Center for American Progress

The Senate Must Act Now and Pass the Build Back Better Act Before the Expanded Child Tax Credit Expires
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The Senate Must Act Now and Pass the Build Back Better Act Before the Expanded Child Tax Credit Expires

If the Senate fails to pass the Build Back Better Act by the end of the year, the expanded Child Tax Credit will expire and millions of families will be pushed back into poverty.

A partial lunar eclipse behind the dome of the Capitol building
The moon, with a partial lunar eclipse, is seen behind the Statue of Freedom on the dome of Capitol Hill, November 2021. (Getty/Andrew Caballero-Reynolds)

Across the country, the pandemic’s economic crisis has hit low-income families and people in poverty particularly hard, with Black families and other families of color, immigrants, and women disproportionately bearing the brunt. Federal programs signed into law by President Joe Biden—such as the expanded child tax credit (CTC)—have provided lifelines for millions of families as the economy continues to recover.

Nakitta Long and her family can attest from personal experience how crucial these policies are. In spring 2020, Long was finishing her second year as a temp worker in North Carolina’s automotive industry, waiting for a long-promised permanent position that never materialized. When COVID-19 struck, she was immediately laid off.

Federal investments specifically targeted to help low-income families, like the expanded CTC, kept Long—a mother to four children, two of whom are dependents— from spiraling deeper into poverty while the economic crisis continued.

“There are so many people that struggle – we’re not trying to buy Bentleys. Being able to put food on the table, living in a safe, stable home, these are basic needs and we cannot enjoy our families [without them],” Long said.

There are so many people that struggle - we’re not trying to buy Bentleys. Being able to put food on the table, living in a safe, stable home, these are basic needs and we cannot enjoy our families [without them]. Nakitta Long

Despite its remarkable success for millions of families like the Longs, the expanded CTC is poised to expire in a matter of days, potentially pushing as many as 9.9 million children below the federal poverty line or deeper into poverty. The Senate can avert this catastrophe by passing the Build Back Better Act before the end of the year, which was approved by the House of Representatives in November. In doing so, Congress has an historic opportunity to build on the most significant effort to cut child poverty seen in generations.

Since the American Rescue Plan increased the CTC and fully included the lowest-income households, monthly payments of as much as $300 per child have directly benefited the families of more than 65 million children. In October alone, the monthly CTC payments kept 3.6 million children out of poverty.

Since monthly CTC payments began in July, the historic program has slashed poverty and food insecurity while helping families afford basic necessities such as housing, utilities, school expenses, and much more—all of which have increased in cost over decades while wages have stagnated. After just one payment, food insecurity in households with children dropped by 24 percent.

24%

After just one payment, food insecurity in households with children dropped by 24 percent.

Recent research from the University of Washington, St. Louis and Appalachian State University found that more than 50 percent of households earning less than $50,000 reported using the CTC on food and bills. Nearly 38 percent of these households used the monthly payments to cover rent or mortgage.

Even with the federal aid, many of these basic necessities were often out of reach for Long’s family. After being laid off in the pandemic, Long says she was taken to eviction court by her landlord. Even though Long contested and won her eviction proceedings, the landlord still refused to renew her lease. The inclusion of an eviction court appearance on her record was used by other potential landlords to deny her application for housing. As her lease ended, Long found herself, her 5-year-old son, and her 17-year-old daughter homeless for three months, bouncing from relatives’ homes to hotels across Winston-Salem, North Carolina.

“It was chaos [across the country] and we were caught up in that chaos,” Long said. “Not being able to hang your clothes in the closet, living out of storage bins. It was one of the most dehumanizing experiences. I can’t put it into words.”

Because the expanded CTC is a form of direct cash assistance distributed via the tax code, it involves fewer of the administrative hurdles that typically complicate state-administered relief programs, such as the Supplemental Nutrition Assistance Program (SNAP).

Instead, CTC payments flow directly from the federal government to the bank accounts of individual recipients each month. This means Long gets to decide how the funds should be used, be it on funds to cover after school programs for her youngest son or to restock the pantry ahead of the holidays.

“The cash component is beneficial because every month your needs change. You know exactly what your family needs moment to moment and month to month. [The CTC] is a very fluid resource that lets families decide,” Long said.

Parents in New Hampshire and West Virginia report similar experiences. Far from being a luxury for these families, the CTC payments make a difference, allowing families to purchase fresh produce to avoid going hungry or ensuring they have a reliable car to drive to work instead of missing a day’s work and seeing a tight budget shrink even further.

Before the CTC expanded, Christina Darling would regularly skip meals so that her two sons, ages 10 and 4, would have enough to eat. Whatever fresh produce was in the house came from the local food bank in Nashua, New Hampshire. Often that produce was nearing its expiration and needed to be consumed within 48 hours before it spoiled. “Food is something we’ve struggled with since day one. It’s a necessity, not just a commodity,” Darling said. “When you don’t have money, you’re [choosing between] canned food or fresh produce and those pennies matter.”

In Kingwood, West Virginia, Stormy Johnson cares for her three children with only a tiny margin for error. Before the monthly CTC payments, she often had just $50 remaining for food, hygiene supplies, and gas after she finished paying for rent, insurance, and other basic needs. In her career as a school support specialist, Johnson works with families who struggle to afford the same basic necessities she struggles to afford herself. With the CTC, she was finally able to afford a payment on a more reliable car and secured reliable transportation to the school. “If I don’t have a car, that means I can’t do this job. And that means I can’t provide for myself or lend my expertise to those families dealing with similar issues,” Johnson said. “If [the CTC payments] stop after December, I don’t know what I’ll do. I guess I’ll go without eating for days again, because I don’t qualify for SNAP. I’m not going to let my kids go hungry. But I need to take care of myself to be able to take care of my kids, and it feels like I’m in a vicious, horrible cycle that’s being decided by someone who isn’t even affected by [the policy].”

If [the CTC payments] stop after December, I don’t know what I'll do. I guess I'll go without eating for days again, because I don't qualify for SNAP. I’m not going to let my kids go hungry. Stormy Johnson

The newly expanded and fully refundable CTC payments have been an historic success, but decades of economic policies that have prioritized growing the wealth of the country’s richest people at the expense of poor and low-income families cannot be reversed solely with the six checks families have received thus far. The Build Back Better Act contains a set of policies aimed at reversing that trend, including paid family and medical leave, child care subsidies, and prescription drug price reforms—all paid for by making the wealthiest Americans and largest corporations pay more of their fair share in taxes. The extension of the CTC represents one of the most direct ways for Congress to prioritize building stability for families like the Longs, Darlings, and Johnsons.

Conclusion

With only days left before the expanded CTC expires, the Senate has the opportunity to make meaningful progress in cutting child poverty in America by passing the Build Back Better Act. “We all understand that there’s this stigma that poor people are poor because they don’t work hard enough or whatever else,” Darling said. “But the reality is so many of us are working full time in jobs that are essential and we’re trying to make ends meet. This is not a matter of frivolity. This is money that brings us from surviving to thriving. Without [The expanded CTC], we’re stuck with this poverty for generations.”

Like the Longs, Darlings, and Johnsons, millions of families across America have stories to share of how the economic crisis has inflicted pain on them and their loved ones. Congress has a moral and economic obligation to end poverty, and extending the expanded CTC payments is one essential tool in the efforts to do so. If Congress fails to pass the Build Back Better Act before the end of the year, this lifeline will end and millions more families will be pushed back into poverty.

David Ballard is the campaign and communications manager for the Poverty to Prosperity Program at the Center for American Progress. Arohi Pathak is the policy director for the Poverty to Prosperity Program at the Center for American Progress.

Authors’ note: The CTC recipients quoted in this story were recruited by the Center for American Progress Action Fund to participate in an advocacy campaign in support of extending the Child Tax Credit expansion. The interviews were conducted via phone by one of the authors on December 8 and 9 and have been lightly edited for length and clarity. All participants consented to having their experiences and quotes included in this column.

The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.

Authors

David Ballard

Inclusive Growth Policy Manager

Arohi Pathak

Director, Policy

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