Increasing Rates of Child Poverty After the Tax Credit Expire

It just took one month without the increased child tax credit payments for the number of American children living in poverty to increase drastically.

Columbia University’s Center on Poverty and Social Policy estimates that 3.7 million additional children were living in poverty by January – a 41 percent rise from December, when families received their final check. There have been two missing bank deposits so far this year, with payments of up to $300 per kid being delivered on the 15th of every month.

The monthly child poverty rate climbed from 12.1 percent in December to 17 percent in January, according to a Columbia University research. There hasn’t been a reading this high since December 2020, when the United States was struggling with high unemployment and the revival of COVID-19. A 5.9% and a 7.1% increase in poverty rate was seen among children of colour and Hispanic/Latino families.

One expert, Megan Curran  noted that :-

This dramatic increase demonstrates just how quickly the payments have become essential to the financial security of millions of households after only six months.

It had an immediate impact, Curran said. “We observed food insecurity diminish virtually quickly as soon as the payments started… all of the progress that we accomplished might now be undone.”

There may be a correlation between growing costs and a rising number of children living in poverty, according to Curran

An ambitious aim of the child tax credit was to reduce child poverty in America by half, but the new data show that this has not been achieved. Biden’s $1.9 trillion COVID-19 bailout package last year altered the current child tax credit programme, increasing payments, broadening the pool of eligible families and sending the money in monthly instalments aimed to be integrated into day-to-day households budgets.

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Most families in the country received payments of $250-per-month for children aged 6 to 17 and $300-per-month for kids under the age of 6, at an annual cost of roughly $120 billion.

Democrats had a plan to keep the tax credit in place while they fought over its future in the months to come, armed with facts and anecdotes about its advantages.

Instead, Joe Manchin, a West Virginia Democrat, held out for weeks before eventually declining to support Joe Biden’s social spending bill in the Senate. One of the reasons Manchin had for his worries about the package was its high cost for the child tax credit.

Since then, discussions on Biden’s Build Back Better legislation have been labelled “dead,” according to Manchin.

According to Democratic New Mexico Sen. Martin Heinrich, one of the greatest champions for the enhanced child tax credit, letting it expire would be “a moral disaster” for the state’s virtually all of its children.

“These very painful choices” were meant to prevent parents from having to make them, said Allison Johnson, campaign director for the group.

Johnson noted that the elimination of the deposits makes it practically difficult for poor families, who may be struggling to pay down debt or cope with large costs, to build financial stability or momentum.

“People have a hard time with this lack of clarity. ” People can’t plan ahead because of the disorder”, she added.