They sent stimulus payments to low- and moderate-income families. Even families with zero earnings in the previous year were eligible for the stimulus payments, families like those we profiled in $2.00 a Day. In this way, the federal government has sent tens of billions of dollars in cash—more money than the entire annual budget of TANF—to poor families since the crisis started. And while cash welfare was always largely disliked by the American public, stimulus payments have proved wildly popular, perhaps because the middle class has received them too. According to a poll taken at the end of January, nearly eight in 10 Americans were in favor of the $1,400 payments proposed in the American Rescue Plan. Another poll found that even a majority of Republicans favored them. And the evidence indicates that this approach has worked as well as anything we’ve ever done: All told, families with children have been far better protected during this downturn than during any that came before.
These payments, of course, are temporary. But Biden’s expanded child tax credit, passed in March and targeted directly at children, seems likely to be just as popular, and could form the basis of a permanent program. The full payment of $3,600 each for children under 6 and $3,000 each for all other children is the same for everyone below a certain income—$75,000 for a single filer and $150,000 for joint filers. Some administrative details are still being worked out; congressional champions intend for the credit to be paid monthly starting in July, but the IRS could delay that or make payments less frequently. The program has been approved for one year of funding. Unless it is made permanent, it will disappear in 2022.
When they start to receive the benefits, middle-income families will be able to use the money to pay for child care or after-school programs, to save for college or buy books. Poor parents can use it for the exact same purposes, but they can also ensure that the rent is paid and the lights stay on, or buy diapers or school supplies.
Despite the program not being targeted only toward low-income kids, our colleagues at Columbia University estimated that a child tax credit comparable to Biden’s would cut child poverty by 45 percent. It would cut poverty among Black children by 52 percent and among Native American children by more than 60 percent.
The idea behind the child tax credit isn’t new; scholars and some Democratic members of Congress have been talking about the promise of just such a policy for a long time. We joined the ranks of advocates for a “child allowance” after we published our book, as we continued to think about the best ways to help parents like Travis and Jessica Compton, Jennifer Hernandez, and Rae McCormick. It seemed obvious to us that the poorest families in America still needed the cash safety net that had been dismantled by welfare reform. Yet we also didn’t think the nation should return to the flawed program that existed before welfare reform.