Child tax credit payments are a ‘boost’ for families, but some argue their expansion should depend on results


Colorado Sen. Michael Bennet (right) joined Senate Majority Leader Chuck Schumer of New York and other Democrats on July 15 to mark the distribution of the first monthly child tax credit payments. (Getty Images)

JEssica Hudson, a political science student at San Francisco State University, was balancing school and work when she had to leave the two to stay home with her two children during distance learning last year.

Then the whole family, including Hudson’s partner, fell ill with COVID-19. They found themselves spending too much money on a laundry service because they couldn’t go to the laundromat and order take out food because they were too weak to cook.

Even when she was able to muster the strength to help Emerson, 10, with his homework, Hudson said that “teaching him at home was way outside the realm of the things I’m good at.” But now, the $ 500 she receives each month in federal child tax credit payments allows her son to take an after-school program three days a week and Hudson to return to class.

“He will be able to play with other children again,” she said. “And he’s going to get some professional help with his homework.”

Jessica Hudson, a political science student at San Francisco State University, uses the child tax credit to cover the cost of her son Emerson’s after-school program. (Jessica Hudson)

Monthly deposits, which began in July, are providing a temporary boost to the bank accounts of most families across the country – following the US Congress’ $ 1.9 trillion bailout passed in March.. Benefiting approximately 61 million children, the legislation increased the annual credit from $ 2,000 to $ 3,000, or $ 3,600 for children under 6. spectacle. Making the payments permanent is a top priority for Progressive Democrats, while President Joe Biden has proposed a more limited extension. Regardless, politics is at the center of the left’s efforts to pass a major reconciliation bill against the Republican opposition.

“In my mind, there is no more important education reform you could pass than to make the Child Tax Credit permanent,” said Senator Michael Bennet of Colorado. The former Denver public schools superintendent is one of six Congressional Democrats pushing for the payments to continue.

But West Virginia Sen. Joe Manchin, a Democrat who has said he will not vote for a $ 3.5 trillion package, wonders if the extension should go ahead without any requirement for recipients to work.

The bill maintains the credit for an additional four years and makes it permanently repayable, meaning that even if parents earn too little to pay federal taxes, they will still benefit from the credit. But that was when Democrats were determined to pass a $ 3.5 trillion package. House Speaker Nancy Pelosi conceded that the final figure would likely be smaller.

The impact of the tax credit on families was of particular interest to Phil Fisher, professor of psychology at the University of Oregon. Shortly after the start of the pandemic, he began to determine to what extent financial constraints, the disappearance of child care and family isolation led to increased parental anxiety and greater irritability in children. Families – especially low-income, single-parent, black and Hispanic ones – simply weren’t sure if they would be able to cover their shelter, food, and other basic needs month-to-month. This unpredictability only contributed to the stress.

“If you’re worried about how much food you’re going to have on your table, if you’re worried about being kicked out, it’s harder to cater to your kids,” Fisher said. “These payments are a big boost for families in need.”

The effects of economic hardship on young children go beyond crying spells or tantrums – and could add to the challenges educators face when these children enter school. Children born during the pandemic have poorer language, motor and cognitive skills than a pre-pandemic sample, according to a recent study by researchers at Brown University and Rhode Island Hospital.

“Work-from-home and shelter-in-place orders, for example, as well as closed daycares, nurseries and preschools may have dramatically changed the amount and quality of interaction and stimulation from parents, caregivers. and teacher-children, ”they wrote. , but added that the development of young children in better-off households was less affected.

The findings have yet to be reviewed by other researchers, but the findings add to findings from a survey of Massachusetts parents with young children. Fifty-eight percent said the pandemic had negatively impacted the educational development of their young children.

“To work, to be married or to abuse money”

Measuring how families spent the extra money – and whether a guaranteed income has actually improved children’s well-being and learning ability – are key policy questions for policymakers and researchers.

That is why many are waiting for the results of a timely study that aims to answer these questions. Baby’s First Years, a $ 17 million project launched in 2018, does not focus specifically on the child tax credit, but rather examines the impact of a similar, unrestricted monthly payment, which families will stop making. receive when the children are 3 and 4 years old. month. Most have just turned 3.

The researchers recruited 1,000 low-income mothers with infants, gave them debit cards, and randomly selected them to receive either $ 333 or $ 20 each month until the children were of going age. kindergarten. Researchers monitor children’s brain function and development to measure the impact of a poverty reduction program during the early years.

The first results will be published later this fall. Researchers are also examining whether mothers still have jobs and whether they use the extra income to buy drugs or alcohol – questions that lead researcher Greg Duncan, professor of education at the University of California at Irvine. , has been waiting for decades. working in this area.

“You never see the political debate focus on anything other than whether the mother is working, married or abusing money,” he said. “It’s never about the child.

In fact, restrictions on who should be eligible for such payments were among the stipulations of Republicans to extend credit. Missouri Senator Josh Hawley’s plan would double the amount available for married couples – $ 12,000 a year, compared to $ 6,000 for single parents. Like Manchin, the Senses. Marco Rubio from Florida and Mike Lee from Utah say parents would have to work to receive the credit. Additionally, some Republicans have argued that the rush to set up monthly payments could result in fraud or inappropriate payments to those who are not eligible.

But Fisher said the pandemic makes it harder to determine whether some families are more deserving than others. His research shows that many families “overflowed very quickly” because they had no savings or were unable to get a credit card.

“The biggest difference”

Initial surveys show that most parents used child tax credit funds to cover basic needs, such as food, utilities, and rent. But data from ParentsTogether Action, a national advocacy group, showed that more than a quarter of the 1,200 parents who responded spent the money on enriching their children and 12% spent it on the enrichment of their children. ‘education.

After a year of turning down her daughters’ requests, Denver’s Christa Jimenez said the extra $ 500 a month allowed her to say yes to things like new art supplies and a streaming service so they could watch shows. PBS in Spanish.

The pandemic has been a “direct period of non-parentage,” she said. “No, you can’t see Grandma. Now you can’t go to the park. No to extracurricular activities.

The Jimenez family used the tax credit payments to replenish their savings and for “fun things” like art supplies and new clothes for their daughters. (Courtesy of Christa Jimenez)

She isn’t sure if her children’s school will offer enrichment programs this fall, like a chess club and choir, but that’s another way she hopes to use the funds. Federal relief bills included three rounds of stimulus payments for families – totaling $ 3,200. But Jimenez, who saw her job as a blogger and small business owner dry up last year, said the child tax credit had been even more helpful.

“It made the biggest difference to our family,” she said. “It’s monthly, so you can schedule it. “

But for how long ?

The current proposal extends the credit until 2025, which would cost $ 450 billion, according to calculations by the nonprofit Tax Foundation.

Another proposal would extend it for three years. But Bennett said making the increase permanent would impact millions of children and halve the country’s 16 percent child poverty rate.

“Our job as promoters is to push as hard as possible to extend it for as long as possible,” Bennett said.

Democrats saw a chance for a bipartisan approach to the issue earlier this year when Republican Senator Mitt Romney of Utah proposed a Family Safety Act that would also send monthly payments to families. But Bennet said that until the GOP is prepared to reverse former President Donald Trump’s tax cuts in 2017, there is no room for negotiation.

That could change in two years if Republicans take control of the House, said Katharine Stevens, resident researcher at the conservative American Enterprise Institute. She and her colleague Matt Weidinger have their own proposal that would allow parents to bank future tax credits up front – up to $ 15,000 a year – so they can either work less for the first few years. of their child, or afford quality childcare services.

She called the Democrats’ plan “short-sighted” and recommended that they at least assess whether children’s lives are improving under the policy before extending the increase indefinitely.

“Money doesn’t improve early development,” she said. “What money can do is help create the conditions that support early development.”

This article was published in partnership with The 74. Subscribe to the 74 newsletter here.

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