‘Horrifying’: 3.7 million children re-enter poverty after Biden’s child tax credit expired

Number of US children in poverty spiked from roughly 8.9 million in December to 12.6 million in January

Families rallied in Washington DC in December 2021 to urge Congress to extend a tax credit that lifted millions of children out of poverty. (Getty Images)

More than 3.7 million American children re-entered poverty after the expiration of monthly payments through a pandemic-era federal programme that expired at the end of 2021.

The nation’s child poverty rate rose from 12 per cent at the end of 2021 to 17 per cent last month, effectively erasing the gains from an expanded Child Tax Credit programme introduced by President Joe Biden, according to a report from the Center on Poverty and Social Policy at Columbia University.

The centre found that an additional 3.7 million children are now living in poverty relative to the end of December, with Black and Latino children making up the largest increases, at 5.9 per cent and 7.1 per cent, respectively.

Last March, Congressional Democrats approved an extension of the Child Tax Credit from July through December, boosting monthly payments of $250 to families with children aged 6 to 17 and $300 for families with children under 6.

More than 61 million children in roughly 36 million households received payments through December, making dramatic cuts to the nation’s childhood poverty rate, food insecurity and childhood hunger, according to federal data.

“We received a glimpse over the last six months of what that might do for child poverty rates and also food hardship among families with children,” report co-author Zach Parolin tells The Independent.

“In its absence, what we’re seeing is a quick spike in the childhood poverty rate,” he said. “The benefit that is doing the most good to reduce that need over the last seven months is gone. I think we can expect to see that is going to generate a lot of pain for low-income families with children in particular.”

By October, child poverty was slashed by as much as 28 per cent, marking a nearly 5 per cent reduction, keeping 3.6 million children out of poverty and reaching more than 61 million children overall, according to the centre.

If those benefits were to continue permanently, child poverty would be reduced by as much as 40 per cent within a typical year. Instead, the number of US children in poverty spiked from roughly 8.9 million in December to 12.6 million in January.

Families will receive another boost this year after filing their taxes, which will pay out a second half of the tax credit’s relief.

“After that, we can expect to see a return to relatively high and stably high poverty rates, probably from May through the rest of the year, absent any major labour market improvements or policy improvements,” according to Mr Parolin.

The largest percentage point increases in poverty rates were felt among Latino and Black families, with roughly one in four Black children and roughly one in four Latino children in families with incomes below the poverty line, according to Thursday’s report.

“If we’re essentially going back to the welfare state that existed before the pandemic started, with a labour market that’s not yet recovered from the pandemic, these racial and ethnic inequalities that were stark prior to Covid-19 … are going to remain high and potentially get worse, depending on what the labour market recovery looks like,” Mr Parolin said.

Within the first month of the programme, roughly 47 per cent of beneficiaries reported spending payments on food, and 17 per cent with children under age 5 spent payments on childcare, the US Census Bureau reported.

The overwhelming majority of families with annual incomes under $35,000 spent some or all of their new monthly payments on basic necessities, including housing, food, clothing, utilities and education, according to the progressive thinktank Center on Budget and Policy Priorities.

With that first round of payments, food insecurity in families with children dropped by as much as 24 per cent, according to the US Department of Treasury.

Congressional efforts to revive the programme have stalled, after US Democratic Senator Joe Manchin balked at Build Back Better legislation that included the previous credit.

He reportedly told colleagues that he believed families would “waste monthly child tax credit payments on drugs instead of providing for their children,” according to HuffPost.

“One US Senator ‘heard stories’ about people allegedly using the Child Tax Credit ‘for drugs’ without any evidence or data to back it up,” US Rep Alexandria Ocasio-Cortez said on Thursday. “He then used that as justification to nuke the entire national program, causing millions of kids to fall into poverty in weeks. Horrifying.”

She added: “Meanwhile the press talks about it like it’s some beltway drama without ever showing the people who are sleeping in bubble jackets with no heat or the kids going hungry waiting for some guy in a yacht to decide if they are fully human or not,” she said on Twitter. “It’s just shameful, all of it.”