The Joint Economic Committee has released a new report highlighting how six months of advance Child Tax Credit payments, included in President Biden’s American Rescue Plan, have dramatically reduced childhood poverty and improved family finances.
The expansion of the CTC is expected to reduce childhood poverty by 40 percent and lift 4 million children out of poverty.
As part of the expansion, half of the CTC has been distributed in advance via monthly payments, which have helped families meet their financial needs in real time. Food has consistently been the top category for CTC spending, while many also used the payments for school expenses prior to the start of the 2021-22 school year and child care.
Evidence shows the benefits of the expanded CTC are economy wide. It is estimated to boost consumer spending by $27 billion, generate $1.9 billion in revenues from state and local sales taxes and support over 500,000 full-time jobs. And for ever $1 of investment, the expanded CTC is estimated to provide $8 in social and economic benefits.
“The expanded Child Tax Credit is one of the largest-ever single-year tax cuts for families with children, helping to offset household costs when families need it most. During this strong but uncertain recovery, the advance CTC payments have been a critical lifeline, bolstering household incomes for families across the country,” said Joint Economic Chair Don Beyer (D-VA-08).
“Evidence shows investing in the economic well-being of children and families is crucial to boosting overall economic growth and shared prosperity. By reducing financial hardship, improving life outcomes for children and helping to close the racial wage gap, the expanded CTC will generate economy-wide returns for decades to come,” Beyer said.
“To cement this historic reduction in child poverty and promote sustained economic growth, Congress must immediately pass the Build Back Better Act,” Beyer said.
The final round of payments will be distributed by the Treasury Department on Dec. 15. The fully paid-for Build Back Better Act, which has passed the House, extends the expanded CTC for another year. For payments to continue, the extension must also pass the Senate and then be signed into law by President Biden.
Share
AFP
