Update on the Child Tax Credit: Without the Stimulus Funds, Child Poverty Might Rise by 17% This Month
For millions of American families, the American Rescue Plan boosted the child tax credit. According to a new analysis, the elimination of advance monthly payments might lead the child poverty rate in the United States to rise by 17% this month.
According to the Columbia University Center on Poverty and Social Policy’s newest data, the child tax credit reached nearly 60 million children in December, keeping almost 3.7 million children out of poverty for the month. According to the report, the child tax credit reduced monthly child poverty by nearly 30%.
According to the report, the monthly child poverty rate might rise from 12.1 percent in December 2021 to at least 17.1 percent in January, the highest percentage since December 2020. The monthly child poverty rate was 15.8 percent in June 2021, the month before the advance monthly payments were implemented.
“Since July, the Child Tax Credit’s monthly payments have helped millions of families pay for necessities like food, daycare, and other household needs as they occur,” said Treasury Secretary Janet L. Yellen. “Tens of millions of children’s lives have been enhanced across the country because families have gotten tax relief when they most needed it.”
Data from the Census Bureau’s Household Pulse Survey found that 55 percent of middle-income families spent their payments on food, more than 26% on clothing, and 23% on school and after-school costs within weeks of the first payment in July.
President Joe Biden’s Build Back Better Plan, which included an extension of the increased child tax credit, ran into resistance from Senator Joe Manchin (D-W.Va.), whose support was required for the bill to succeed.