Sometimes a policy idea runs into opposition not because it doesn’t work—but because it works entirely too well. Something like this appears to be happening right now with the Child Tax Credit (CTC).
In 2021, the Biden administration’s American Rescue Plan Act gave the CTC a tremendous boost, growing it by $1,600 per child under 6 years old (an 80 percent increase) and $1,000 per older child (a 50 percent increase) for all but the wealthiest American families. It also made the credit fully refundable—that is, families could receive the full value, even if it was greater than their income tax liability for the year. Even better, the Biden administration began sending the annual credit to families as a series of monthly payments, in effect converting it into what’s known as a child allowance. That is, instead of receiving $3,600 (or $3,000, for older children) in tax benefits at the end of the year, families of young children (including the authors’ own) have been receiving as much as $300 per month from the federal government.
These were simple changes, as policy reforms go, but they had a dramatic, immediate impact. They instantaneously lifted millions of children from poverty and appear likely to reduce child poverty by at least 40 percent. Given the decades of research showing that income increases in children’s early years produce better health and academic outcomes, it’s likely that sustaining this investment would contribute directly and indirectly to a wide range of American social improvements. In other words, measured against its goal, the expansion of the child tax credit is one of the great policy successes in recent memory. Few other big federal ideas have so suddenly achieved precisely what they intended.
But congressional budgeting rules meant that the new credit was only in place for one year. For all its success, the new, improved, and more effective CTC has its critics, and some in Washington, D.C. have been consumed with finding ways to undermine its chances of returning. Since Republicans in Congress remain unified in their opposition, the administration needed support from every Democratic senator—including West Virginia’s Joe Manchin, who wanted to tie a work requirement to the expanded support for families.
The desire to add a work requirement has nothing to do with improving the effectiveness of the child tax credit—research suggests that work requirements don’t appear to work particularly well—and everything to do with reverting to a well-worn American domestic policymaking pattern. For several generations, U.S. policymakers have been attaching strings to the nation’s anti-poverty programs. The theory was—is—that making social service programs conditional could reshape poverty by incentivizing different, “better” behavior from low-income families.
The Problems with Making the Child Tax Credit Conditional
There are countless examples of these work requirements. Federal child care subsidies are only available to parents who are working or in school. Food assistance through the Supplemental Nutrition Assistance Program (SNAP) is tied to work, as are a large portion of Temporary Assistance for Needy Families (TANF) welfare funds. Similarly, much of the country’s justice system arbitrarily links poor individuals’ abilities to pay court fines and fees with legal permission to drive a vehicle.
The work requirements for each of these safety net policies is supposed to incent poor individuals to shape up somehow. But instead, this hodgepodge system of providing social services not only raises the stakes of small problems for poor families, but sometimes even hinders their efforts to escape poverty. In this context, a parking ticket isn’t just a frustrating, unexpected expense. It’s a trigger that could—for a family who isn’t able to immediately pay it—set off a series of cascading consequences: the overdue fine grows because of late fees, which eventually cost the family’s primary wage earner her driver’s license. Unable to legally drive, she struggles to reliably get to work on time, and loses her job. Without proof of employment, she loses the subsidies that provide her with child care, as well as public food support. These combined pressures drain her family’s limited savings, which, in turn, spark new financial headwinds in the form of low balance and overdraft fees from their bank. Now, imagine any other standard, quotidian emergency cost of raising children arises—a broken arm, a lost jacket, a broken appliance.
What further bootstrapping should she try in order to earn affordable child care or adequate nutrition for her children? What thrifty secret to upward mobility has she failed to unlock?
This system—denying basic needs and dignity to poor families unable to meet various behavioral conditions—isn’t just ineffective public policy. It also does real damage to American children experiencing poverty. Children’s socioeconomic status is a predictor of their present and future academic success at school and of their health—both in childhood and into adulthood. It is a predictor of whether they will live in poverty as adults. Keeping these children in poverty through intentional policy choices is condemning them—and very probably their children—to stay in poverty.
American Child Poverty: Race and Class
It is impossible to delink American conversations about poverty and upward mobility from racism. Poverty weighs down about 11.6 million American children—almost one in six. Nearly three quarters of children experiencing poverty are children of color. More than one in four Black children and one in five Latinx and Indigenous children are experiencing poverty, compared to one in twelve white children. Not coincidentally, this approach has its roots in racist and classist structures as old as our nation, and has been perpetuated, on purpose, through policy, in the years since. Black Americans and other Americans of color were systematically excluded from wealth building, job opportunities, and quality education.
The resulting disparities we see today are tied to those historical exclusions and amplified by the continuous marginalization of people of color. Today, research finds that a Black child born to high-income parents is about as likely to fall to the bottom of the income scale as she or he is to remain at the top. A white child in a similarly high-income family, on the other hand, is about five times more likely to stay on top than fall to bottom income levels. Black and Latinx two-parent households have half the wealth of white one-parent households. The truth remains that poverty is and always has been intertwined with racism in the United States, and programs and policies to remedy poverty have been designed and implemented with racial bias and perhaps more creative, less explicit systematic attempts at exclusion.
Furthermore, what legislators pushing for work requirements ignore—perhaps willfully—is that joblessness is often the result of labor market forces well beyond a worker’s control. If the past two years of pandemic have taught us anything, it is that unexpected, massive shifts in employment can and do occur, and these often produce periods of extended joblessness for certain U.S. workers. Withholding food or child care from a struggling, jobless family in these moments doesn’t help, it hurts.
Is it any wonder that, despite all the nudges and threats written into safety net policies to keep workers working, U.S. poverty—particularly child poverty—persists at egregiously high rates?
Addressing Child Poverty Directly
It’s almost as if poverty isn’t, at base, an individual choice. Families experiencing poverty are not doing so because they are somehow paralyzed in their struggles, waiting to be jolted into action by policies threatening to make poverty even more uncomfortable. Millions of poor families already work incessantly—at low-wage jobs that leave them still in dire need of public assistance, at caring for their children in a country where child care is prohibitively expensive, or both—and still find that they cannot cobble together sufficient resources to reach minimal levels of financial security and the accumulating benefits that come with it. The United States has collectively, knowingly, chosen a wide array of policies that wind up keeping millions of children in poverty.
That’s why, even when the nation has made real progress on various social indicators, it hasn’t meaningfully ameliorated the unequal struggles that poor families face. High school graduation rates are up—including for low-income students. Educational attainment is up. Teen pregnancy is down. Despite the pandemic’s challenges, unemployment is relatively low.
And yet, these sorts of social improvements aren’t solving the problem.
What’s more, children sit wholly outside of the strategic equation behind work requirements. Whatever some policymakers may think about the choices, behaviors, and motivations of parents, no child is morally responsible for earning their right to nutrition or housing or educational opportunities. There is no honest moral case for policymakers to force a child to suffer destitution simply to teach their parents and caregivers a lesson about work.
The Biden administration’s changes to the Child Tax Credit bypassed this contorted view of American poverty by trusting that poor families would use the additional money to help their children. Lo and behold, early data bear this out: over 90 percent of families are using their child tax credits for essentials: food, utilities, rent/mortgage, clothing, and educational costs. They didn’t need strict guidance or heavy-handed federal pressure. They just needed resources.
Nonetheless, the Child Tax Credit’s future remains uncertain. The details on how (and for how long) it will be renewed have not yet been finalized.
One thing’s clear: if the policy goal is to reduce child poverty, policymakers should focus on child poverty. Anything else, particularly ineffective distractions such as work requirements, are simply a misuse of children as bargaining chips to score political points and to reinforce misguided, paternalistic characterizations of families living in poverty.
header photo: Hand drawn signs to celebrate new monthly Child Tax Credit payments and urge congress to make them permanent outside Senator Schumer’s home in Brooklyn, New York. Source: Bryan Bedder/Getty Images for ParentsTogether
Tags: american rescue plan, child tax credit
Keeping the Child Tax Credit Unconditional—Because Children Don’t Choose to Be Poor
Sometimes a policy idea runs into opposition not because it doesn’t work—but because it works entirely too well. Something like this appears to be happening right now with the Child Tax Credit (CTC).
In 2021, the Biden administration’s American Rescue Plan Act gave the CTC a tremendous boost, growing it by $1,600 per child under 6 years old (an 80 percent increase) and $1,000 per older child (a 50 percent increase) for all but the wealthiest American families. It also made the credit fully refundable—that is, families could receive the full value, even if it was greater than their income tax liability for the year. Even better, the Biden administration began sending the annual credit to families as a series of monthly payments, in effect converting it into what’s known as a child allowance. That is, instead of receiving $3,600 (or $3,000, for older children) in tax benefits at the end of the year, families of young children (including the authors’ own) have been receiving as much as $300 per month from the federal government.
These were simple changes, as policy reforms go, but they had a dramatic, immediate impact. They instantaneously lifted millions of children from poverty and appear likely to reduce child poverty by at least 40 percent. Given the decades of research showing that income increases in children’s early years produce better health and academic outcomes, it’s likely that sustaining this investment would contribute directly and indirectly to a wide range of American social improvements. In other words, measured against its goal, the expansion of the child tax credit is one of the great policy successes in recent memory. Few other big federal ideas have so suddenly achieved precisely what they intended.
But congressional budgeting rules meant that the new credit was only in place for one year. For all its success, the new, improved, and more effective CTC has its critics, and some in Washington, D.C. have been consumed with finding ways to undermine its chances of returning. Since Republicans in Congress remain unified in their opposition, the administration needed support from every Democratic senator—including West Virginia’s Joe Manchin, who wanted to tie a work requirement to the expanded support for families.
The desire to add a work requirement has nothing to do with improving the effectiveness of the child tax credit—research suggests that work requirements don’t appear to work particularly well—and everything to do with reverting to a well-worn American domestic policymaking pattern. For several generations, U.S. policymakers have been attaching strings to the nation’s anti-poverty programs. The theory was—is—that making social service programs conditional could reshape poverty by incentivizing different, “better” behavior from low-income families.
The Problems with Making the Child Tax Credit Conditional
There are countless examples of these work requirements. Federal child care subsidies are only available to parents who are working or in school. Food assistance through the Supplemental Nutrition Assistance Program (SNAP) is tied to work, as are a large portion of Temporary Assistance for Needy Families (TANF) welfare funds. Similarly, much of the country’s justice system arbitrarily links poor individuals’ abilities to pay court fines and fees with legal permission to drive a vehicle.
The work requirements for each of these safety net policies is supposed to incent poor individuals to shape up somehow. But instead, this hodgepodge system of providing social services not only raises the stakes of small problems for poor families, but sometimes even hinders their efforts to escape poverty. In this context, a parking ticket isn’t just a frustrating, unexpected expense. It’s a trigger that could—for a family who isn’t able to immediately pay it—set off a series of cascading consequences: the overdue fine grows because of late fees, which eventually cost the family’s primary wage earner her driver’s license. Unable to legally drive, she struggles to reliably get to work on time, and loses her job. Without proof of employment, she loses the subsidies that provide her with child care, as well as public food support. These combined pressures drain her family’s limited savings, which, in turn, spark new financial headwinds in the form of low balance and overdraft fees from their bank. Now, imagine any other standard, quotidian emergency cost of raising children arises—a broken arm, a lost jacket, a broken appliance.
What further bootstrapping should she try in order to earn affordable child care or adequate nutrition for her children? What thrifty secret to upward mobility has she failed to unlock?
This system—denying basic needs and dignity to poor families unable to meet various behavioral conditions—isn’t just ineffective public policy. It also does real damage to American children experiencing poverty. Children’s socioeconomic status is a predictor of their present and future academic success at school and of their health—both in childhood and into adulthood. It is a predictor of whether they will live in poverty as adults. Keeping these children in poverty through intentional policy choices is condemning them—and very probably their children—to stay in poverty.
American Child Poverty: Race and Class
It is impossible to delink American conversations about poverty and upward mobility from racism. Poverty weighs down about 11.6 million American children—almost one in six. Nearly three quarters of children experiencing poverty are children of color. More than one in four Black children and one in five Latinx and Indigenous children are experiencing poverty, compared to one in twelve white children. Not coincidentally, this approach has its roots in racist and classist structures as old as our nation, and has been perpetuated, on purpose, through policy, in the years since. Black Americans and other Americans of color were systematically excluded from wealth building, job opportunities, and quality education.
The resulting disparities we see today are tied to those historical exclusions and amplified by the continuous marginalization of people of color. Today, research finds that a Black child born to high-income parents is about as likely to fall to the bottom of the income scale as she or he is to remain at the top. A white child in a similarly high-income family, on the other hand, is about five times more likely to stay on top than fall to bottom income levels. Black and Latinx two-parent households have half the wealth of white one-parent households. The truth remains that poverty is and always has been intertwined with racism in the United States, and programs and policies to remedy poverty have been designed and implemented with racial bias and perhaps more creative, less explicit systematic attempts at exclusion.
Furthermore, what legislators pushing for work requirements ignore—perhaps willfully—is that joblessness is often the result of labor market forces well beyond a worker’s control. If the past two years of pandemic have taught us anything, it is that unexpected, massive shifts in employment can and do occur, and these often produce periods of extended joblessness for certain U.S. workers. Withholding food or child care from a struggling, jobless family in these moments doesn’t help, it hurts.
Is it any wonder that, despite all the nudges and threats written into safety net policies to keep workers working, U.S. poverty—particularly child poverty—persists at egregiously high rates?
Addressing Child Poverty Directly
It’s almost as if poverty isn’t, at base, an individual choice. Families experiencing poverty are not doing so because they are somehow paralyzed in their struggles, waiting to be jolted into action by policies threatening to make poverty even more uncomfortable. Millions of poor families already work incessantly—at low-wage jobs that leave them still in dire need of public assistance, at caring for their children in a country where child care is prohibitively expensive, or both—and still find that they cannot cobble together sufficient resources to reach minimal levels of financial security and the accumulating benefits that come with it. The United States has collectively, knowingly, chosen a wide array of policies that wind up keeping millions of children in poverty.
That’s why, even when the nation has made real progress on various social indicators, it hasn’t meaningfully ameliorated the unequal struggles that poor families face. High school graduation rates are up—including for low-income students. Educational attainment is up. Teen pregnancy is down. Despite the pandemic’s challenges, unemployment is relatively low.
And yet, these sorts of social improvements aren’t solving the problem.
What’s more, children sit wholly outside of the strategic equation behind work requirements. Whatever some policymakers may think about the choices, behaviors, and motivations of parents, no child is morally responsible for earning their right to nutrition or housing or educational opportunities. There is no honest moral case for policymakers to force a child to suffer destitution simply to teach their parents and caregivers a lesson about work.
The Biden administration’s changes to the Child Tax Credit bypassed this contorted view of American poverty by trusting that poor families would use the additional money to help their children. Lo and behold, early data bear this out: over 90 percent of families are using their child tax credits for essentials: food, utilities, rent/mortgage, clothing, and educational costs. They didn’t need strict guidance or heavy-handed federal pressure. They just needed resources.
Nonetheless, the Child Tax Credit’s future remains uncertain. The details on how (and for how long) it will be renewed have not yet been finalized.
One thing’s clear: if the policy goal is to reduce child poverty, policymakers should focus on child poverty. Anything else, particularly ineffective distractions such as work requirements, are simply a misuse of children as bargaining chips to score political points and to reinforce misguided, paternalistic characterizations of families living in poverty.
header photo: Hand drawn signs to celebrate new monthly Child Tax Credit payments and urge congress to make them permanent outside Senator Schumer’s home in Brooklyn, New York. Source: Bryan Bedder/Getty Images for ParentsTogether
Tags: american rescue plan, child tax credit