Contained within the recently passed American Rescue Plan might be one of its most important programs in the lives of individual Americans — a fundamental restructuring of the Child Tax Credit.
The current way our country tackles child poverty — and poverty in general — is fundamentally broken. The pre-ARP CTC, Additional Child Tax Credit and Earned Income Tax Credit exclude the neediest children, who are disproportionately people of color. There is the political will and capacity to make the ARP’s expansion of the CTC permanent, effectively creating a social security program for children. In fact, Sen. Mitt Romney, R-Utah, has an even better proposal compared to the ARP — but we only have one year and one shot to do this right.
Before the pandemic, the United States already had one of the highest rates of childhood poverty amongst Organisation for Economic Co-operation and Development countries: One in seven children were food insecure. This childhood poverty costs the economy up to $1.1 trillion a year and harms kids’ mental and physical health, academic performance and social mobility. It also leads to an increased likelihood of being incarcerated. Most of all, it is just plain cruel, especially when other nations keep kids out of poverty with robust social safety nets — something we lack.
According to the People’s Policy Project, a left-wing think tank, the CTC, ACTC and EITC give “essentially nothing” to the poorest “9 percent of children” and “the next poorest 11 percent of children receive less than the maximum amount.” This is called a phase-in: You first need to make a certain amount of money to qualify, and then more in order to receive the full benefit. Those exempted are the very people who would benefit the most from such programs. A universal child benefit would fix this.
The ARP’s changes to the CTC are going to be hugely beneficial. It removes the awful phase-in of benefits, expands the benefit from $2,000 per year to “as much as $3,600 per child” and distributes it on a monthly basis instead of at the end of the tax year, helping families pay for essentials now. The benefit is still flawed, however. The biggest problem is that it will expire at the end of this year.
First, like in the ARP, we should eliminate the phase-in of the CTC and EITC. As previously stated, these phase-ins hurt the poorest kids especially, and getting rid of them expands the full benefit to “roughly half of all Black and Latino children … whose families now don’t get the full credit.”
Next, this benefit should be made universal; it would be like social security for children. The White House has consistently cited a Columbia University study that says that the ARP’s benefit will “cut child poverty by more than half,” but this relies on the false premise that everyone who qualifies for the benefit will receive it. Because people need to prove their circumstances and apply for these programs, the IRS reports only 78 percent of people who qualify for the EITC claim it, and that number is as low as 23 percent for the Temporary Assistance for Needy Families benefit. Guaranteeing that every child with a social security number will receive these benefits will help those people who often fall through the cracks.
And finally, we should combine the CTC and EITC and increase the benefit to at least $378 a month — about $4,540 a year — per child. According to federal poverty guidelines, $374 “is the amount it would take to ensure that no family ever slips into poverty solely because they added a child to their family.”
There are several arguments against a universal child benefit. Sen. Mike Lee, R-Utah, and Sen. Marco Rubio, R-Fla., claimed that such a benefit lacking work requirements would disincentivize work. The evidence, however, shows no negative effect on the labor participation rate — in fact, the labor participation rate may even increase.
Another argument against child social security is that this incentivizes people to have kids when they cannot financially support them. But that leaves out the question of the child’s well-being entirely when we have shown such a benefit improves their health and access to opportunities.
Circumstances can also change — family members can unexpectedly lose income or their jobs. Life is complicated, and government programs should accommodate that.
And the benefit’s final argument — that such a benefit is not enough, that it leaves out universal health care and child care and does not combat poverty enough — I wholeheartedly agree with. But the proposal that I have outlined above is something that we can pass today with Joe Manchin or even Mitt Romney acting as the linchpin vote.
This proposal is something where lobbying your congressional representatives and senators could actually impact its passing. And while it is no political or policy revolution, it brings us back in line with the philosophy that created the New Deal and Great Society — that all of us deserve economic dignity.
Carter Moyer HM ’24 is from Rye, New York. He hopes to convince people to support universal welfare programs instead of inefficient, means-tested, trapezoid-shaped ones.