Keep it coming |

We’ve done a wonderful thing. We’ve lowered the poverty rate dramatically during the pandemic. From 17.5% down to 11.9%! And, no, silly, it wasn’t the COVID-19 disease that created that change.

It was the American Rescue Plan. For this year, we raised the child tax credit to $ 3600 for kids under 5, and to $ 3000 for those between 5 and 17. (The child tax credit has been around for 24 years now- and the maximum used to be $ 2000 per child.) But, that’s still not really the big change.

Instead of waiting to file taxes and getting a big check, we deliver $300 a month (for those under 5; $ 250 for each older kid). An electronic deposit, which means folks have bank accounts- and won’t fall prey to those pay day lenders to cash a check (when they don’t have a bank account.)

The Brookings Institute reported (using the data from the Social Policy Institute study) that some 75% of the recipients were starting an emergency fund. These recipients also plan to find a better place to live or improve their homes, start a college fund, or hire a tutor for their kids. No longer living paycheck to paycheck alleviates their financial stress- and it means they are not stopped from getting ahead. No longer does a minor setback turn into a catastrophe.

All this means that our generation of children will have a better shot at economic success and long-term development. (This correlates when a family has lower rates of hardship, emergency savings, etc.)

Of course, there are only 2 more checks coming this year. Unless, of course, Congress makes this change more permanent. If they don’t, parents will go back to waiting until they file their income taxes. Which means they borrow money (again, from those payday lenders, getting sucked into a spiraling debt cycle) to make ends meet until that cash infusion arrives.

Let us not forget what the Center on Poverty and Social Policy discerned. For every buck provided by the child tax credit, our society gleans $8 from the higher future wages of the children being helped.

Let’s hope that Congress gets around to passing those two infrastructure bills real soon now.