Working Families Face Financial Insecurity
Since July 2021, working families have found relief from the pandemic’s impact with monthly Child Tax Credit (CTC) payments of $250 or $300 per child from the American Rescue Plan. Now families face severe hardship as Congress fails to extend the benefit as of January 2022, just as the surge in Omicron infections threatens to keep people at home with a new round of furloughs.
Without this social safety net warned experts at a Jan 7 EMS briefing, rising cases and expiring aid will impact the financial security for millions of families close to the poverty line.
“Over 60 million children and more than 36 million households nationwide,” have benefitted from the regular support of CTC, explained Michelle Dalfour, Senior Vice President of Budget and Tax at First Focus on Children. “Financial insecurity will grow for the tens of millions of households with children.”
As families lose income support, “the value of the monthly payments cannot be overstated,” she added. Congress’ failure to extend CTC will harm those most in need and disproportionately hurt families with children.
Child Tax Credit Expires
The Child Tax Credit (CTC) launched by the Biden administration last year to help families with children during the pandemic, reached 61.2 million children in December 2021. In November 2021, CTC kept nearly 4 million children out of poverty.
CTC cut poverty for children of every racial and ethnic background and reduced the child poverty rate by 30%, said Claire Zippel, Senior Research Analyst at the Center on Budget & Policy. It’s estimated to reduce child poverty by 40 to 45% – more than 50% for black children, more than 45% for Latino children, and more than 60% for Native American children.
According to Zippel, 91% of families with incomes below $35,000 spent all their child tax credit on basic necessities such as food, housing, clothing, utilities, education, and other basic needs.
But Congress let CTC expire instead of extending the $105 billion program, when the 1.7 trillion dollar Build Back Better legislation (to which it is tied), stalled in Congress. Monthly CTC payments ceased after Jan 15.
The Harsh Reality of Hunger in the Land of Plenty
The pandemic increased food insecurity among working families in communities of color. More than 38 million people including 12 million children in the United States are food insecure, said Loree Jones, CEO of PhilAbundance, a hunger relief project in Philadelphia, the poorest large US city. “In Philadelphia that means 1 in 5 people go to bed hungry.”
Jones saw 60% more people accessing the charitable food network in 2020 and 2021. “ The lines got longer.”
She said 84% of households in the PhilAbundance network bought the cheapest food available, rather than the healthiest food, to provide enough to eat. One single mother shared that she was making choices between buying milk or paying for electricity during the pandemic.
PhilAbundance delivered healthy meals to out-of-work food workers and provided 70 thousand culturally responsive meals to Afghan evacuees in the community. It supported children with free produce markets at schools, food ingredients for families, and distributed over 240 thousand free, healthy meal kits.
Children who are hungry at an early age experience developmental impairments, said Jones. “Their brains do not develop properly, leading to lack of language and motor skills,” which slow their progress at school and has long-term social and behavioral consequences.
Children Get Left Behind
Unless Congress passes Build Back Better legislation, children will be denied the benefit of CTC. That means “nearly 27 million children would lose access to the full credit,” said Zippel, and families would lose significant amounts of money for everyday essentials. “Many children would see their credit taken away entirely and millions more would have their credit cut.”
The child tax credit would revert to providing the least help to the children who need it most. Access to full credit will be denied to lower-earning households and disproportionately impact black and brown families.
Without CTC poverty would spike, warned Dalfour, and keep the benefit from nearly one million children who don’t have social security numbers.
“Too often support for children is viewed as something that can be cut when legislative negotiations get underway,” she remarked.
Congress needs to urgently pass the BuildBack Better Act, and reinstate funding for the life-changing CTC programs, added Dalfour, or “we would be basically abandoning our children in a time of continued public health and economic uncertainty.”
A Pivotal Moment For Our Nation’s Children
With Build Back Better, families would receive the child tax credit as a regular (not a partial) monthly payment, and the balance when they file taxes. It would also permanently extend Full Refundability which ensures that children, even those whose parents have low or no income, get the full credit.
Jones agreed that ongoing support like the child tax credit and increases to SNAP are more sustainable winning strategies. “I remain optimistic because for the first time in a long time because things are so hard, we do have the will to get this done for our kids.”
“I would say that the moment is now, that our Congressional Champions feel the same way,” said Dalfour.
“Kids cannot be left behind.”
Meera Kymal is the Contributing Editor at India Currents and a 2021 grantee from the USC Center for Health Journalism, reporting on domestic violence in the South Asian community.