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Op-ed: We have the tools to end childhood poverty. Why don’t we?

One year after the last monthly Child Tax Credit payment, Congress has failed to gather enough support to extend this program, which our research suggests provided a critical safety net to American families.

A key part of the American Rescue Plan Act, the Child Tax Credit provided $3,600 for each child under six and $3,000 for each child between 6 and 17. Monthly payments of $250 or $300 were disbursed between July 2021 and December 2021. Notably, all families with an income of up to $150,000 for a two-parent household, or $112,500 for a single-parent household, were eligible for the full credit. Almost 40 million families, with a total of 65 million children, benefited.

How effective was the CTC?

In January 2022, our team posed a question to more than 1,700 parents. “Please tell us, in your own words, how receiving the $250 or $300 monthly payment for each child in your family for the past six months affected you and your family.” Parents were overwhelmingly grateful for the additional support.

Some responses were heartbreaking. A Florida mother told us that the CTC saved her and her children from homelessness. A Virginia father explained that the monthly payments helped them avoid eviction. A New Jersey mother said simply: “It saved us.”

Many low-income parents used the funds to cover groceries, utilities and emergency necessities such as repairing a broken furnace. One said that the CTC helped their family “stay afloat.” Others explained that it “saved us completely” and “made it easier to afford life.” In West Virginia, where social safety net programs are estimated to keep 80,000 children above the poverty line, one single mother said “It helped with bills and being able to allow my children to get more things than I can provide.”

Middle and upper-income families benefited too, though they were more likely to describe putting the money away for educational or other savings. Still, in the words of one Pennsylvania mother, the CTC “gave us peace of mind. Extra bills were paid, Christmas buying wasn’t as stressful, lots more fresh food in the house (fruits, veggies, quality proteins). We could just breathe and not worry about making it paycheck to paycheck.”

Many parents were concerned about inflation, noting that CTC payments barely covered rising costs of groceries, gas and utilities. “I am not sure how we are going to handle things financially when the monthly payments stop and we have to start paying our student loans again,” one Wyoming mother told us. “I am already losing sleep and having anxiety attacks over it.”

Parents are right to worry. Raising a child just to age 18 now costs approximately $300,000. Some research predicts that overturning Roe v. Wade will result in as many as 440,000 additional babies born annually, costing American parents up to $132 trillion dollars each year. When parents cannot afford to raise their children, the entire economy suffers. Childhood poverty already costs the U.S. more than $1 trillion per year via poorer health outcomes, reduced productivity, and higher crime. That’s why experts estimate that a permanent refundable tax credit at 2021 levels would cost $109 billion per year, but save $240 billion per year.

And here’s the good news: the CTC worked. In 2021 — just one year — the expanded credit, combined with other pandemic relief policies, cut childhood poverty in half, according to the U.S. Census Bureau. But most of this progress was erased once the CTC expired, with 3.7 million more children experiencing poverty the following month.

Today the evidence is clear. Childhood poverty, and all of its associated negative effects, is not merely some unfortunate accident. Childhood poverty is a policy choice.

Leah Hamilton is an associate professor at Appalachian State University and a faculty affiliate with the Social Policy Institute at Washington University in St. Louis. Fanice Thomas is the associate director of policy and strategy at the Social Policy Institute at Washington University in St. Louis.  

The views expressed in this article are the writers’ own.