How the Child Tax Credit Took Child Poverty to a Record Low
U.S. Census data earlier this week showed that the U.S. childhood poverty rate had reached a new all-time low of 5.2 percent in 2021.
U.S. Census data earlier this week showed that the U.S. childhood poverty rate had reached a new all-time low of 5.2 percent in 2021. The childhood poverty rate surged to 27.9 percent in 1993.
“[Supplemental Poverty Measure] child poverty rates fell 46% in 2021, from 9.7% in 2020 to 5.2% in 2021, a 4.5 percentage-point decline,” the Census report said. “This is the lowest SPM child poverty rate on record. In 2021, SPM child poverty rates fell for non-Hispanic White (2.7%), Black (8.1%), and Hispanic (8.4%) children, also their lowest rates on record. SPM rates for Black and Hispanic children were not statistically different. The SPM rates for Asian children in 2021 were not statistically different from 2020,” the Census report said.
The 2021 figure was connected to a specific policy change: the arrival that year of the expanded child tax credit, a pandemic-era effort to put cash in the pockets of American families, specifically with direct payments in the last six months of the year. The Biden administration had sought to expand the policy for an additional year but lacked the votes to do so.
“The 2021 Child Tax Credit (CTC) and Advance Child Tax Credit represent examples of programs based on children’s needs, in two ways,” a Child Trends analysis of the data said. “First, the very premise of the 2021 expansion of the CTC was based on research that shows the importance of economic stability for child well-being and the value of investing in the early childhood years (a period of intensive brain development). The Advance CTC provided families with children predictable monthly payments of up to $250 per child for children ages 6 to 17, and up to $300 per child under age 6. Second, its eligibility requirements were based on the child’s citizenship status, not that of the parent.”
Echoing that sentiment was a politician who was instrumental in enacting the extended credit and pushed for its extension, Rep. Richard Neal (D-MA), the House Ways and Means Committee chairman.
“Child poverty has been cut in half thanks to the remarkable success of the American Rescue Plan’s expanded Child Tax Credit (CTC). Without a single Republican vote, we delivered financial relief that kept food on the table and put daily essentials within reach. Many didn’t believe us when we touted the potential of this expanded, refundable credit, but the data show its impact surpassed our expectations,” Neal said in a statement.
“Working Americans and families deserve long-term, sustainable support, and it’s clear the CTC is our most effective tool. Republican opposition is threatening this progress, but the Ways and Means Committee will not stop fighting to permanently extend this lifeline,” he added.
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.