Ending Child Poverty

What is the state of child poverty in the United States? A September article in the New York Times, written in collaboration with a research group called Child Trends, delivered some unexpectedly good news: it reported that poverty rates among children fell 59 percent between 1993 and 2019. Thanks to the Earned Income Tax Credit (EITC), the Child Tax Credit (CTC) and government-aid programs like SNAP, “America’s children have become much less poor,” wrote the Times’s Jason DeParle. Other contributing factors included lower unemployment, higher rates of participation of single mothers in the workforce, and higher state-level minimum wages. The article noted that child poverty declined in all fifty states and by about the same degree across different racial groups. It declined among children born in this country but also among immigrant children, in households with one parent or with two. While 11 percent of American children remained in poverty in 2019, the study’s authors conclude that our patchwork of government-aid programs has put us on the right track.

Some analysts have since raised questions about this article’s bold claims. Matt Bruenig of the People’s Policy Project contends that the report overstates the effect of the EITC and the CTC by assuming that everyone eligible for those credits took advantage of them—when in fact only 78 percent used the EITC. Bruenig also claims that the decrease in child-poverty rates from 2018 to 2019—the last year the study examined—is nothing more than a “statistical blip” due to a change in methodology in census data from year to year. He concludes that there is “basically no child poverty decline at all” in the twenty-first century. Far from bringing us into step with other rich nations, he concludes, our safety-net programs remain inadequate for the task of addressing poverty among children.

The fight against child poverty is a complicated one, involving many policies over many years. No one should be surprised if there’s disagreement about the degree of its success. But as debates over the statistical methods used to assess child poverty continue, we can already embrace and expand on the measures we know can save millions of children from deprivation. Two days after the New York Times article appeared, the Census Bureau reported that child poverty was reduced by almost half from 2020 to 2021. According to the bureau’s Supplemental Poverty Measure, which takes into account a range of government-assistance programs, the child-poverty rate fell from 9.7 percent in 2020 to 5.2 percent in 2021—the lowest rate since the metric was adopted in 2009. What’s behind this remarkable improvement? The expanded child tax credit. Before the pandemic, the child tax credit provided $2,000 per qualifying child, with a portion of it refundable at tax time. With the passage of the American Rescue Plan in March 2021, the amount was increased to $3,000 or $3,600 (depending on the child’s age) and made fully refundable with half of the funds paid out in monthly installments, even for those who earn too little to pay income tax. Without this expansion, the Census Bureau estimates that the child-poverty rate would have been 9.2 percent in 2021.

The key to the measure’s success was its simplicity. Combating childhood poverty doesn’t have to be complicated, as Elizabeth Lower-Basch of the Center for Law and Social Policy recently told CNN: “It’s about giving people the resources that they need to meet their and their families’ needs.” The expanded child tax credit did just that, providing a temporary but steady flow of cash for households that needed it. While some critics feared the policy would be a disincentive to work, there is no evidence that this was the case. And while increased government aid does appear to have contributed to the inflation we’ve experienced this year, it is not the only—or even the primary—cause. Overall, the expanded child tax credit was “a triumph of policy,” as H. Luke Shaefer, Patrick Cooney, and Betsey Stevenson wrote for Vox. But it was allowed to expire at the end of 2021, a casualty of Sen. Joe Manchin’s torpedoing of the Build Back Better Act. And analysts expect that without it, child-poverty rates will climb again in 2022 and beyond.

Failure to take advantage of such an obvious solution is a particular tragedy in this case. We know the expanded child tax credit works, and we know there are elected officials who support it—outspoken advocates include President Joe Biden and Sens. Bernie Sanders and Sherrod Brown. Even some Republicans, like Sen. Marco Rubio, are in favor of some version of this policy. One important lesson of the pandemic is that “going big” on safety-net programs really does help the Americans who need them. Letting that lesson go to waste as economic problems eclipse the pandemic would be a tragedy for children in this country, as well as their parents. It’s a bad sign when the government can’t learn from its mistakes; it’s an even worse sign when it can’t learn from its successes.