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Vox: Biden’s biggest anti-poverty plan is now a reality. Here’s how he can make it even better.
By Dylan Matthews
Thursday, July 15, 2021, could wind up being one of the most important days in the history of American anti-poverty policy.
On this day, most parents in the United States began receiving monthly checks of up to $300 per child — no strings attached.
What’s technically happening: The child tax credit (CTC), a policy that has existed in some form since 1997, was expanded with the enactment of President Joe Biden’s American Rescue Plan, both in its size (going from $2,000 per child per year to $3,000 for children ages 6 through 17, and $3,600 for children under 6) and in its reach.
But calling this a “tax credit expansion” makes it seem less momentous than it is. It’s really a one-year test of an idea known as a child allowance, a policy that has been adopted in most rich countries besides the United States.
We know from the experiences of peer countries from Great Britain to Spain to Germany to Canada that child allowances can slash child poverty dramatically, and, as a consequence of reducing poverty, improve child health, increase parents’ time with their kids, and perhaps even raise incomes and extend life spans down the road for children who benefited.The key to this policy’s success is that all poor families are eligible. Before this year, many poor children were deliberately excluded from the CTC on the theory that doing so would encourage their parents to work. Biden, as part of his stimulus plan and at the urging of poverty and child welfare advocates, signed into law an expansion to all poor families for tax year 2021...
The next step for policymakers: Making the child allowance permanent
Even more important over the long run than reaching the poorest households is making sure the child tax credit does not expire after a year.
The Biden CTC expansion is modeled after a bill embraced by most Democratic members of the House and Senate in 2019 known as the American Family Act. That act would have expanded the CTC to the same amounts as Biden ($3,000 per year for kids ages 6 to 17, $3,600 per year for under 6), made the credit available to people with no income (known as making it “fully refundable”), and paid it out monthly. All of that is in Biden’s plan.
But the AFA was a permanent policy, whereas Biden only implemented these improvements for one year.
Members of Congress behind the AFA are pushing hard to make these increases permanent as soon as possible. In a statement in April, its champions in the Senate (Michael Bennet (D-CO), Sherrod Brown (D-OH), and Cory Booker (D-NJ)) and the House (Rosa DeLauro (D-CT), Suzan DelBene (D-WA), and Ritchie Torres (D-NY)) declared, “Expansion of the Child Tax Credit is the most significant policy to come out of Washington in generations, and Congress has an historic opportunity to provide a lifeline to the middle class and to cut child poverty in half on a permanent basis. … Permanent expansion of the CTC will continue to be our priority.”
Bennet has said he will “fight like hell” for a permanent extension, and Senate Finance Chair Ron Wyden (D-OR) and House Ways and Means Chair Richard Neal (D-MA) are on board to make the policy permanent.
The Biden administration’s position has been subtler. Expanding the child tax credit costs money, and to make it permanent under Senate budget reconciliation rules (which enable passage with just 50 Democrats, rather than requiring 10 Republicans to get on board to break a filibuster), it needs to be offset with tax hikes or spending cuts elsewhere in the budget.
Click here to read the full article on Vox.