Los pagos de créditos fiscales por hijos están reduciendo el hambre y la pobreza infantil. Pero, ¿pueden las familias seguir apostando por ellos? (ENG)

01-10-2021
Economía y empleos
MarketWatch, Estados Unidos
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It’s several months into payments under the temporarily-increased child tax credit and research is already suggesting the money is making a difference for poor children and their parents.

The issue is what happens next year, after the boosted payments — for now — are supposed to conclude at the end of 2021.

As Capitol Hill negotiations twist and turn on a bill that would increase social safety net programs using tax hikes on the rich, some observers sound hopeful that boosted, monthly child tax credit payments will live on in the years to come.

It’s just a question of how much the child tax credit payments will be worth and how many years the arrangement will continue, they add.

Rachel Snyderman, associate director at the Bipartisan Policy Center’s Economic Policy Project, said she’s “very confident” some version of the boosted, recurring credit will continue.

But do payments stay at the same amount? Do they incorporate new eligibility rules? What does the credit look like when Democrats have room for few, if any, ‘no’ votes on their side to pass legislation in the budget reconciliation process? “It’s anyone guess where that will fall,” she said.

Will the policy be extended?

“We’re pretty confident that any package that passes will include a child tax credit extension,” said Adam Ruben, director of Economic Security Project Action, which has lobbied for a permanent extension of the credit in its current iteration. “We’re more focused on how we can make sure the child tax credit is as robust as possible, not ‘can we save it?’”

To be clear, the child tax credit has existed since the Clinton administration and, in the intervening years, the Democrats and Republicans in Congress have supported it, Snyderman and Ruben noted. That’s one reason for optimism, in their view.

But a key turn happened in March, with the $1.9 trillion American Rescue Plan designed to shore up family finances during the pandemic. Congress expanded the credit, broadened eligibility rules and authorized advance monthly payments for half of the sum due to parents.

Among other things, the credit increased from $2,000 to $3,600 for children under 6, and $3,000 for children up to age 17.

Since mid-July, the IRS has been sending eligible households direct payments of up to $300 per child under age 6, and up to $250 for children between the age of 6 and 17.

The September batch of payments reached approximately 35 million families, paying approximately $15 billion, according to the Internal Revenue Service.

Following the July and August payments, low-income households with kids experienced a 25% drop in food insufficiency, Columbia University researchers said Monday in a study released by the National Bureau of Economic Research.

For Black, Latino and white households making under $35,000, the money “strongly reduces food insufficiency,” they said.

Days earlier, the researchers determined the August payments kept 3.5 million children out of poverty.

There was an 11.5% child poverty rate in August, according to researchers at Columbia’s Center on Poverty & Social Policy. Without the money, there would have been an August child poverty rate of 16.2% — a 29% difference, they noted.

“We can see by the July and August numbers that, as an anti-poverty tool, it’s hugely impressive,” said Megan Curran, policy director at Columbia’s Center on Poverty & Social Policy. In Curran’s eyes, the credit is doing its job and “deserves a chance to keep succeeding and reach its full potential.”

Is the CTC a sustainable policy?

Not everyone shares that view.

For example, Robert Rector, senior research fellow at the right-leaning Heritage Foundation, has said an expanded credit passed by a bare Democratic majority is not “a sustained policy.”

Meanwhile, one poll in July found skepticism for a permanent expansion. Just over half of people said the credit should not be permanently expanded, according to a July poll from Morning Consult and Politico. The no’s among the nearly 2,000 participants broke down into 35% who said “definitely not” and 17% for “probably not.”

On the other side, 16% said the credit should definitely be expanded and another 19% said it should probably be expanded.

Likewise, an Economist/YouGov poll the same month also found 43% of people saying the expansion should be temporary and 29% saying it should be permanent.

Ruben noted both surveys occurred in July, when the first round of checks had just hit. “We’ve always expected that support would grow as checks keep coming [and] awareness grows,” he said.

Public support is mixed

Almost two-thirds (64%) of people support permanent expansion of the child tax credit, according to a poll released this month. Ten percent said they were not sure and 26% opposed, the survey said.

Studies like the Columbia findings on Monday pile on the reasons an extension, Ruben said.

In the array of proposals and spending plans under consideration, the payments to parents are “one of the parts of legislation that people feel most directly,” Ruben said. When a child tax credit payment hits an account, “voters see that, politicians understand that.”

Earlier this month, the Ways and Means Committee in the House of Representatives said it backed an extension of the credit’s current form through 2025.

As negotiations continue, Sen. Joe Manchin, a Democrat from West Virginia who is key to any bill passage in the Senate, has said he wants work requirements tied to the credit. The American Rescue Plan said low-income families could receive the full amount no matter the amount of earned income, according to the Tax Policy Center.

“Time will tell” what shape the child tax credit will take going forward, said Snyderman. Still, she added, “We’re very certain some form of expansion of the child tax credit will be included in the final reconciliation bill.”