked a 24% reduction in food insufficiency among recipient households.
I wouldn’t be surprised if you had to read that again to understand the gravity of this policy. One in four households with children in America were no longer hungry after one direct payment from the Child Tax Credit. That is staggeringly effective public policy at work.
Children who are fed, clothed and given shelter have brighter futures ahead of them. They’re able to learn more, lead healthier lives and grow into adults who strengthen our communities.
We also know that CTC has neutral workforce participation effects or better for parents. According to a recent analysis of Census Pulse Survey data, Washington University in St. Louis’ Social Policy Institute found that there is no evidence “that CTC payments are leading to people leaving the workforce.”
Financially secure adults are also more likely to start businesses and employ others in their communities. Further research from the Social Policy Institute found that an additional 3% of households earning under $50,000 each year, or an estimated 300,000 households, were encouraged by the Child Tax Credit to start their own small businesses.
Finally, and perhaps most importantly to skeptics of the policy, analyses of CTC determine that it is extremely cost effective. As it turns out, sending direct cash to American families produces some of the best returns on investment for taxpayer dollars spent on social programs. For every dollar spent directly on reducing child poverty, Congress saves eight dollars in crime reduction, healthcare costs, and other costs associated with children who grow up without being able to escape poverty.
I may not benefit from the CTC directly, but I will be better off because I’m living in an interconnected world that thrives when others prosper.
Some day, I will be a father in this community where I grew up. Our representatives will have another little person or two to think about in Washington. I would urge them to not let perfect be the enemy of the good, and find a way to reach a compromise with their peers on this policy. If efforts to extend the Child Tax Credit succeed, I’ll be glad to know that the future of all children – mine included – will be brighter.