According to new data released on Thursday, child poverty increased in January following the end of President Joe Biden’s child allowance.
According to a study conducted by Columbia University’s Center on Poverty and Social Policy, 3.7 million children fell back into poverty after the expanded child tax credit expired last year. The child poverty rate increased by 41% in January, from 12% in December to 17% in January.
It effectively reversed the benefit program’s progress toward reducing the number of children living in poverty, raising the rate to where it stood at the end of 2020. According to the study, black and Latino children experienced the greatest percentage point increases.
“It did a lot of good for poverty reduction and reductions in food hardship,” study co-author Zachary Parolin told Insider. “Now that the program has expired, we’ll lose a lot of those gains unless we see some rapid labor market recoveries in the very near future.”
Parolin added that families may have more difficulty affording food in the coming months, particularly as grocery prices rise. Inflation has recently reached a four-decade high, and Parolin believes the benefit could provide an additional financial cushion for families.
Sophie Collyer and Megan Curran of Columbia University also contributed to the study.
The child allowance was established by Congressional Democrats last March as part of the Biden stimulus bill. They transformed the child tax credit into a one-year, near-universal cash benefit for families, extending eligibility for the first time to households with little or no taxable income. Families could receive $250 for each child aged 6 to 17 years old, or $300 for each child aged 5 and under.
According to the Joint Committee on Taxation, the program cost $120 billion for the fiscal year — roughly one-sixth of what the United States will spend on defense in 2022.
Democrats had pushed for the credit as a way to expand the safety net for children in the same way that Social Security did for seniors in the twentieth century. In the House-approved Build Back Better plan, they included a one-year extension of the benefit, and the vast majority of Democrats supported it.
However, the party ran into opposition from West Virginia Senator Joe Manchin, a conservative Democrat who eventually torpedoed the House bill, at least in part because of the child tax credit. He has raised a number of concerns, including the program’s potential to discourage families from working and whether the money will be spent on drugs.
Manchin has also long been skeptical of the federal government issuing unconditional payments. He has advocated for the reinstatement of a work requirement for the program, which experts say would exclude the poorest families from receiving federal assistance and weaken its anti-poverty effects.
There’s little chance that the program will be reinstated anytime soon because Republicans unanimously oppose the Biden spending plan, which has stalled in the Senate’s evenly divided chamber. Democrats will also be unable to pass the economic package on party lines in the upper chamber without Manchin’s approval.
For the time being, Congress has moved on to other priorities, and it is unclear when or if the plan will be revisited. On Thursday evening, Rep. Alexandria Ocasio-Cortez launched a thinly veiled attack on Manchin for “nuking” the program.
A bipartisan agreement, on the other hand, could be in the works. Sen. Michael Bennet of Colorado, a supporter of the program, recently told Insider that he speaks with Sen. Mitt Romney of Utah “all the time.” It’s unclear whether those discussions are aimed at reintroducing a child allowance.
Romney proposed a competing child benefit program that would provide families with even larger checks. He’s left the door open for a future bipartisan agreement, and Romney says he’s willing to negotiate on resurrecting some form of the program once Democrats decide on the fate of their economic agenda.
