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With an end to expanded support to help Americans weather the COVID pandemic, a measure of poverty shows a troubling rise, according to recently released data from the U.S. Census Bureau.
The supplemental poverty measure, which accounts for government assistance programs, rose from 7.8 percent in 2021 to 12.4 percent in 2022. It was the first increase since 2010.
“The pandemic showed that we could stand up policies that could help families. These numbers underscore how much poverty is a policy choice,” Arloc Sherman, vice president for data analysis and research at the Center on Budget and Policy Priorities, told the New York Times.
This is especially true of child poverty.
The rise in the number of children in poverty is especially stark, and frustrating because a fix was available to federal lawmakers, but they didn’t take it. The supplemental poverty rate for children more than doubled between 2021 and 2022.
This comes after the nation’s child poverty rate was slashed, in large part because of an expanded federal child tax credit.
As part of the American Rescue Plan Act passed by Democrats in Congress in March 2021, the federal child tax credit was made more generous and payouts were more frequent. The maximum value of the credit rose from $2,000 to $3,600 per child under age 6 and $3,000 for older children. The credit became fully refundable, meaning it was paid out in full even if someone owes less than that amount in taxes.
The 2021 changes also made it so the benefit was automatically paid in cash each month beginning in July, rather than paid as a lump sum when taxes are filed.
The changes were credited with lifting millions of American children out of poverty.
However, the benefits were short-lived. The expanded credit expired at the end of 2021, and Congress has failed to extend it.
Initial research suggests that the expanded child tax credit reached over 61 million children in more than 36 million households, and funds were primarily used for child care, food, housing and other basic needs.
A March 2022 study from the National Bureau of Economic Research suggests that the benefits of returning to an expanded child tax credit would greatly outweigh its hefty price tag. It estimates that the expanded program would provide benefits worth about $980 billion per year.
In Maine, about four out of five kids live in households benefiting from the expanded credit, according to the progressive Maine Center for Economic Policy. The vast majority of low-income families receiving the benefit said they used it to pay for necessities — most often food — and the biggest benefits went to rural areas.
Maine lawmakers provided a bit of help this year. As part of the budget, the Maine Legislature revamped the state’s child tax credit.
The new, fully refundable state credit provides eligible Maine families with $300 per child when they file their state tax returns. The credit is now indexed to inflation, and eligibility was expanded.
On the federal level, we realize that Congress is having a hard time simply agreeing on and passing a budget to keep the federal government functional beyond the end of this month, when the current funding runs out.
However, it should — in theory — be easy for lawmakers to prioritize the wellbeing of American children and to reinstate the pandemic era child tax credit. It is obvious that the credit helped both children and their families rise out of poverty.
