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DelBene, DeLauro, Torres Introduce Legislation to Expand the Child Tax Credit to Permanently Give Families Monthly Payments and Cut Child Poverty Nearly in Half

One year of the American Family Act included in COVID-19 Rescue Package that would give families monthly payments of $250 per child and $300 for kids under 6

Today, Representatives Suzan DelBene (WA-01), Rosa DeLauro (CT-03), and Ritchie Torres (NY-15) reintroduced the American Family Act, legislation to permanently expand and improve the Child Tax Credit (CTC) and make it a dramatically more effective tool for reducing child poverty and supporting families with kids. President Biden’s American Rescue Plan includes one year of an expanded and improved CTC modeled after the American Family Act.

The American Family Act would provide up to $300 per-month, per-child for children under 6 years of age and $250 per-month, per-child for children 6-17, increasing the credit for all children. This bill also, for the first time, makes the credit fully refundable and extends the CTC to the United States Territories.

“The Child Tax Credit is a proven tool that successfully lifts families out of poverty and shrinks class divides but it still leaves behind one-third of all children who are in families who earn too little to get the full credit. Those left behind disproportionately include families led by single mothers, rural families, and one-half of Black and Hispanic children,” said DelBene. “The American Family Act would correct this issue by giving lower-income families access to the full credit. It would also increase the benefit amount and provide payments monthly. This is a smart way to deliver relief during the pandemic to families struggling to make ends meet but also a good long-term policy that can lift millions out of poverty. If we don’t act now, we will miss a historic opportunity to give millions of children a brighter future.”

“The United States is exceptional and admired for many reasons but not for ending child poverty,” said DeLauro. “The coronavirus has exposed serious inequities which have always existed, particularly as it relates to communities of color, and we have a real opportunity here to build the architecture for the future and use this as a moment to address these inequities and lift children out of poverty. The inclusion of an expansion and improvement of the Child Tax Credit in coronavirus rescue legislation moving in the House this week is groundbreaking, but we cannot stop there. We must use this moment to pass the American Family Act and permanently expand and improve the child tax credit by increasing the benefit to families and providing payments monthly. Children and families must be able to count on this benefit long after the end of this pandemic.”

“As we confront the greatest economic downturn since the Great Depression, millions of Americans are experiencing immense hardship,” said Torres. “We can and must do better for America’s working families. I have long fought to implement one of the most effective anti-poverty tools: the child tax credit. Congress must act boldly to increase and strengthen these programs to lift millions of workers and children out of poverty. I look forward to passing President Biden’s American Rescue Plan to deliver the kind of expansion of the child tax credit that Americans deserve and need.”

“The Children’s Defense Fund envisions a nation where marginalized children flourish, leaders prioritize their well-being, and communities wield the power to ensure they thrive. Enacting and implementing the provisions of the American Family Act will be important steps toward achieving that vision,” said the Rev. Dr. Starsky Wilson, President and CEO of the Children’s Defense Fund. “Ending child poverty in America is a moral obligation that we must pursue with urgency to improve child well-being and address racial injustice.”

The American Family Act would expand and improve the CTC based on the latest research about what works to improve outcomes for children. According to estimates from Columbia University, the CTC now lifts approximately one-sixth of all previously poor children above the poverty line. However, one-third of all children do not have access to the full benefit because they are in families who earn too little to get the full CTC. This group disproportionately includes families led by single mothers, rural families, and families with young children.

The bill is estimated to cut child poverty by nearly 45%, cut Asian American and Pacific Islander child poverty by 37.0%, cut Black child poverty by 52.4%, cut Hispanic child poverty by 45.4%, cut Native American child poverty by 61.5%, and cut child poverty in Washington state by 40.3%. In addition to drastically cutting child poverty, the American Family Act provides middle class families with additional help as well.

Specifically, the legislation would:

  • Increase the Maximum Child Tax Credit and Pay Benefits Monthly for All Children under 17. The bill would expand the CTC to $250 per month ($3,000 per year) for children 6-17 and $300 per month ($3,600 per year) for children under 6, up from the current maximum of $2,000 per year.
  • Make Credit Fully Refundable. The bill would make the CTC fully refundable, meaning that all low-income families would receive the full credit for each child. The current CTC only begins to phase-in after a taxpayer has earned $2,500 of income and at a rate of 15 cents for every dollar of additional income. In addition, only $1,400 of the $2,000 credit is refundable.
  • Benefit the Middle Class. The bill would provide a tax credit for all individuals with children who earn less than $150,000 per year and all married couples with children who earn less than $200,000 per year.
  • Index the Credit for Inflation. The bill would index the credit to inflation (rounding to the nearest $50) to preserve the value of the credit going forward. The current CTC is not indexed for inflation.

The American Family Act was introduced with 154 original House cosponsors indicating a broad show of support across the Democratic Caucus. The full text of the bill is here and a summary of the bill can be found here.