As Child Tax Payments Expire, Struggling Families Are Desperate

As Child Tax Payments Expire, Struggling Families Are Desperate

As Child Tax Payments Expire, Struggling Families Are Desperate

Congress could get inspiration from the tortured creation of Social Security.


There are great parallels between the birthing pains of Social Security and President Joe Biden’s domestic agenda in the Build Back Better package. Both proposed to fundamentally transform the social compact between working Americans and their government. Both met fierce cries of “socialism” from conservatives who felt that government should do as little as possible for ordinary folks. Both were fully paid for. Both met irresistible pressure to scale back benefits and help fewer people. And like Social Security, we hope, Build Back Better will be subsequently strengthened and expanded once the American people have fallen in love with it.

As descendants of President Franklin Roosevelt and his cabinet members who created Social Security, we could not agree more with President Biden’s comparison between Social Security and the backbone of Build Back Better, the expanded Child Tax Credit, in their power to reduce poverty.

From the day he took office, FDR and his Labor Secretary Frances Perkins had envisioned a sweeping program of economic security to lift workers out of the Depression. Midway through his first term, amid conservative backlash against the New Deal, he gave Perkins an imminent deadline to design a program of long-term economic security for hard-hit Americans. He told her, “I know you will put your back into it.… and you must not delay.”

Two days before the deadline, Perkins called her Committee on Economic Security (including our grandparents) to her home, “led them into the dining room, placed a large bottle of Scotch on the table, and told them no one would leave until the work was done.”

Thus was Social Security born, and would go on to become the most successful social program in this nation’s history—one that’s provided generations of Americans a critical safety net and lifted tens of millions out of poverty.

It’s easy to forget that Perkins’s initial version had to be significantly scaled back. When he signed it into law, FDR said the Social Security Act was “a cornerstone in a structure which is being built but is by no means complete.” Items dropped from the final legislation included disability and survivor benefits, automatic cost-of-living increases, coverage for domestic and agricultural workers (mostly people of color and women, to placate conservatives), universal health care, and a permanent government jobs program. But most of these omissions would be corrected in the ensuing decades.

A couple of weeks ago, another fundamentally transformative and successful poverty-reduction program expired. January 15 marked the end of monthly payments to families with children under the Child Tax Credit—which Biden’s American Rescue Plan had made “refundable,” so checks could go to needy families every month instead of only being taken as credits on their annual tax return. It would have been renewed under the Build Back Better legislation, which the House passed late last year, but the Senate can’t reach closure on.

Families of up to 60 million children have been receiving these monthly per-child payments, helping them stay ahead of inflation by lowering the costs of food, rent, utilities, and child care so parents can work. The payments slashed the number of children living in poverty in America by more than 40 percent through what is basically a tax cut for working families, heavily targeting children of color and in rural areas.

As one example, a working single parent with three kids who owed $5,000 in federal taxes in 2021 qualified for annual federal tax credits of $3000 per child, or $9,000 total, thus wiping out her federal tax burden and sending the remaining $4,000 credit to the family in equal monthly payments of $333. The result of allowing the program to expire is to impose huge tax increases on struggling families like this.

And the child tax credit is just one part of the improved social compact that Build Back Better offers to hard-hit families in America. It also includes universal pre-kindergarten, child care, elder care, reduced prescription drug costs, and investing in clean-energy jobs—all without adding a penny to the deficit, by making the super-rich and corporations start paying their fair share in taxes.

The headwinds against extending the Child Tax Credit take the form of every single Senate Republican—most notably fortified by West Virginia Democrat Joe Manchin, whose state ironically has one of the highest rates of child poverty in the nation (plus, inexplicably, Arizona Democrat Kyrsten Sinema, a former Green Party liberal whose state embraced Biden in 2020).

Now, as inflation hits a 40-year high and Covid-19 cases surge, is a terrible time to effectively hit working families with a major tax increase.

We beg these senators to listen to the people they represent who will be hurt by the loss of these tax credit payments if the Build Back Better legislation isn’t passed.

And yes, compromise is inevitable. As former Obama adviser David Axelrod recently wrote, “To paraphrase Roosevelt, it’s time for a rendezvous with reality and to fight for what is possible.” The package is in an ongoing process of scaling back, and President Biden has recently proposed breaking it up into smaller bite-size “chunks.” But we hope negotiators will do so with caution—and avoid imposing work requirements for the child tax credits, for the sake of disabled parents or guardians or elderly grandparents.

Fine, “break it up” into “chunks” or “pieces,” or whatever. FDR would have seen this as a speed bump, not a brick wall. As he exhorted, “The nation asks for action and action now.”

Maybe as they rework Build Back Better, Biden and Manchin should take a page from Perkins and crack open a bottle of West Virginia’s finest and agree not to leave the room until the job gets done.

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