The expanded child tax credit briefly slashed child poverty. Here's what else it did
The monthly cash payments reached more than 61 million kids in December alone. Most low-income families spent the money on basic needs like food, clothing and utility bills.
STEVE INSKEEP, HOST:
For most people, most of the time, a change in the federal tax code is hard to feel. Your take-home pay goes up a few bucks or down a few bucks, depending on the change. But for many American families, a child tax credit last year made a significant difference. Their income put them below the federal poverty line, and the tax credit moved them above it. Sixty-one million children benefited between July and December from payments as much as $300 per month. Now the credit is over and not renewed. So NPR's Cory Turner asks what, if anything, it accomplished.
CORY TURNER, BYLINE: There are two kinds of answers to that question. One comes from taking a cold, hard look at the data and the other comes from listening. So before we get to the data, here are half a dozen parents all living on $30,000 a year or less explaining what these monthly payments meant to them.
JESS HUDSON: I was elated.
TYSA ROSE: The water bill is a little high this month. Thank God I got this extra 300.
ODESSA DAVIS: Me and my son can go get fast food without making sure, like, I didn't hit the negative balance.
LAVERN RIDDICK: Underwear, socks, school supplies.
DAVIS: Three or four bills. There's, like, more groceries in the house. Pay for gas, anything my son needed for school.
HUDSON: The aftercare at my son's school so that I could pick him up when I was done with my school.
RIDDICK: I used my child's tax credit to pay my gas bill, pay my rent before, medicine if needed.
JOEL BARRON: Medically because of her feet, she needs certain shoes.
HUDSON: So I was being thrown a lifeline that I desperately needed so that I could graduate, so that I can get a job, so that maybe we'll be a bit more stable.
TURNER: That was Jess Hudson, who lives near San Francisco, Tysa Rose in Fargo, N.D., Lavern Riddick of Philadelphia, Odessa Davis of Silver Spring, Md., and Joel Barron in Minnetonka, Minn. As for the data, they echo much of what we just heard. Multiple analyses found that low-income families overwhelmingly spent the money on basic needs, with food topping the list, followed by utilities and housing, clothing and school costs - or as Tysa Rose, the mother in Fargo, told me...
ROSE: No one is really trying to live like the Kardashians, you know? We're just trying to sustain (laughter).
TURNER: The data suggest food insufficiency also dropped by a quarter. That's when over the course of a week, a family doesn't have enough to eat either sometimes or often. One of the biggest differences between this expanded child tax credit and the more limited benefit it replaced is that the old version had a hole in it. Millions of children did not qualify to receive the full benefit because their families didn't earn enough money. Many of the kids who needed help the most got the least. Well, this short-lived expansion closed that hole and, according to the data, made a big dent in child poverty.
MEGAN CURRAN: Monthly child tax credit payments have an effect by the end of their six months, reduce child poverty in the U.S. by about 30%.
TURNER: Megan Curran is policy director at the Columbia University Center on Poverty and Social Policy. And she says her team's work, along with other researchers studying the data, make pretty clear...
CURRAN: The extended child tax credit has been a very good thing for children and families.
TURNER: And what of the fear voiced by some of the benefits' opponents that a monthly check would entice parents to work less?
HUDSON: Five-hundred dollars a month isn't enough for me (laughter) to quit looking for a job. I can't live on that.
TURNER: Jess Hudson, a mother of two, says it was enough, though, to cover aftercare for her 10-year-old son so she could get her undergraduate degree.
HUDSON: It was enough to give me child care help so that I could finish school so that I could get a job, so that I can participate in the economy in the ways that I want and need to do.
TURNER: And Curran at Columbia says the data show no evidence of parents dropping out of the workforce. One last data point worth mentioning is cost. The price tag for this expansion is about $100 billion a year more than the old version, one reason Republicans and a few moderate Democrats are now refusing to extend it. Meanwhile, researchers warn much of this good news for children and families will likely evaporate as quickly as the benefit did.
Cory Turner, NPR News.
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