After taking office, United States President Joe Biden increased Child Tax Credit from $2,000 to $3,000 or up to $3,600 for those eligible who have children under six. The program gives parents who make $400,000 and under direct payments of $250 to $300 monthly from July through December this year.
In a statement after the proposal for the Child Tax Credit increase, Biden said, “If we get this done, it will cut child poverty in half.” The statements were made because, per the data, one in seven children in America lives in poverty. The bill was passed and signed into law in March, and the benefits were distributed by July.
The question now is if the increased Child Tax Credit positively affected cutting down child poverty in half. A study by the Poverty Center at Columbia University found that after parents received direct deposits, it immediately affected child poverty rates.
The Poverty Center shared in a study, “Using our innovative approach to tracking monthly poverty rates, we project that ongoing COVID relief efforts continue to have a sizable effect on reducing child poverty keeping 6 million children from poverty in July 2021 alone (a reduction of more than 40 percent).”
Researchers went on to say that they believe that as the rollout for the Child Tax Credit continues, an even greater child poverty reduction has the potential to be achieved. If this happens, the COVID-19 relief package targeting children could lead to a 52 percent reduction in child poverty.
With these findings, Biden and Democrats in Congress are pushing to expand this program until 2025. Just this September, House Democrats pushed for not only to extend the increase but also to make it permanent.
Many were pleased with Biden and House Democrats’ move, one of which is a pro-family advocacy organization called MomsRising.
The organization, through their executive director Kristin Rowe-Finkbeiner, shared in a statement with CNBC, “The child tax credit expansion has made historic gains for our families and our economy in 2021, lifting 50% of all children out of poverty and boosting the economy.” A group of 450 economists also signed an open letter last week supporting the Child Tax Credit program’s extension. Jacob Goldin, an assistant professor at Stanford Law School, also shared with CNBC, “There’s just very, very strong evidence that providing extra financial assistance to kids growing up in low-income households yields big benefits in their lives.”
Some of the big benefits were outlined by Poverty Center. These include decreasing infant mortality, improving the health and life expectancy of poor children, and increasing future productivity.
As to where the Child Tax Credit benefits are going, a survey from the Census Bureau found that families receiving such deposits are spending the money on clothing, food, housing, and utilities.
Also Read: Monthly Child Tax Credit Payments Set To End in Three Months Might Be Extended: Read More
