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After The Tax Credit Expires, Child Poverty Rises, According To A Study |Latest News

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According to a new study, the number of children in poverty in the United States rose dramatically after just one month without the expanded child tax credit payments. People concerned about poverty reduction fear their efforts could be thwarted if payments aren’t resumed soon.

Center on Poverty and Social Policy at Columbia University estimates an additional 3.7 million children were living in poverty by January, an increase of 41% since families received their last check-in in December. Despite beginning in July of last year, federal assistance came to an end when President Joe Biden’s Build Back Better bill was halted by an impasse in Congress. On the 15th of each month, the bank accounts of up to $300 per child received direct payments of up to $300 each.

The monthly child poverty rate rose from 12.1 percent in December to 17 percent in January, according to a Columbia University study that combines annual census data with monthly data from the Census Bureau’s Current Population Survey. High unemployment and a resurgence of COVID-19 pushed the U.S. to its highest level since December 2020, when COVID-19 returned. Poverty rates rose the fastest among children of color and Latinos, at 5.9 percent and 7.1 percent, respectively.

“The sudden spike shows how quickly the payments became core to household financial stability,” Megan Curran, policy director for the Center on Poverty and Social Policy, said.

After The Tax Credit Expires, Child Poverty Rises, According To A Study |Latest News

As Curran put it, “It really had a huge impact right away.” When the payments began, we saw a drop in food insecurity almost immediately. But now, all of that progress is at risk.

As a result, the original goals of the child tax credit program, which aimed to reduce child poverty in the United States by half, have been significantly surpassed. Biden’s $1.9 trillion COVID-19 rescue package last year reshaped the existing child tax credit program, increasing payments, expanding the pool of eligible families, and delivering the money in monthly installments designed to be integrated into day-to-day home budgets.

Read More: Individuals Who Are Filing Their First Tax Return Can Benefit From This Step-by-step Tax Guide.

At an annual cost of about $120 billion, the program extended payments of $250-per-month for children ages 6 to 17 and $300-per-month for children under 6 to most families. The idea was to give parents a monthly budget to work with and the freedom to spend it however they saw fit.

A majority of Republican legislators oppose the proposed increase in the child tax credit, calling it inflationary and a disincentive to work. However, many Democrats openly stated their intention to make the payments a permanent part of the American social safety net when it was first passed.

When the Democrats took control of Congress, they set out to ensure that the tax credit would continue and fight for its continuation months from now with data and millions of anecdotes about its advantages.

Sen. Joe Manchin of West Virginia, who had been stalling on his vote for weeks before finally refusing to back Vice President Biden’s social spending plan, brought down the Democratic majority in the Senate, which had 50 members. Manchin’s concerns about the bill include his opposition to the bill’s high price tag for the child tax credit.

Read More: At This Point, It Appears That a Fourth Incentive Check Is Not Possible: However, Make Sure You Have Received Your Child Tax Credit Payment.

Senator Martin Heinrich, a Democrat from New Mexico, said in a statement Wednesday that nearly all of his state’s children were benefiting from the expanded child tax credit, and letting it expire was “a moral failure.”

After The Tax Credit Expires, Child Poverty Rises, According To A Study |Latest News

More than one-fifth of families surveyed by the nonprofit advocacy group ParentsTogether Action said they could no longer afford housing or enough food for their children as a result of the lapsed child tax credit payments.

“These really hard choices” were designed to prevent parents from having to make them, said Allison Johnson, campaign director for the group.

According to Johnson, the elimination of the deposits will make it nearly impossible for families in financial need, who may be struggling to pay off debt or deal with major expenses, to build financial stability or momentum.

Read More: The Monthly Child Tax Credit Payments Have Come to an End; Here’s What Will Take Their Place.

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