Did the First Child Tax Credit Work? Experts Say It Did.

September 12, 2021 Topic: economy Region: Americas Blog Brand: The Reboot Tags: TaxesChildrenCreditsAmerican Rescue PlanEconomy

Did the First Child Tax Credit Work? Experts Say It Did.

What impact did the program have on reducing childhood hunger?

Here's What You Need to Remember: The payments coincided with a notable reduction in “economic hardship,” including hunger.

The first round of payments from the expanded child tax credit, which was signed into law as part of the American Rescue Plan Act in March, went out to eligible Americans on July 15, with the second payment arriving on August 13.

The payments coincided with a notable reduction in “economic hardship,” including hunger, according to the government report.  

The census report, which was released last week, states that “a drop in the number of households with children that reported food insufficiency and trouble paying household expenses may be linked to the child tax credit checks issued last month.”  

The report was the latest Household Pulse Survey (HPS). Before the first payment, about “11 percent of households with children reported that they sometimes or often did not have enough to eat in the past week,” according to Politico. After the first round of payments, that number had dropped to 8 percent.

There was not a similar change in families without children, indicating that the credit may be the reason.  

“The survey shows introduction of the CTC coincided with a drop in food insufficiency in households with children. It also showed that in those households, there was a drop in difficulty paying weekly expenses,” according to the census report. 

“Although HPS data show an overall decline in the share of adults in households experiencing food insufficiency (sometimes or often not having enough to eat), the drop was largely driven by adults in households with children,” the census report stated. “Even though adults in households with children are more likely to experience food insufficiency, those households saw a 3 percentage point decline between the surveys conducted before and after the CTC payments.” 

“It is great news that the estimated rate of hunger among those with children is at a pandemic low,” Diane Whitmore Schanzenbach, director of the Institute for Policy Research at Northwestern University, told Politico in a story about the release.  

Some Democrats have proposed extending the expanded child tax credit further into the future, or possibly even making it permanent.  

“The new Child Tax Credit enacted in the American Rescue Plan is only for 2021. That is why President Biden strongly believes that we should extend the new Child Tax Credit for years and years to come. That’s what he proposes in his American Families Plan,” the White House website states.  

Per CNBC, the current version of the Democrats’ reconciliation budget package, which is essentially a revised version of the American Families Plan, would indeed extend the expanded child tax credit, among other programs to expand the social safety net. Until then, the expanded tax is only available for the current year.  

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. 

This article was first published last month and is being reposted due to reader interest. 

 Image: Reuters