Every child, regardless of their background, deserves a fair shot at success. And by providing families with the resources they need to afford the basics — such as food, housing, clothes and school supplies — the federal Child Tax Credit sets millions of children in America up for better opportunities.
But for too long, many of the kids who needed help the most were left out of the credit, while children in wealthier families received its full benefits. Congress passed a temporary fix as part of the American Rescue Plan Act, making the credit fully refundable so that the poorest children in America could receive the full amount of the benefit, and increasing the size of the credit to $3,000 per child, and $3,600 per child under 6.
Congress also made the credit more responsive to the ongoing costs of raising a child by issuing the credit in monthly installments, and excluded the highest-earning families from the credit, phasing it out for single earners at $75,000 of annual income and $150,000 for married couples.
While these national benefits are significant, Louisiana stands to benefit from a permanent expansion of the Child Tax Credit more than any other state.
Now, Congress has a historic opportunity to give more than 1 million Louisiana children a surer footing on the road to success by making the expanded Child Tax Credit permanent as part of the Build Back Better plan. If Congress fails to act, low-income children and their families will lose the support of the Child Tax Credit at the end of the year, making it harder for our state’s poorest families to make ends meet.
This help is particularly important in Louisiana. Even before the pandemic, nearly half of Louisiana’s Black children, 1 in 3 Latino children, and 1 in 7 white children started their lives with far fewer resources than they deserve, because they were growing up in families earning poverty wages, before government assistance.
In fact, U.S. Census survey data show that when low-income Louisiana families (earning less than $35,000 per year) received Child Tax Credit payments, they used that money to help cover the costs of food, education expenses, clothing, utilities and shelter costs, increasing their household’s financial stability.
One Louisiana mother that the Budget Project recently interviewed explained how the monthly Child Tax Credit payments were a key support when a bout of Covid forced her out of work for two weeks. “It’s allowed me to go ahead and pay my rent,” she said. “If I miss one day of work, it impacts us. And so being off work for almost two weeks is definitely a huge, huge impact. […] It’s allowed me to not have to stress out and worry about being able to pay the bills that are due.”
Nationwide, the CTC lifted 3.5 million children out of poverty in August, and cut food insufficiency among households with children by 25%.
While these national benefits are significant, Louisiana stands to benefit from a permanent expansion of the Child Tax Credit more than any other state. An analysis by the Urban Institute finds that Louisiana’s child poverty rate, after government benefit programs and payments are taken into account, would drop by more than half under an expanded Child Tax Credit, lifting 96,000 Louisiana kids above the poverty line.
For those children, It is essential that Congress extend the expanded Child Tax Credit. It is also critical that Congress’s extension doesn’t put barriers in place that would cut kids off from aid.
West Virginia Sen. Joe Manchin has proposed an earnings requirement for the credit, which would push kids back into poverty — or deeper into poverty, while doing nearly nothing to meet Manchin’s stated goal of increasing work among parents. As scholars Pamela Herd and Donald P. Moynihan write, work requirements don’t work, but investments in children do: “Adding work requirements to the CTC may sound reasonable in the abstract, but in reality it represents a political choice to leave millions of children mired in poverty.”
Louisiana’s kids simply can’t afford to go backwards.
Congress should reject Senator Manchin’s call to impose an earnings requirement on a benefit for kids, and should pass a full and permanent expansion of the Child Tax Credit.
-by Danny Mintz, Director of Safety Net Policy