Child poverty remains high due to expiry of child tax credit

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  • Child poverty remains high with the end of the enhanced child tax credit.
  • A new analysis indicates that child poverty is 38% higher than in December 2021.
  • Manchin has sided with the GOP to oppose the perk, and Congress won’t be renewing it anytime soon.

The child poverty rate remained significantly high in February compared to December 2021, the end date of the expanded child tax credit.

New search from the Center on Poverty and Social Policy at Columbia University released Wednesday found that 3.4 million more children lived in poverty in February than in December. This represents a 38% increase over the level reached at the end of last year, an increase of 4.6 percentage points.

The child poverty rate was 16.7% last month compared to 17.0% in January. It represents a modest month-over-month drop after child poverty skyrocketed due to the end of the temporary prepayment program. In December 2021, it was 12.1%.

The child tax credit was extended for a year as part of President Joe Biden’s stimulus bill. It widened its scope to families not required to pay taxes and transformed it for the first time into a monthly child allowance. Families could receive an annualized payment of $3,000 per child aged 6 to 17 and $3,600 for each child aged 5 and under. The amount of the benefit was previously $2,000.

The monthly vetting program has met with resistance from Republicans and Sen. Joe Manchin, a conservative Democrat from West Virginia. Manchin’s opposition to the provision contributed to the demise of the House-approved Build Back Better package carrying the bulk of Biden’s health, climate and education agenda.

Without his vote, Democrats cannot bypass Republicans and approve the package on their own in the Senate 50-50. There are few signs that Congress will revive him anytime soon and Biden has already admitted he may fail to secure his renewal if Democrats try to revive their spending plans.

Although Republicans blocked the program as part of their opposition to Biden’s economic agenda, some do not feel blame.

“When I look at poverty, I would like to look before government payments,” Utah Sen. Mitt Romney told Insider on Tuesday. “We can make everyone rich if we give everyone a billion dollars, which of course we’re not going to do.”

He added that he wanted to find a way to reduce child poverty “not just asking the government to create cheques”.

A separate study indicated that establishing a permanent enhanced child tax credit would result in a 1,000% return on investment, reported Juliana Kaplan of Insider. The program would provide $982 billion in social benefits in the form of better health and stronger long-term incomes, far exceeding a $97 billion price tag, according to the newspaper.

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