New census data adds to the growing body of evidence showing that the expanded Child Tax Credit (CTC) helped reduce childhood poverty. In 2021, child poverty fell to a record low of 5.2%, a 46% decline since 2021. Yet, despite this success, Congress failed to extend the CTC, leaving families without this much-needed support.
In fact, the end of monthly CTC payments created significant hardship for many, according to a new survey* of families making under $75,000 a year (ideas42 supported this survey work as part of our commitment to understanding the benefits of the CTC). Sixty percent of families stated that it has been more difficult for them to pay their expenses since the monthly payments expired in December 2021. These families reported they had trouble:
- Affording food and groceries (66%)
- Paying bills (65%)
- Buying clothing and shoes (49%)
- Paying their rent or mortgage (40%)
More than half of the families who earned under $25,000 reported experiencing food hardships, such as difficulty affording more or higher quality foods, or visiting food banks or food pantries.
Unsurprisingly, parents who had received monthly payments in 2021 reported increased financial stress since the monthly payments ended. By reducing scarcity and providing no-strings-attached monthly payments, the expanded CTC created much-needed slack for families with low- and moderate incomes. It was especially important for those earning the least. Taking the payments away left many families struggling and experiencing increased levels of stress, as they had to worry more about how to pay their bills or put food on the table.
There is still time for Congress to right this wrong and extend the expanded CTC. In recent days, there has been a renewed push from Democratic Congressmembers and the Biden Administration. The CTC is a behaviorally informed policy with plenty of evidence demonstrating that it reduced child poverty. Americans across the political spectrum overwhelmingly support the CTC. Congress must not let 2022 end without extending the CTC.
*The Center for Law and Social Policy collaborated with IPSOS to conduct these surveys, in partnership with University of California, Berkeley, the Center for the Study of Social Policy, the Children’s Defense Fund, ideas42, the National Women’s Law Center, Prosperity Now, UnidosUS, and the Urban-Brookings Tax Policy Center.