Without Tax Credit, 3.7 Million Kids Sink Into Poverty

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That’s how many children fell below the poverty line because the government’s expansion of the child tax credit expired in December, a new study shows.

The 3.7 million children reflect a 4.9 percentage point jump in child poverty in just one month, according to a study released this week by researchers at Columbia University’s Center on Poverty and Social Policy. The poverty rate went from 12.1% in December to 17% in January because the credit—expanded last year as part of a pandemic relief bill—reverted to its usual rules, the study found. Latino and Black children experienced even bigger increases in poverty rates, at 7.1 and 5.9 percentage points, respectively. 

In an effort to reduce child poverty amid the pandemic’s economic upheavals, the American Rescue Plan boosted the credit to a per-child maximum of $3,600 from $2,000, expanded eligibility to low or no income families, and instituted automatic monthly payments from the IRS. Many parents had spent the extra money on food, causing a 26% reduction in child hunger, according to one analysis.

Democrats tried to extend the expanded credit as part of President Joe Biden’s Build Back Better bill, but the $1.7 trillion spending package was sunk by opposition from Republicans, and, pivotally, by Democratic Sen. Joe Manchin of West Virginia, who cited concerns about inflation and the national debt. Manchin especially criticized the child tax component of the bill, wondering why it didn’t come with a work requirement.

Independent Sen. Bernie Sanders of Vermont, a proponent of the Build Back Better bill, called the January spike in child poverty “morally obscene” in a Twitter post Thursday.

The government usually calculates the overall child poverty rate just once a year, but the Columbia researchers used data from the Current Population Survey, a monthly survey conducted by the Census Bureau, to estimate a month-to-month rate.

Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com.

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