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**FEBRUARY 18, 2022**
Kuttner on TAP
Save the Child Tax Credit
It's scandalous that Congress let it lapse.
When the Child Tax Credit lapsed in January, 3.7 million more children
reverted to poverty
,
according to authoritative research by the Columbia University Center on
Poverty and Social Policy. That's a 41 percent increase-and a
national disgrace. For Black kids, the increase was even more dramatic.
Congress enacted the nearly universal Child Tax Credit of up to $3,600
per year per child as part of the March 2021 American Rescue Plan Act
(ARPA). The effect was revolutionary-a decline in the child poverty
rate of almost half.
The legislation authorized these payments, in effect a universal basic
income for families with kids, for only one year, to hold down the total
budget impact. The political wager was that the program would prove so
popular that it would be extended as part of what became the 2022
reconciliation bill, known as Build Back Better. Last summer, as that
bill was taking shape, the debate between progressives and centrists was
whether to make the credit permanent or just extend it for five years.
But that was before Joe Manchin and Kyrsten Sinema went rogue. Now the
question is whether any form of the Child Tax Credit will survive in
what remains of Build Back Better.
Manchin has spoken of supporting it, but with strict income limits.
That's not a good idea because it creates what are called "cliff
effects"-as your earned income rises, you fall off the cliff and lose
benefits. It also makes the program less popular with middle-class
voters.
The Child Tax Credit was the most potent new anti-poverty program since
Medicaid. It is also perfectly efficient-no middlemen, no application
hassles-the government sends you money, just like a Social Security
check. And just like Social Security, the benefits are taxable, so that
takes care of the problem of "leakage" to the upper middle class.
Critics will long debate whether it was a blunder not to lock in a
longer-term Child Tax Credit last March, when the recession was still
raging and when Democrats had the party discipline and the votes. But if
the Democrats can't make the case for saving the credit and make its
continuation good politics, the party is not worthy of the name.
****
~ ROBERT KUTTNER
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**Robert Kuttner's latest book is**
The Stakes: 2020 and the Survival of American Democracy
.
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