One of the most important anti-poverty initiatives in decades has expired.
Although the boosted Child Tax Credit could still get a revival for 2022, as of now, those monthly payments are off the table. And that could have catastrophic results at a time when so many families are struggling with higher living costs in the face of rampant inflation. In fact, researchers say that the child poverty rate could be persistently high after April and through the rest of 2022 if the boosted Child Tax Credit doesn’t come back.
To be clear, if lawmakers don’t take action, the Child Tax Credit won’t go away. Rather, it will revert to its former maximum $2,000 value.
But in that case, it won’t be fully refundable and it also won’t go out in the form of monthly installments. And the mere fact of having to wait to collect that money could put lots of families — and the children they support — in a financially precarious state.
As the LGM community already knows, the extension of the credit was a major source of fiction in the failed negotiations over Build Back Better. Manchin has offered a number of objections: it costs too much and should be more aggressively means tested, it will spur inflation, and that the poors can’t be trusted with the money.
The obvious solution to Manchin’s concerns about cost – one that he has essentially proposed – would be to offset the Child Tax Credit with some progressive tweaks to the tax code. But, of course, Sinema’s opposition to rolling back unpopular, regressive tax cuts has made that route difficult.
So here we are.