Congress should consider the expanded Child Tax Credit (CTC), given to pandemic-stricken families from July to December last year, an experiment — a relatively successful one.
And that’s why lawmakers should revive it — with some revisions that will save money, while also directing funds to families for whom it will do the most good.
Between July and December 2021, as the pandemic and its dreadful effects on household incomes and budgets continued, families with children under the age of 17 received advance CTC payments each month of up to $300 a child. Nearly every household with children was eligible; single parents earning less than $200,000 and married couples earning under $400,000 also were eligible.
This approach was a smart one during the pandemic, allowing families to get the cash in monthly advances, instead of waiting to claim it on their annual tax returns.
Now, smarter still, would be for Congress to restore the program, which expired in December. While some of the effects of the pandemic still are being felt, they have collided with high prices at the gas pump and at the supermarket. Rents, of course, are soaring, especially in Greater Miami, a community where income inequality is particularly acute.
Romney on board
“It helped a lot of families, that I see,” Alyssa Delgado told the Editorial Board, referring to the CTC. She is the prosperity coaching manager for Catalyst Miami.
Miami’s congressional lawmakers should be pushing the hardest to make it happen — even Mitt Romney, R-Utah, is pushing a version of the plan According to the United Way of Miami’s ALICE Report, in 2018, 54% — more than half — of the county’s almost 900,000 households were “Asset Limited, Income Constrained, Employed” (That’s where “ALICE” comes from.) As unitedforalice.org makes clear: “ALICE workers educate our children, keep us healthy, and make our quality of life possible, yet do not earn enough to support their own families. ALICE households are forced to make tough choices, such as deciding between quality childcare or paying the rent, which have long-term consequences not only for ALICE, but for all.”
And according to the Federal Reserve, the expanded Child Tax Credit, in the space of just six months, took some of that pressure off families’ shoulders: “Parents who received monthly CTC payments most frequently saved the payments, spent them on their child or used them for necessities. Saving was the most common use of the monthly CTC payments, with 43% of recipients saying they saved at least a portion of them. Other common uses were spending on their child (40%); spending on food (31%); and spending on rent, mortgage, or utilities (29%).
And note: There was no mention of parents spending the money on drugs, of such grave concern to buzzkill Sen. Joe Manchin, D-West Virginia, that his opposition to extending the advanced CTC pretty much scuttled the initiative. Buying drugs would be a devastating misuse of these funds. However, Manchin was spreading hearsay, even when he was presented evidence to the contrary. So millions of law-abiding, hardworking families are going without, again.
Delgado told the Editorial Board that, given the benefits, the CTC should definitely be restored — and that there’s room for improvement.
“It was necessary, with so many rising costs — and gas wasn’t even as insane as it is now,” she said. She said that families need to be much better educated as to the fact that taking the funds incrementally means they’ll receive less money in their annual tax refund.
“It should be an option, not mandatory,” she said. “Some people depend on that bulk amount.” Also, she said, factor in asset-building, to help families break generational poverty. “Baby bonds” are gaining traction. Catalyst has created child savings accounts. “We’ve enrolled thousands of parents and their kids,” Delgado said. The organization received a grant to start clients’ accounts and to provide a match. Parents provide the rest of the funds, deposited regularly.
We would recommend, too, that the income cap of this worthwhile program should be lowered. Families earning just shy of $400,000 likely aren’t struggling as much to put food on the table.
The Child Tax Credit should not have been allowed to lapse. Congress should bring back to life this life-enhancing initiative.