Congress Could Lift Millions Of Children Out Of Poverty. Will Politics Get In The Way?
There’s a potentially historic push to reduce child poverty in this country, with bipartisan agreement that something could be done. But will politics get in the way of a real solution?
Jamila Michener, professor of government at Cornell University. Her research focuses on poverty, racial inequality and public policy in the United States. Co-director of the Cornell Center for Health Equity. Author of “Fragmented Democracy.” (@povertyscholar)
Wendy Brown, mother of 6 in Greenville, Pennsylvania.
Let’s start with President Biden’s proposal for a $1.9 trillion COVID relief package. How would it tackle child poverty?
Jamila Michener: “The goal of the plan is to provide resources to families in need. And I teach a class on poverty, and I always tell my students that in many ways poverty is a complex problem. But, in some ways, it’s also very straightforward, which is that when you give people more money, you pull them out of poverty. And I think that that’s some of the logic of this plan, is that if we give families, through the IRS, through the tax code benefits — and it’s tied to the number of children that you have, the age of those children, and it is fully refundable.
“Meaning that if the amount of the credit is larger than the tax you owe, you will still get the difference. So we’re maximizing how much we’re getting to these families. We’re increasing the amounts that we’re already giving through child tax credits. And we’re changing the way it’s given so that it’s fully refundable. Those are really just efforts to maximize the amount that families get. And that’s how we’re going to pull more children and more families out of poverty, by giving them more resources. It’s really quite straightforward in that sense.”
The plan in the COVID relief bill would give caregivers of children $300 a month for each child under six. $250 a month for older children, but at least only for the next year. We’re not sure beyond that. But the key thing is it would be a direct payment to families?
Jamila Michener: “Yes, so it’s a direct payment to families … and this is really unique and different than how child tax credits work now, it’s going to be periodic payments that the IRS makes to these families. So just as you said, $300 a month for children under six, for each child under six. And $250 for children between six and 17. And so the amount that you get will be based on the age of your children and the number of your children. And you’ll get periodic payments, if all goes as planned, starting in July. They’re still determining all the details, but every so often after that.
“And then, of course, when you actually file your taxes, when tax time comes around, whatever the kind of remainder of the benefit is, there’s an additional portion that families will get then. So you’ll still get that bump around tax time, but you’ll also be getting a regular amount in the time in between, which is really important for families. Because you don’t have financial needs just one time per year. Now, the crux here is that it’s for one year, it’s only for one year. And so there will be another political battle afoot a year from now when we’re trying to decide whether this is a policy that we want to continue.”
Senator Mitt Romney, Republican of Utah, he’s got another proposal that would last beyond that one year window. What are the important differences to understand between the Biden proposal and the Romney proposal?
Jamila Michener: “The key differences with the Romney proposal is that, first of all, Romney is proposing a permanent benefit. This isn’t a one year thing that happens as a kind of function of a relief bill or a stimulus plan. It is a consistent and permanent benefit. The second big difference with Romney’s plan is that this is not administered through the IRS. So it’s not a tax credit. It’s an allowance. And so you get the kind of pro on the side of the Biden plan, which is this is a consistent benefit that families are going to get. As opposed to like a one time thing you get once a year when you’re filing your taxes, which tracks much more accurately to people’s lives. But also because it’s not mitigated through the IRS, it’s going to reach more people.
“One of the things that happens when we choose the IRS as a mechanism for distributing policy benefits is we limit who gets those benefits. There are people who do not file taxes, and these tend to be the folks who are most marginal and most vulnerable, either because they have a very, very low income or because they have a precarious relationship to the government in some other way. Maybe you live in a mixed status household and there’s someone in your household who’s undocumented. Folks like that are less likely to pay taxes. And we know that there are differences even across racial and ethnic groups, for example. So the decision to have something happen through the IRS has ramifications. And it means that these benefits reach fewer people and they reach people more inequitably. The Romney plan would really get around that, and it would be permanent.”
There’s also a proposal from Senator Mike Lee and Marco Rubio about expanding the child tax credit, increasing that tax credit to $3,500 a year for school age children, $4,500 a year for younger children. And they are proposing making part of that credit refundable, which they say would actually reach families that don’t make enough to file taxes. Is that a workable solution?
Jamila Michener: “It’s an extension of more of the same. So we have a child tax credit and that child tax credit was expanded as recently as 2017. And we know that that expansion had positive effects on many American families. So it’s not to say that an expanded child tax credit compared to doing nothing is a bad thing. But what it does is distract us from the reality that there’s an alternative that could have a much wider, and deeper and more transformational change. Will an expanded child tax credit in the ways that Senators Rubio and Lee are proposing, will it help some families, will it help many families? Yes. Will it help as many families as either the Romney plan or the Biden plan? No, we don’t have any reason to believe that it will.
“And if you think about what’s at the heart of the difference here and the core argument that Senators Rubio and Lee are making is essentially that a child allowance is bad because it goes to everyone and that makes it welfare, and welfare is bad. And until we get to a point as a country where we can reevaluate that assumption, we’re going to keep bumping up against the same ideological wall. Which is, Welfare is bad. We can’t give people something for nothing. We can only give people something if they’re working. And we can only know they’re working if we deliver the benefits through this child tax credit mechanism. That’s the only way to make sure that we’re rewarding work.
“Well, who are you punishing under that kind of formulation and why? I think that until we say, Actually everyone living at a basic standard of human dignity is more important than whether we call this welfare and whether we see a minor dip in labor market participation, having children that [don’t] live in poverty is the priority. And we work all the other policy details around that. That will get us to something much more like a child allowance. But if you say, Making sure no one gets welfare is the priority, not pulling children out of poverty, but ensuring that no one is getting this bad thing called welfare and we’ll build our policy around that. That’s essentially what Senators Rubio and Lee’s policy reflects. The core commitment is no welfare. The secondary commitment is help some children if you can.”
Has the United States ever given out direct payments to help children living in poverty?
Jamila Michener: “We’ve had kind of versions of this on a small scale. There have been experiments done or kind of pilot runs of different kinds of programs that involve direct cash payments. And historically as well, we’ve had, in different periods, we’ve given mothers pensions, for example. And so those were kind of direct payments. But we don’t have an extensive history with this.
“And it’s always been deeply politicized and vulnerable to kind of political pushback when this kind of direct payment, any kind of direct payment system is set up this way. I think there’s a huge precedent for this internationally. In fact, if we look at the countries that have the lowest child poverty rates, they are the countries that had these kinds of direct payments. So Denmark, Finland, Norway, Sweden. And of course, there are lots of differences between the U.S. and those countries, and that’s something they’d take into account. But there’s also a lot to suggest that this is the way to tackle child poverty.”
American children who are living in poverty — it’s disproportionately children of color, Black and Latino children. So there seems to be a sort of a compounding inequality here.
Jamila Michener: “Absolutely, I think this is a critical part of the landscape of poverty in the U.S. more generally. But in particular child poverty, 73% roughly of children living in poverty are children of color. Of course, these numbers are ever shifting because the COVID pandemic has really challenged a lot of families and also disproportionately families of color. But we’re talking about 30% of Black children who are living in poverty, roughly the same number, about 29% of American Indian, Native American children and approaching a quarter of Latinx children.
“And so while we don’t want any children suffering, it’s important to note that the nature of the suffering, and the patterning of the suffering is racialized. So that when we decline, for example, to do something about these problems, we’re not just sort of relegating children to these long-term and short and medium term outcomes that are negative, but we’re relegating children of color to these outcomes, which then perpetuates the various forms of racial injustice that we see in society.
“So this has been a big year for thinking about the criminal legal system and its connection to racial injustice. … That is downstream from where these children are now, who are living in poverty. And so there are lots of things to do to address the criminal legal system, for example, downstream as it affects adults. But we should also be looking upstream and thinking about what is accounting for some of those patterns down the line. And so if we want to address racial justice, addressing child poverty should be near the top of our list.”
How do we better understand what the benefits are to not only these children and their families, but the nation moving forward?
Jamila Michener: “I think this is really important because we can think about short-term costs of a program like this, and we can forget to sort of amount for, or account for all of the medium-term and long-term cost of doing nothing or of not doing enough. So whether we think about children across the intergenerational, across their lifespans.
“Children who are living in poverty are less likely to graduate from high school. They’re less likely to go to college. They’re more likely to be involved in the criminal legal system. Their health outcomes are on a worse trajectory. All of those things mean cost in the longer term, right? We’re paying for those hospital care costs. We’re paying for those costs around incarceration. We’re paying for the loss of earnings in the labor market.
“And we’re paying for the different things they’re exposed to, whether it’s exposure to asbestos or lead paint or other things associated with substandard living conditions. And that’s just if we think about the children. Because there are also costs incurred by parents who are navigating poverty with their children, along some of those same metrics. And so it costs us much more in the medium and long-term to either do nothing or to take insufficient action. Relative to what it cost us in the short-term to implement an allowance program that is going to consistently pull children and families out of poverty.”
From The Reading List
Vox: “What Democrats can learn from Mitt Romney” — “Suppose you’re a single parent raising two kids, ages 3 and 5. You were furloughed in the spring, when the big-box store you worked at downsized.”
The Conversation: “Child poverty in the U.S. could be slashed by monthly payments to parents – an idea proved in other rich countries and proposed by a prominent Republican decades ago” — “Which former president pitched a Family Assistance Plan to the American people that would have provided many families with children a monthly stipend?”
Associated Press: “Analysis: Child poverty a hidden focus of virus relief plan” — “Tucked inside President Joe Biden’s $1.9 trillion coronavirus relief plan is a seemingly radical notion that children should not grow up in poverty.”
New Yorker: “A Bold Proposal to Ease Child Poverty Is the Essence of Bidenomics” — “Part of Biden’s $1.9 trillion COVID-19 relief package would beef up a number of programs for the working poor, including food stamps and the earned-income tax credit, which is effectively a wage subsidy.”
Los Angeles Times: “Democrats push long-term move against child poverty” — “As the House prepares this week to approve a one-year move to fight child poverty as part of President Biden’s COVID-19 relief package, leading Democrats and advocacy groups have begun jockeying to make the policy permanent.”
Center for American Progress: “An Expanded Child Tax Credit Would Lift Millions of Children Out of Poverty” — “Currently, nearly 11 million—or 1 in 7—U.S. children live in poverty.1 By that measure, the United States compares dismally with other wealthy countries.”
Marketplace: “Relief bill could lift millions of kids out of poverty by expanding tax credit” — “We’ve been looking into different parts of the big COVID-19 relief package working its way through the House of Representatives, possibly coming up for a vote later this week, and some of the ways it aims to use changes to tax law to provide economic relief in the pandemic.”
Washington Post: “Opinion: Three questions to ask about Biden’s and Romney’s child allowance proposals” — “After endorsements from President Biden and a high-profile Republican senator, the country seems on the verge of adopting a society-transforming idea: giving a ‘child allowance’ to the poorest families.”
This article was originally published on WBUR.org.
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