Child Poverty Rate Soars as Tax Credit Expires

By Yuval Rosenberg

Welcome to the holiday weekend! The winds of war are
sadly still swirling in Ukraine, but you can distract yourself for
just a moment by taking a peek at this giant,
record-setting strawberry. Here’s what else is
going on.

Child Poverty Rate Soars as Expanded Tax Credit Expires

Millions of children in the U.S. fell into poverty in January
after a federal program providing expanded child tax credits
expired, according to a
new analysis by the Center on Poverty and Social
Policy at Columbia University.

About 3.7 million children became impoverished between December
2021 and January 2022, the study found, pushing the child poverty
rate from 12.1% to 17% — a 41% increase. Overall, the number of
children in poverty rose from 8.9 million in December 2021 to 12.6
million last month.

The expanded child tax credit program that ended in December was
part of the $1.9 trillion American Rescue Plan signed into law by
President Joe Biden last March. The temporary program increased the
value of the child tax credit by $250 to $300 per month per child
up to the age of 17, and made the credit payable on a monthly basis
for the final six months of 2021. Roughly 36 million households
with more than 61 million children received payments, cutting the
child poverty rate by about a third.

“While in place, the monthly child tax credit payments buffered
family finances amidst the continuing pandemic, increased families’
abilities to meet their basic needs, reduced child poverty and food
insufficiency, and had no discernable negative effects on parental
employment,” the report’s authors say.

Plans to extend the program: Democrats sought to extend
the expanded tax credit for another year through their Build Back
Better bill, but resistance from Sen. Joe Manchin (D-WV) has all
but scuttled that plan.

Manchin has objected to what he sees as the program’s excessive
generosity, and reportedly has expressed concerns about the
likelihood that the cash payments would be used by parents to
purchase drugs. The conservative Democrat wants the tax credit to
come with more stringent income limits, as well as clear work
requirements — conditions opposed by many Democrats to his left.
And he has insisted that the program be paid for in full on a
realistic schedule, objecting to the short-term extension Democrats
had used to limit the official cost of their $1.75 trillion
spending package. The 10-year cost of the program is estimated to
be $1.6 trillion — nearly as large as the entire social spending
package Democrats were trying to pass late last year.

Child advocates said the increase in poverty shows that Congress
needs to figure out a way to extend the tax credit, even if it’s
smaller than the plan originally put forth by Democrats. “Today’s
report should shake Washington to its core,” Paolo Mastrangelo of
Humanity Forward, a non-profit that seeks to reduce poverty,

told The Washington Post. “This is not a moment
for staking out political positions. Congress needs to compromise
on a targeted, monthly child tax credit that will reverse these
grievous losses. Any extension, even one that is much more targeted
in size and scope, will help reduce the tragic number of families
entering poverty.”

Biden Admin Asks Congress for $5 Billion More in Global
Pandemic Funding: Report

Biden administration officials asked congressional appropriators
Friday for at least $5 billion more in funding the combat the
Covid-19 pandemic internationally, Politico’s Alice Miranda
Ollstein and Erin Banco
report. The new funding request, they write, is
“far less than agencies originally suggested would be needed to
vaccinate the global population and provide funding, staff and
other forms of relief to hard-hit regions.”

The request, reportedly made during a call involving House and
Senate lawmakers and officials from the U.S. Agency for
International Development (USAID) and other federal agencies, is
far below the $19 billion USAID requested earlier this month for
its Covid-19 efforts in 2022, and it’s also well shy of the $17
billion in funding progressives have said is needed for global
pandemic aid efforts.

Health and Human Services Secretary Xavier Becerra earlier this
week told Congress that his department needs at least $30 billion
more for its domestic Covid-19 response, including vaccine
distribution and testing.

How Build Back Better May Rise Again

President Biden earlier this week again pitched his Build Back
Better agenda, telling a gathering of the National Association of
Counties that his plan would help middle-class families “getting
clobbered by the cost of everyday things” by capping child-care
expenses and cutting the cost of prescription drugs. In a tweet
Thursday, the president again touted that 17 Nobel Prize winners in
economics have said the plan will ease inflationary pressures. “We
can get this done,” Biden said.

But as The Washington Post’s Sean Sullivan and Seung Min Kim
report, “it’s not clear such a plan exists anymore, at least in any
recognizable form.” Talks between the White House and key lawmakers
about the plan “have virtually evaporated,” they report, even as
“Biden sometimes makes it sound as though Build Back Better is on
the cusp of passage.”

In reality, the plan is still clouded by questions about what
any new version might look like: “It’s far from evident what, if
any, version of Biden’s once-sweeping proposal could pass this year
and what it would include,” Sullivan and Kim say. “Would it be a
climate plan? A prescription drug initiative? A health-care
bill?”

The plan, and any potential answers to those questions, hardly
came up during a Senate Democratic lunch Thursday attended by White
House Chief of Staff Ron Klain, further evidence that the
legislation remains stalled and has been shifted to the back
burner. Sen. Joe Manchin (D-WV), whose objections to the House
version of the Build Back Better Act effectively iced it, said this
week that “there have been no formal talks for quite a while.”

The Democrats at Thursday’s lunch reportedly focused instead on
broad steps to cut costs in the economy, like a temporary gas tax
holiday. Others in the party have pushed narrower efforts to lower
the price of insulin and other prescription drugs.

The outlook for a new plan: Lawmakers’ attention has
shifted to other priorities, but Democrats haven’t ditched Biden’s
agenda.

White House spokesman Andrew Bates said in a statement to the
Post that “the president and his team are working hard with a wide
range of lawmakers on cutting costs for American families,
including with regard to prescription drugs and energy.” He also
emphasized that the plan would “reduce the deficit.”

Punchbowl
News notes that, while Senate Majority Leader Chuck
Schumer and others are still working to reach some compromise with
Manchin, the acknowledgment that Build Back Better is stalled
helped Democrats and Republicans reach a deal on topline government
funding levels for the full year and make progress toward an
omnibus spending bill. “Democrats’ push to pass BBB had been the
biggest impediment to such a bipartisan agreement,” Punchbowl says.
“House and Senate appropriators are now rushing to put together an
omnibus spending package by the new government funding deadline of
March 11. That package will include billions of dollars in earmarks
for lawmakers in both chambers, an added bonus heading into
November.”

The bottom line: Talk about elements
of the Build Back Better plan is likely to ramp up again in coming
weeks. The Post notes that a number of Senate committees are
tentatively planning hearings about potential parts of a revised
spending package, taking some steps to appease Manchin, who has
insisted that any new plan go through the regular legislative
process.

Quote of the Day: California’s Step Toward Normalcy

“We are moving past the crisis phase into a phase where we
will work to live with this virus.”

– California Gov. Gavin Newsom (D) at a news conference
Friday announcing a plan for his state to become the first in the
nation to treat the coronavirus as endemic. “The approach for
California’s almost 40 million residents could herald similar
changes throughout the United States,” The Washington Post
notes, “but widely varying vaccination rates mean
some areas may be better prepared than others.”

A programming note:
We’re off Monday for Presidents’ Day. We’ll be back in your
inbox on Tuesday. As always, send feedback to
yrosenberg@thefiscaltimes.com.

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