Congress to Blame for the Child Poverty Rate
Health and Gender Policy Brief #165 | By: Geoffrey Small | October 2, 2023
Photo taken from: brookings.edu
On September 12th, the Census Bureau released a report on the current poverty rates in the United States. The report indicated that the official overall poverty rate didn’t significantly change. Black individuals also reported 2022 poverty rates as the “lowest on record.” Despite the overall stability and positive trends across racial boundaries, one categorical poverty rate lies in stark contrast. The Census Bureau reported that between 2021 and 2022, child poverty has “more than doubled.” A Brookings Institute study illustrates why the child poverty rate has dramatically increased in the United States. This policy analysis will explore the benefits of the Child Tax Credit, an act that was allowed to expire by Congress, as the main factor contributing to the overall reduction of child poverty in 2021 and its drastic increase in 2022.
In 2021, Congress passed the American Rescue Plan Act, which was a stimulus package designed to support Americans financially during the COVID-19 pandemic. The Child Tax Credit was part of the stimulus, which provided a historic increase from the original $2,000 per child to $3,000 for children 6 years and over, as well as $3,600 for children under 6. Families also received this stimulus in sums of $250 to $300 per child each month automatically. However, on December 30th, 2021, Congress let the American Rescue Plan Act expire by not voting to renew it. As a result, monthly payments stopped, and the credit reverted back to $2,000 per child. Senator Bernie Sanders was on record stating that the Senate did not have enough votes to move forward with continuing the Child Tax Credit. He blames centrist Democratic Senator Joe Manchin and Independent Senator Kyrsten Sinema for not pledging to vote in favor of a continued increase, which would ensure a majority vote. With Republicans maintaining a House majority, there was no hope for a vote in favor of continuing the increased tax credit.
The Brookings Institute conducted a study, which indicated that the Child Tax Credit reduced poverty across all states with different cost-characteristics. However, the most dramatic reduction was in states with a low cost of living and high poverty rate. As a result of this tax credit increase, The Census Bureau reported that child poverty fell to 5.2%, the lowest rate in history.
After Congress failed to renew the American Rescue Plan Act, the 2022 census reported the first increase in their supplemental poverty measurement since 2010, which is a more nuanced assessment when compared to the official poverty rate. More significantly, the rate of child poverty increased from 5.2% in 2021 to 12.4% in 2022. This rate has more than doubled since tax credits have reverted back to the original amount.
The Brookings Institute states that “child poverty is a persistent national issue with lifetime and intergenerational consequences.” When policies change, it is generally hard to place accountability on one branch of government, and it may take years to fully assess the impacts of these decisions. However, the evidence that has been presented in relation to child poverty between 2021 and 2022 holds an incontrovertible truth. As a result of congressional inaction, this branch of government is solely responsible for the drastic increase in the rate of child poverty. We must hold our congressional officials accountable by calling our representatives and urging them to atone for this grave error by renewing the child tax credit. UNICEF USA is an organization that is working to spread the word and help resolve the renewed child poverty crisis. Please consider donating to their movement.
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