No major rich democracy nation has been more hesitant to provide unconditional cash allowances to families with children experiencing poverty than the United States. Almost all major democracies have provided a version of such allowances for decades. But U.S. ideology strongly resists giving all Americans poverty relief, and this has included children. A result is that by key measures, America has the highest child poverty rate among rich democracies.

America has focused instead on defining who the “undeserving poor” are—usually based on measures of insufficient formal work and earnings history—and has refused them benefits. The underlying myth is that most of the people defined as such are lazy and avoid work, a stereotype that is deeply intertwined with racialized views held by many Americans. Millions of children, including Black, Latinx, and indigenous children, fall into this category of the “undeserving poor” because their parents are in poverty or near-poverty. That these children are held hostage to such an ugly American legacy is a matter of national and even international shame.

The establishment of President Biden’s new child tax credit (CTC)1 —a maximum of $3,000 to $3,600 a year per child, which goes to all households with children and is fully refundable—has broken this long-standing American resistance. As many Democratic policymakers have said, the arrival of this credit is a momentous occasion, even though it is only for one year. This historical shift was a long time in the making; it did not happen overnight. The new child tax credit, which has existed in considerably less generous form since 1996, is now fully refundable for the first time in American history. If parents do not earn enough to make full use of the tax credit, or don’t earn anything at all, they will be provided cash to make up the difference. Previously, some 27 million children received only a partial tax credit or no credit at all because their family’s income was too low. Under the CTC before the Biden plan, one third of children got only a partial credit and or none at all. Under the new plan, to repeat, every family gets the full credit until parents are comfortably well off. The establishment of President Biden’s new child tax credit means children experiencing the worst poverty won’t be left out.

The recent passage of the expanded CTC represents a major shift in attitudes toward social policy.

The Biden CTC boosts the credit to $3,000 for all children ages 7 to 17 and $3,600 for children age 6 or under. It had been $2,000. Because all children are eligible for the credit, the new CTC is thus like an outright cash allowance with no conditions, similar to the programs in a dozen and a half other rich democracies. It gradually phases out when annual family income reaches $150,000. The first payments, delivered on July 15, reduced hunger sharply, with the number of adults living with children reporting not having enough to eat dropping by 3.3 million, or roughly by one third.2 The proportional improvement was greater still for Black and Latinx families. And not all qualified have yet signed up for the refunds.

The recent passage of the expanded CTC represents a major shift in attitudes toward social policy. Given America’s historical resistance, however, it cannot be take for granted that the battle for full refundability has been won. Biden’s CTC is set to expire after only one year. Making the CTC permanent and easily available are the next urgent steps to complete the transformation. An extension of the Biden CTC until 2025 is part of the Build It Back Better budget reconciliation, which will be decided on perhaps as early as this month, in mid-October.

This report outlines succinctly how the new CTC was achieved over time, beginning nearly eighty years ago with the United Kingdom’s Beveridge Report, which popularized the idea of family allowances in other major democracies and at the same time underscored America’s culture of resistance toward helping families experiencing poverty. It then further highlights the racial prejudice present in the policies and practices of the U.S. welfare system and reviews academic research regarding child poverty and cash allowances. It concludes with a brief legislative history, including a look at the Build It Back Better plan, which could potentially extend Biden’s CTC for several years and make its refundability permanent.

The Beveridge Report

In the Depression and through World War II, major large democracies became concerned with the equity and usefulness of their government’s social policies. In fact, due to the economic damage of the Depression and the cost of the war, concern for equitable social programs rose in large democracies. British public opinion enthusiastically supported a new welfare policy in part due to the war. The high taxation brought a greater degree of income equality with social classes mixed together during evacuations. As one study of the period put it, “All social classes had had to share the same air raid shelters. . . . And the patriotic fervour of the war to which all contributed had created a new sense of ‘equality of sacrifice’ and ‘fair shares’ for all citizens.”3

This increased support for welfare led the way to a research report by a British government service officer, William Beveridge, soon to be renowned. There were several major proposals in the 1942 Beveridge Report, including provisions for universal health care and retirement security. But perhaps the standout was a proposal for a universal family allowance to maintain subsistence for all. These included the above-noted allowance for children as well.

The Beveridge Report was highly popular in Britain4 (selling 500,000 copies) and across Europe. The report’s recommendations for a new and comprehensive approach to individual security in Britain had an international impact. The report inspired Canada’s Leonard Marsh’s Report on Social Security for Canada (1943), which called for family allowances, putting it on Canada’s policy agenda. This was one of the main reasons Canada has a child benefit today.5

The Beveridge Report was also notably influential in America. Demand for a broader safety net was inevitable due to among other things, the soaring unemployment rates of the 1930s and the lack of any uniformly adequately generous retirement security. Americans bought some 50,000 copies of the Beveridge Report, suggesting the same concerns motivated Americans as the British.

But a federal report recommending expanded social programs in America under FDR, made public after the release of the Beveridge Report, notably did not include a family allowance for all. Unlike the Beveridge Report, the U.S. report particularly did not advocate a child allowance. Beveridge eventually called this the most important of its omissions.

The cost of programs was always a sticking point for the U.S. conservatives, as well as conservatives in Europe. Winston Churchill was at first opposed, and then gave in, notably skeptical. John Maynard Keynes, on the other hand, was an enthusiastic supporter and insisted that, with some moderate changes, it was affordable.

FDR’s proposals at the heart of the New Deal established the U.S. welfare system as we know it, including unemployment and old-age insurance. But children experiencing poverty were only dealt with directly under traditional welfare for single mothers based on their income. The impact of the Beveridge Report presented an opportunity for the United States to adopt the idea of child allowances and the logic of income supplementation for families. This divergence compared to countries such as Canada was one of the main reasons the fight for child allowances has persisted in discussions of U.S. tax policy.

American Postwar Family Policies

Many of the large democracies established family income policies in the 1940s, which America refused to do. These family income policies included cash allowances for children, something American policymakers decided against creating. Why the status and living conditions of children were subordinated to the concerns of the anti-poor streak in American politics is an astonishing example of American insensitivity and irresponsibility.

The strong American political legacy opposed the sort of universal benefits available in Europe and Canada for many social programs. While these nations adopted family allowances, including for children, in the 1940s, American policies favored targeting populations for receiving benefits based on work requirements and parental earnings. The framework for child allowances has therefore typically been tax credits, which benefit taxpayers, rather than cash benefits for all. “Lacking a history of family allowances, U.S. policymakers instead relied on the legacy of tax exemptions, which institutionalized a logic of tax relief for taxpayers,” write Joshua T. McCabe and Elizabeth Popp Berman.6 ”Refundable child tax credits were quickly stigmatized as ’welfare’ and the entire debate shifted to conflicts over who exactly counted as a taxpayer worthy of a nonrefundable CTC.”

Overcoming the idea that some children are undeserving of assistance with the Biden CTC, which does not restrict based on family income, is a serious achievement—one that must be made permanent if it is to have any enduring benefit to the American people and economy.

The Success of Social Security

The United States has usually been thought by scholars to be the least “socialist” of the great western democracies. Socialism in this context is a confusing term. It is not in this case about the public ownership of business. Rather, what informally characterizes these “socialist” policies is that they are typically highly inclusive and egalitarian. Other major democracies also often have political parties dedicated explicitly to some form of this sort of socialism. By contrast, in the United States, social policies, if they exist, as noted, have been typically targeted and exclusive, dependent on earnings, work history, and marriage.

The widespread success of and broad participation in Social Security is often cited as a challenge to claims of American opposition to social welfare policies, including against the CTC. Social Security was an enormous success over time, becoming the nation’s largest social policy dedicated to the welfare of Americans as it expanded to more and more workers. But following the hypotheses of political scientist Charles Lockhart, the expansion and broad support for Social Security in the United States since its inception in the 1930s can be seen as the exception that proves the rule.7 Social Security maintained a decidedly American relationship in distributing benefits mostly based on the paid work done by recipients over their lifetimes, decidedly not to the “undeserving poor.” The amount paid to an individual is determined by how much that person has earned and how many years that person has worked. In 1936, the Social Security program covered roughly 55 percent of working people. As it expanded, usually with broad political support, to cover wives and children, domestic workers, agricultural workers, government workers, and so on, its coverage rose to 90 percent. When it started, the exclusion of agricultural and domestic workers effectively limited participation of Black and Latinx workers. Now, they are broadly if inadequately covered. Some supplements to income have also been added to the Social Security program over time.

Lockhart argues that the program’s success has depended not on a socialist-like exception, but on abiding by America’s individualistic legacies. America’s long dedication to individualism—that everyone is responsible for themself—stands in contrast to another strand of ideology more common in other democracies: egalitarianism. When in 1939 benefits were extended to spouses and children of retired workers and to survivors of workers who died prematurely, the change, Lockhart writes, “transformed Social Security from a retirement program for workers into a family-based economic security program.”8

Still, Social Security benefits remained based on earnings and duration of work, not simply on need. Lockhart writes, “social security operates from principles of distributive justice more compatible with individualism than those traditionally associated with efforts at public social provision. In contrast to programs that are primarily need-based, eligibility for social security pensions rests on effort expended as a member of the paid labor force.”9 The new CTC breaks with this tradition, by serving nearly all working families, even if they have no income.

The Battle against Welfare

A major reason for the limitations to poverty policies in America has undeniably been racism itself. Racial prejudice has been a major component of resistance to inclusive poverty policy. Indeed, nonrefundable credits—the American child poverty policy since the mid-1990s—has harmed Americans of color significantly more than white Americans.

Bias against Black women limited American anti-poverty policies since the early 1900s and earlier in the years of slavery. As the Center for Budget and Policy Priorities put it, “labeling Black people as biologically inferior to white people and inherently lazy, promiscuous, irrational, and resilient to pain, white enslavers employed forced reproduction and labor to exploit, control, and punish enslaved Black women while maximizing their economic returns.”10 These policies had continued ramifications for black families.

Nonrefundable credits—the American child poverty policy since the mid-1990s—has harmed Americans of color significantly more than white Americans.

Even the FDR welfare policy, called Aid to Dependent Children (ADC),11 was skewed against Black mothers (as was Social Security initially). As ADC expanded under Lyndon B. Johnson (then renamed Aid to Families with Dependent Children, or AFDC), more Black mothers became eligible for aid. In addition, a public campaign to sign up Black mothers expanded the welfare rolls significantly.

The political backlash was easy to ignite. Ronald Reagan was a principal instigator, with frequent racial dog whistling in the 1970s12 and as president in the 1980s. He was supported by scholars and writers, notably George Gilder who wrote the 1981 bestseller Wealth and Poverty in support of Reagan’s nonintellectual supply-side economics and claims that welfare caused dependency: people didn’t bother to work because they received government money. A second very influential writer of influence was Charles Murray, who argued that black habits, laziness, and inferior intelligence were the core problems.13

Although the percentage of the U.S. budget spent on welfare did not exceed 2 percent of GDP, many Americans under the influence of these men came to believe that it was a main cause of America’s economic and social problems. In sum, to them, welfare caused the need for more welfare, by promoting dependency, and because benefits were tied to the number of children a mother had, they argued it also led to unwanted births and higher costs.

With the welfare program growing and more Black people participating, backlash was again rooted in historic individualism and racial prejudice regarding Black mothers. Republican Congressional victories put pressure on Bill Clinton, who, riding the anti-welfare myths, had promised in his campaign to “end welfare as we know it.”14 Clinton’s compromise ultimately failed. The new welfare program, Temporary Assistance for Needy Families (TANF), was signed by Clinton in 1996 and centered on work requirements. No longer were mothers experiencing poverty entitled to cash benefits, they had to work. But Clinton did not create jobs programs to help them find decent jobs. There was also a time limit for how long families could participate in the program.

Until about 2000, it looked like the new welfare bill was working. But the context was the Clinton boom of rapid growth and falling unemployment rates. Wages for almost all levels were rising. Thus, the newly mandated mothers could get decent jobs. This soon changed. After a serious recession, the job market grew slowly under George W. Bush. In time, women experiencing poverty didn’t even bother to sign up for TANF because stated payments were so low and job seeking requirements were onerous as jobs became difficult to find. Women went back to their old low-paying jobs. The key statistic of TANF’s failures was that 68 families with children out of 100 experiencing poverty received welfare benefits in 1968 but only 23 did in 2019. In fourteen states, only 10 out of 100 families experiencing poverty received TANF benefits. Children experiencing extreme poverty were the most neglected. As the Center for Budget and Policy Priorities wrote, Black children had the greatest likelihood of living in states with the lowest benefits and with programs that reach the fewest families in need.15

The difficulties of implementing welfare policy and the issues with TANF highlights the issues with attempts to protect American children through traditional government programs. Had TANF actually worked, by creating decent jobs for women formerly on AFDC, it is possible the Biden child tax credit would not have passed in America. As it became more widely clear that it was failing, many were agreeing that something different was necessary to protect children experiencing poverty, even if it was in the form of tax policy. The proportion of children who live in families which earn half or less of the poverty line rose rapidly, called deep poverty.

A Challenge to the Concept of “Undeserving Poor”

For decades in America, opponents of universal anti-poverty programs had the upper hand, stalling any adequate progress on addressing child poverty. This began to change in the early 1990s, as international institutions, policymakers, and a fast-growing body of academic researchers focused more attention on child poverty. UNICEF made reducing this rate worldwide a primary goal, in part by expanding the measurement of child poverty across large economies, making cross-country comparisons available.16 As it turned out, America by key traditional measures had the highest child poverty rates among large advanced democracies.

As it turned out, America by key traditional measures had the highest child poverty rates among large advanced democracies.

It is a stunning reflection of America’s historical ideology that high child poverty was so insensitively neglected, which also helps explain why it took so long to pass something like the Biden CTC. Two conflicting analyses were at work by the 1990s.

One was the strong reassertion of the “undeserving poor” thesis, which Americans took to mean that social benefits should be restricted from those who didn’t work adequately, including their children. In sum, under this belief, poverty was caused by the people experiencing poverty themselves, who created a culture of need and futility, and social policies only made matters worse. This reenergized view was flogged shamelessly by Ronald Reagan, who subscribed to the lazy and cheating worker themes, the welfare queen, the quintessential exaggeration.

The second, more respectable argument was that structural concerns prevented many people, and notably people of color, from getting adequate-paying permanent jobs. Their children paid a high price for this, as they were needlessly forced to grow up experiencing poverty. Research in the 1980s led by William Julius Wilson of Chicago University and later Harvard, put substantial meat on claims that jobs were inadequate, and that the habits of Black people were not to blame for low income.17

Academic Research

Although interest in child poverty in rich democracies started to gather strength in the early 1940s, universal anti-poverty policies had been repressed in America since then.

In contrast to right-wing claims that welfare is counterproductive, partly because it supports the undeserving poor, a range of academics in the 1990s began to focus concern on the plight of children themselves, not so much on the motivations of parents. Indeed, the anti-welfare groups and the Clinton welfare reform, concerned with the costs of welfare, created even more hardship for children. The array of new academic findings strongly demonstrated over time the cognitive, emotional, and health benefits of raising children out of poverty, especially early in their lives. The academics focused America’s attention on where it belonged—on the pain of poverty for children.

There were three major areas in which research countered unsupported claims. First, research shows that benefits such as unemployment insurance and payments to single mothers did not significantly disincentivize the motivation to work. Second, and perhaps most surprising to some people, research also shows that payments to mothers did not encourage them significantly to have more children to increase their benefits.

But most importantly, research overwhelmingly shows that growing up in poverty, especially since infancy, leads to serious disadvantages in cognitive abilities, emotional stability, and health. By the 2000s, the research was becoming overwhelming. For example, children who lived in families below the poverty line had, in one study over thirty years, completed two years less schooling, worked far fewer hours as adults, earned half the average wages, and were measurably less healthy. They also had higher incarceration rates.18 Some of these correlational studies are eye-popping. Neuroscientists found a high correlation between poverty in kids and the development of their brain, for example. But it did not demonstrate a clear causal relationship.19

Focusing on the effects of income alone in these studies is difficult. Other factors can affect child development, of course, such as parents’ educational attainment. But very clear demonstrations of the causal nature of low income and poverty are now plentiful. Particularly persuasive are so-called natural experiments. For example, an Indian tribe that built a casino distributed profits to their tribe’s families with children, and the consequences for children’s development compared to those who didn’t receive money was very significant. The children in households that received the money spent more years in school, had higher average wages as adults, and had lower incarceration rates.20

Perhaps the most interesting of these natural experiments, because it was so long term, was the comparison of the children of widows who received pensions in the twentieth century with those who didn’t.21 Again, the children of women who received pensions had better measurably outcomes than those whose mothers did not. Substantial increases in the EITC produced similar results: those who were children when the EITC benefit was significantly increased fared measurably better than those who weren’t.22

The important upshot of these studies was this: income mattered. A consensus report by leading scholars across the political spectrum commissioned by the National Institutes of Science, Engineering, and Medicine examined the wide range of studies completed over the past thirty years or more and concluded that “income poverty itself causes negative child outcomes.”23 This consensus, published in 2019 by the National Academies Press in a volume entitled A Roadmap to Reducing Child Poverty, presented a summary of evidence that even a politically diverse set of scholars would agree upon and is now accepted based on a range of studies and evidence.24 Thus, raising children out of poverty through cash payments or refundable credits, a consensus of academics now agreed, was imperative.

A book on child poverty by one of the authors of this report (Jeffrey Madrick’s Invisible Americans) summarizes other studies.25 A London School of Economics (LSE) report, published in 2013, narrowed an investigation of thousands of studies to thirty-four that truly isolated income from other influential factors. The LSE wrote: “Our review indicates clearly that money makes a difference to children’s outcomes.”26

The issue of race is explored in detail in Invisible Americans. Racial prejudice was a major component of the right-wing assault on welfare in the 1980s and 1990s. But careful research showed income mattered regardless of the ethnic or racial composition of families. Three researchers, Hirozaku Yoshikawa, Aber J. Lawrence, and William R. Beardslee, focusing on mental, emotional, and behavioral health, wrote in 2012, “the effect of poverty is independent of associated factors such as levels of parental education or race/ethnicity; there is little evidence that the harmful impact of poverty on child or youth health differs by race/ethnicity.”27

A recent study claims that for every dollar of the $100 billion the new CTC plan will cost, $8 will be returned as benefits to all children and $0.84 will be saved by taxpayers.

Another vein of research added further impetus to a call for income support for poor children. Researchers had long noted that many large democratic nations had established unconditional cash allowances or fully refundable tax credits for children. The United States was the outlier. These studies showed that parents did not waste the money but mostly spent it constructively on their children. A particularly influential study of how parents used a British cash allowance after an aggressive set of policies to reduce child poverty was developed in the early 1990s was revealing.28 The funds were spent on their children, not themselves. Another cross-national study showed that other democratic nations have on average as many single-mother families as America, rebutting the widespread claim that single mothers are what makes child poverty high in America compared to elsewhere.29 Finally, it is clear that reducing child poverty will result in more educated and capable workers, fewer incarcerations, and improved health care outcomes, requiring less government funding. A recent study claims that for every dollar of the $100 billion the new CTC plan will cost, $8 will be returned as benefits to all children and $0.84 will be saved by taxpayers.30

Invisible Americans advocated unconditional cash allowances for the poor children, as did earlier writings at the Bernard L. Schwartz Rediscovering Government Initiative of The Century Foundation,31 but the academic community coalesced around that principle around 2017 and 2018. It was the culmination of much of the careful academic work outlined above, which began years earlier.

As of 2016 studies, twelve nations already provide unconditional allowances—no strings attached (such as demands for frequent medical and dental visits) or fully refundable tax exemptions. They are Austria, Canada, Denmark, Finland, France, Germany, Ireland, Luxembourg, the Netherlands, Norway, Sweden, and the United Kingdom.32 The Libertarian Niskanen Institute also proposed an unconditional child allowance on the same grounds, though they would reduce benefits from other social programs.33

There was skepticism that an unconditional program would pass Congress, and there remained the lingering concern that poor parents could not manage the extra money. But the academic community rose to the occasion. A leader in these conversations has been the Columbia School of Social Work. The Bernard L. Schwartz Rediscovering Government Initiative contracted the Columbia scholars in 2015 to do a series of simulations on how far a cash allowance could reduce child poverty and at what cost. The results were very heartening. They found that child poverty could be cut roughly in half for a total cost of $100 billion.34

Scholars Luke Shaefer and Kathryn Edin then published a book finding a shockingly high proportion of children effectively live on $2 of cash a day.35 If food stamps are added in, the numbers are not as severe but still high. Moreover, food stamps are not the equivalent of cash. The book—aptly titled $2 a Day— received wide attention and helped awaken the nation to the issues. Other distinguished scholars in these years, such as Hilary Hoynes36 and Robert Moffitt,37 showed that social spending in America since welfare reform, EITC expansion and other changes, skewed away from the poor and very poor towards those above the poverty line or even twice the poverty line.

An academic paper authored by ten respected academics (including both the Columbia scholars and the $2 a Day authors) was written in 2018 and published by the Russell Sage Foundation that showed a high degree of unanimity about the value of unconditional cash allowances. The academics noted how little welfare there was in America for the nation’s poor. They wrote, “The only income benefits available to non-working families with children are SNAP and what is left of Temporary Assistance for Needy Families (TANF).”38

The academic group ultimately recommended a cash allowance for all children in America.39 It found cash itself to be indispensable to poor families. The amount proposed was a taxable $250 a month (or $3,000 per year). Thus, higher-income families would in effect receive less as they would pay more in taxes. The cost to reduce poverty by nearly half would come to roughly $100 billion a year. The cost estimates were based on the same analysis done by the Columbia scholars for the Rediscovering Government Initiative. One alternative included an additional $50 per month for children under the age of six. Invisible Americans makes a strong case for the value of cash and the need for a monthly cash allowance for all children.

Few believed an outright cash allowance was politically feasible. When one of the authors of this report wrote an op-ed piece for the New York Times in 2016 advocating an unconditional cash allowance for children, unrelated to work requirements, the editors said afterwards they got a multitude of angry letters. The headline was, “Handouts Are Often Better Than a Hand Up.” The letter writers argued the poor would waste the money, they were inherently bad parents, and on.40

But an academic and political consensus formed around refundable tax credits as a substitute for cash allowances. The National Academies consensus, chaired by scholar Greg Duncan, concluded that a $3,000 a year cash allowance would cut child poverty more than any other policies considered, and deep poverty by half.41 The refundable tax credit can be devised to perform very much like such a cash allowance. The next major step towards a federal refundable child tax credit for all was political leadership.

Political Leadership and a Brief Legislative History

Political leadership was the other critical element, along with academic research, to push the Biden CTC over the goal line. Tax credits to provide allowances for children have been progressively made more generous by the federal government since 1997. But credit for the march toward a full fledged, universal, unconditional child alliance was largely led by Democratic leaders in Congress, starting with a bill introduced by Representative Rosa DeLauro. In 2003, she introduced an amendment to make the tax credit fully refundable. All along, Nancy Pelosi, future speaker of the house, was an active partner in favor of the expanded child tax credit. Other Democratic legislators also lead the battle for the expanded CTC, including House Ways and Means chairman Richard Neal, Representative Suzan DelBene, and Senators Michael Bennet and Sherrod Brown. Over the years, Republicans typically fought the growing generosity of the tax credit, citing the CTC for example as a classic Democratic case for income redistribution.

The year 2019 was a key one. Before COVID-19, both Houses of Congress introduced the fully refundable CTC as part of the American Family Act (AFA). All but the wealthiest would be included—in other words, for the first time, no poor child would be left out. The credit was made larger and would be delivered monthly. The AFA had broad support of Democrats in both houses. Later that year, the House Ways and Means Committee formally passed a version of the refundable CTC to come in the Economic Mobility Act of 2019.42 In 2020, as Congress considered relief packages in response to COVID-19, many advocates of the CTC argued for inclusion of it as part of a response.

The table was set for President Biden to support a one-year universal CTC for all children in his 2021 American Rescue Plan Act (ARPA), which passed in March.43 By this time, Senator Cory Booker and Representative Ritchie Torres joined the leadership team pushing the effort. The ARPA expansion raised the CTC from $2,000 per child to $3,000 per child for children over the age of 6 and from $2,000 to $3,600 for children under the age of 6.44 It made the Child Tax Credit fully refundable and raised the age limit from age 16 to 17. The CTC was delivered in monthly payments of $300 for children under age 6 or $250 for children over 6 beginning on July 15. The CTC expansion is projected to reduce the supplemental poverty measure (SPM) by 45 percent (from 14 percent to 7.5 percent) according to Columbia Center on Poverty and Social Poverty researchers.45 Fully 90 percent of children under age 18 would benefit from the CTC expansion.46

Looking Forward

There is an ongoing political battle on whether and for how long the new CTC can be extended. In September, the House Ways and Means Committee passed a version of Biden’s Build It Back Better Act, a $3.5 Trillion Budget Reconciliation Bill, which included a refundable CTC.47 It would continue the expanded Child Tax Credit of the American Rescue Plan Act until 2025 and make the credit fully refundable on a permanent basis.48 It would also repeal a 2017 Trump era tax change which required children to have a Social Security number to be eligible for the CTC, allowing 1 million low-income immigrant children able to access this crucial program.49 This important program expansion should be extended permanently in order to fulfill America’s promise to protect the working poor.


The authors would like to thank Ellie Kaverman, Indi Dutta-Gupta, Rebecca Vallas, Shawn Fremstad, among others for their comments and suggestions. All content is the sole responsibility of the authors.


  1. “The Child Tax Credit,” The White House, September 3, 2021,
  2. Claire Zippel, “After Child Tax Credit Payments Begin, Many More Families Have Enough to Eat,” Center on Budget and Policy Priorities, August 30, 2021,
  3. Brian Abel‐Smith, “The Beveridge Report: Its Origins and Outcomes,” International Social Security Review 45, no. 1–2 (1992): 5–16,
  4. Ibid.
  5. Joshua McCabe and Elizabeth Popp Berman, “American Exceptionalism Revisited: Tax Relief, Poverty Reduction, and the Politics of Child Tax Credits,” Sociological Science 3 (July 6, 2016): 540–67,
  6. Joshua McCabe and Elizabeth Popp Berman, “American Exceptionalism Revisited: Tax Relief, Poverty Reduction, and the Politics of Child Tax Credits,” Sociological Science 3 (July 6, 2016): 540–67,
  7. Charles Lockhart, “American Exceptionalism and Social Security: Complementary Cultural and Structural Contributions to Social Program Development,” The Review of Politics 53, no. 3 (1991): 510–29,
  8. Ibid.
  9. Ibid.
  10. Ife Floyd, Ladonna Pavetti, Laura Meyer, Ali Safawi, Liz Schott, Evelyn Bellew, and Abigail Magnus, “TANF Policies Reflect Racist Legacy of Cash Assistance,” Center on Budget and Policy Priorities, August 4, 2021,
  11. “Social Security In America,” Social Security Administration, Committee on Economic Security (CES),
  12. Bryce Covert, “The Myth of the Welfare Queen,” The New Republic, October 12, 2021,
  13. “Charles Murray,” Southern Poverty Law Center, accessed October 12, 2021,
  14. Peter Edelman, “The Worst Thing Bill Clinton Has Done,” The Atlantic, March 1997,
  15. Ife Floyd, Ladonna Pavetti, Laura Meyer, Ali Safawi, Liz Schott, Evelyn Bellew, and Abigail Magnus, “TANF Policies Reflect Racist Legacy of Cash Assistance,” Center on Budget and Policy Priorities, August 4, 2021,
  16. “Children in Poverty,” Child Trends, accessed October 12, 2021,
  17. See, for example, William Julius Wilson, The Truly Disadvantaged: The Inner City, the Underclass, and Public Policy (Chicago: University of Chicago Press, 1987).
  18. A Roadmap to Reducing Child Poverty, ed. Greg J. Duncan and Suzanne Le Menestrel (Washington, D.C.: The National Academies Press, 2019),
  19. Ibid.
  20. Robin J. Anderson, “Tribal Casino Impacts on American Indians Well-Being: Evidence from Reservation-Level Census Data,” Contemporary Economic Policy 31, no. 2 (2011): 291–300,
  21. A Roadmap to Reducing Child Poverty, ed. Duncan and Le Menestrel.
  22. H. Luk Shaefer, Sophie Collyer, Greg Duncan, and Kathryn Edin, “A Universal Child Allowance: A Plan to Reduce Poverty and Income Instability among Children in the United States,” RSF: The Russell Sage Foundation Journal of the Social Sciences 4, no. 2 (2018): 22,
  23. A Roadmap to Reducing Child Poverty, ed. Duncan and Le Menestrel, 89.
  24. Ibid.
  25. For more discussion, see Jeff Madrick, Invisible Americans: The Tragic Cost of Child Poverty (New York: Alfred A. Knopf, 2020).
  26. Kerris Cooper and Kitty Stewart, “Does Money Affect Children’s Outcomes?” JRF, July 27, 2018,
  27. Hirozaku Yoshikawa, Aber J. Lawrence, and William R. Beardslee, “The effects of poverty on the mental, emotional, and behavioral health of children and youth: Implications for prevention,” American Psychologist 67, no. 4 (2012): 272–84,
  28. Paul Gregg, Jane Waldfogel, and Elizabeth Washbrook, “That’s the Way the Money Goes: Expenditure Patterns as Real Incomes Rise for the Poorest Families with Children,” A More Equal Society? New Labour, Poverty, Inequality and Exclusion (Bristol, U.K.: Policy Press, 2005), 250–74,
  29. David Brady and Rebekah Burroway, “Targeting, Universalism, and Single-Mother Poverty: A Multilevel Analysis Across 18 Affluent Democracies,” Demography 49, no. 2 (2012): 719–46,
  30. Irwin Garfinkel, Laurel Sariscsany, Elizabeth Ananat, Sophie Collyer, and Christopher Wimer, “The Costs and Benefits of a Child Allowance,” issue brief, August 2, 2021,
  31. “Rediscovering Government,” The Century Foundation, accessed September 23, 2021,
  32. H. Luke Shaefer, Sophie Collyer, Greg Duncan, and Kathryn Edin, “A Universal Child Allowance: A Plan to Reduce Poverty and Income Instability among Children in the United States,” RSF: The Russell Sage Foundation Journal of the Social Sciences 4, no. 2 (2018): 22,
  33. Samuel Hammond and Robert Orr, “Niskanen Report: Toward a Universal Child Benefit,” Niskanen Center, December 21, 2019,
  34. Jeff Madrick, Invisible Americans: The Tragic Cost of Child Poverty (New York: Alfred A. Knopf, 2020).
  35. “$2 A Day,” $2 a Day, accessed September 23, 2021,
  36. Hilary W. Hoynes and Diane Whitmore Schanzenbach, “Safety Net Investments in Children,” Brookings Papers on Economic Activity 2018, no. 1 (2018): 89–150,
  37. Robert A. Moffitt, “The Deserving Poor, the Family, and the U.S. Welfare System,” Demography 52, no. 3 (2015): 729–49,
  38. H. Luke Shaefer, Sophie Collyer, Greg Duncan, Kathryn Edin, Irwin Garfinkel, David Harris, Timothy M. Smeeding, Jane Waldfogel, Christopher Wimer, and Hirokazu Yoshikawa, “A Universal Child Allowance: A Plan to Reduce Poverty and Income Instability among Children in the United States,” RSF: The Russell Sage Foundation Journal of the Social Sciences 4, no. 2 (2018): 22,
  39. Ibid.
  40. Jeff Madrick, “Handouts Are Often Better Than a Hand Up,” New York Times, April 7, 2016,
  41. Greg J. Duncan and Suzanne Le Menestrel, A Roadmap to Reducing Child Poverty (Washington, D.C.: The National Academies Press, 2019).
  42. U.S. Congress, House, Economic Mobility Act of 2019, HR 3300, 116th Cong., 1st sess., introduced in House June 18, 2019,
  43. “President Biden Announces American Rescue Plan,” The White House, March 12, 2021,
  44. “The Child Tax Credit,” The White House, September 3, 2021,
  45. “A Poverty Reduction Analysis of the American Family Act,” Center on Poverty and Social Policy, Columbia University, 2021,
  46. “American Rescue Plan Act Will Help Millions and Bolster the Economy,” Center on Budget and Policy Priorities, March 15, 2021,
  47. “Neal Applauds Committee Advancement of Build Back Better Act,” House Ways and Means Committee, September 15, 2021,
  48. “Bennet Applauds Expansion of Child Tax Credit through 2025 and Permanent Full Refundability in House Ways and Means Committee Budget Bill,” Michael Bennet, September 11, 2021,
  49. Arohi Pathak, “Making CTC and EITC Expansions Permanent Would Reduce Poverty and Grow the Economy,” Center for American Progress, September 21, 2021,