Additional help from child tax credit ends, just as Covid resurfaces

This does not happen. The polls found the public roughly divided on whether the program should be extended, with opinions divided along...

This does not happen. The polls found the public roughly divided on whether the program should be extended, with opinions divided along partisan and generational lines. And the expanded tax credit failed to convince the person whose opinion mattered most: West Virginia Democrat Senator Joe Manchin III, who expressed concerns about the cost and structure of the program in his decision to oppose Mr. Biden’s climate, fiscal and social policy bill. The bill, known as the Build Back Better Act, cannot be introduced in the equally divided Senate without the support of Mr Manchin.

For supporters of family allowances, the lack of an extension is all the more frustrating since, according to most analyzes, the program itself has been a remarkable success. Columbia University researchers estimate that payments saved 3.8 million children from poverty in November, a reduction of almost 30 percent in the child poverty rate. Other studies have shown that the benefit hunger reduction, decrease in financial stress among recipients and an increase in overall consumer spending, especially in the rural states that received the most money per capita.

Last spring, Congress expanded the existing child tax credit in three ways. First, it made the benefit more generous, offering up to $ 3,600 per child, up from $ 2,000. Second, he began to pay off the loan in monthly installments, usually deposited directly into recipients’ bank accounts, turning the annual windfall into something closer to the child allowances common in Europe.

Finally, the bill made full benefits available to millions of people who previously had not been able to take full advantage of the credit because they earned too little to qualify. Poverty experts say the change, known in tax jargon as “full refundability,” was particularly significant because without it, a third of the children – half of all black and Hispanic children and 70 percent of children raised by single mothers – have not received full credit. Mr Biden’s plan would have made this provision permanent.

“What we saw with the child tax credit was a political success that was unfolding, but it’s an achievement that we risk stopping just as it started,” said Megan Curran, director of policy at Columbia’s Center. on poverty and social policy. “The weight of proof is clear here in terms of what the policy does. This reduces child poverty and food shortages.

But the expanded tax credit doesn’t just go to the poor. Couples earning up to $ 150,000 a year could receive the full benefit of $ 3,600 – $ 3,000 for children 6 and over – and even the wealthiest families qualify for the initial credit of 2 $ 000. Critics of the policy, including Mr Manchin, have argued that it makes little sense to help relatively well-off families. Many proponents of credit say they would willingly limit its availability to richer households in exchange for maintaining it for poorer ones.

Mr Manchin also publicly questioned the wisdom of unconditional cash payments and privately expressed concerns that recipients might spend the money on opioids, comments that were first reported by The Wall Street Journal and confirmed by someone familiar with the discussion. But a Census Bureau survey found that most beneficiaries used the money to buy food, clothing, or other essentials, and many saved some of the money or paid back their expenses. debts. Other surveys have found similar results.

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Newsrust - US Top News: Additional help from child tax credit ends, just as Covid resurfaces
Additional help from child tax credit ends, just as Covid resurfaces
Newsrust - US Top News
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