Image source: Getty Images
Last month’s edition of the Journal of the American Medical Association (JAMA) confirmed what dozens of other studies have found: Food insecurity increased substantially once Congress refused to extend federal monthly advanced Child Tax Credits.
A break for families
In 2021, as the country continued to grapple with COVID-related illnesses, the Biden administration managed to get the American Rescue Plan Act through Congress. The plan included three major changes to the Child Tax Credit:
Discover: This credit card has a rare $300 welcome bonus
More: These 0% intro APR credit cards made our best-of list
Alert: highest cash back card we’ve seen now has 0% intro APR for 15 months
- Expansion of eligibility to include families earning little to no income.
- Boost in credit amounts from $2,000 per child annually to $3,600 per child under the age of 6 and $3,000 per child aged 6 to 17.
- A provision that allowed families to receive half the credit as an advanced monthly payment into their bank account between July and December 2021.
For reasons we will cover in a moment, it’s important to note that not a single Republican in either the Senate or House of Representatives voted in favor of this aid to families.
American Rescue Plan impact
JAMA points to research conducted by the nonpartisan Brookings Institution research group. According to Brookings, the temporary expansion of the tax credit lifted 3.7 million children out of poverty as of December 2021.
Brookings found that the expanded Child Tax Credit significantly improved food security, and also promoted healthy eating. Further, families were better equipped to fight pandemic-related inflation.
There were other benefits associated with the Child Tax Credit expansion, according to the Brookings Institution, including:
- A decline in credit card debt as families no longer had to pull out plastic to pay for necessities.
- Fewer families relied on payday loans and pawn shops to get by.
- Fewer parents had to sell blood plasma to earn money.
- Some families were able to begin or build an emergency fund.
- There was a significant decline in the number of evictions.
- Non-white households — including Black and Hispanic — had funds to cover for childcare and education expenses.
In other words, life became easier for more than 35 million American households with children.
Then it ended
When President Biden first proposed the expanded Child Tax Credit, he wanted it to run through 2025. This would give families time to get on their financial feet. Instead, the program was slated only to run between July and December 2021.
Once monthly Child Tax Credit payments ended, Democrats in Congress could not manage to bring any of their Republican colleagues across the aisle to vote for an extension.
JAMA reports that following the first missed payment, food insecurity immediately spiked. And by July, there was a nearly 25% increase in the number of families without enough food. The most impacted are low-income, single-adult, Black, Hispanic, and Indigenous households.
The JAMA article recommended, “The findings of this study suggest that there was an increase in food insufficiency among households with children after they stopped receiving monthly Child Tax Credit payments. Given the well-documented associations between inability to afford food and poor health outcomes across the lifespan, Congress should consider swift action to reinstate this policy.”
Moving forward
Despite the recommendations of health officials, hunger advocates, racial justice organizations, and civil rights groups, it appears that the House of Representatives will be back in Republican hands. Unless several representatives break with their party to support the reinstatement of the program, millions of families will continue to struggle to put food on the table.
If you would like to see the return of Child Tax Credit payments, this link will help put you in touch with your elected representatives.
Alert: highest cash back card we’ve seen now has 0% intro APR until 2024
If you’re using the wrong credit or debit card, it could be costing you serious money. Our expert loves this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee.
In fact, this card is so good that our expert even uses it personally. Click here to read our full review for free and apply in just 2 minutes.
Read our free review
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
