A major effort against poverty that would lift the prospects for millions of children and close a long-standing gap in the country’s economic safety net appears to be approved by Congress, hidden in the COVID-19 bill, which is largely overshadowed by the debate on the size of stimulus control.
The proposal, which could give almost all American families a monthly check-up of up to $ 300 per month. Child, would cut child poverty almost in half and lift nearly 10 million children up to or above the poverty line according to analyzes conducted by the National Academy of Sciences and other expert groups.
The idea has been debated in Congress for nearly two decades, with lawmakers taking step-by-step steps to provide more assistance to low-income families with children.
The fact that the proposal is suddenly on the verge of passage – it is in both House and Senate Democratic versions of $ 1.9 trillion COVID settlement bill and is a high priority for speaker Nancy Pelosi (D-San Francisco) and other party leaders – clearly illustrates how the pandemic and the ensuing economic crisis have changed what is considered possible in domestic politics.
“Not many years ago, this was considered on the outskirts, out there, would not happen,” the rep said. Rosa DeLauro (D-Conn.), Who has led efforts to expand aid to low-income children since 2003. “Now it’s at the center.”
“The moment has met us,” DeLauro said.
The proposal also illustrates a key part of President Biden’s new domestic policy agenda. He does not support sweeping plans to restructure politics from the bottom up, of the kind backed by many progressive Democrats. But he moves aggressively to achieve some coveted progressive goals and surprised some of his critics on the left.
The proposal is “very important to the president and vice president,” White House economic adviser Jared Bernstein said Thursday in a presentation hosted by the Washington Post.
The biggest stumbling block to extended family assistance in the past has been the price tag, about $ 120 billion a year for a plan that Biden is proposing. Hillary Clinton’s advisers debated whether she should speak for a similar plan when she ran for president in 2016, but ultimately backed it, largely because of the cost.
However, the amount seems less daunting for legislators in the context of the much larger financial aid package.
The price must be weighed against the heavy costs that child poverty inflicts on society, said Hilary Hoynes, UC economist at Berkeley and expert on poverty.
The National Academy of Sciences study, which Hoynes helped lead, estimated in 2019 that child poverty reduces the country’s long-term economic potential by 4% to 5%, or about $ 800 billion to $ 1 trillion a year by limiting lifetime wages and increasing disease and criminality.
Cutting child poverty would create additional “benefits to society, and the benefits can be quite large,” Hoynes said.
“We have to pay some money today to increase incomes [in the] in the long run, ”she said. “That’s how you have to think about the compromises.”
A plan similar to Bidens would have “by far the biggest impact” on reducing child poverty, the National Academy of Sciences study found after analyzing a wide range of policy proposals.
Such arguments have more impact on lawmakers because of the economic turmoil of the past 11 months combined with the continuing impact of the Great Recession of 2007-2009, said Senator Michael Bennet (D-Colo.), Who along with Senator Sherrod Brown ( D-Ohio) has pushed into the Senate to increase payments to families.
The current COVID-19 recession has meant “the wheels are coming off” for many families, underscoring their “enormous vulnerability,” Bennet said.
“People see the need more than they did before,” he said.
This also applies to some Republican lawmakers.
Plans for extended child payments have had the support of both parties – at least in theory.
The ten Republican senators who recently met with Biden to propose a scaled-down COVID-19 package did not include child payments in their plan, though one of the group, Senator Mitt Romney of Utah, introduced its own plan Thursday, it partly corresponds to Biden’s proposal.
In a Senate speech last weekSenator Marco Rubio (R-Fla.) Mentioned child support as a topic that Republicans and the administration could work on. When Republicans pushed their tax cuts through Congress in 2017, Rubio and Republican Senate Mike Lee of Utah won approval of increased assistance to some low-income families as part of a larger increase in family support.
Democrats and Republicans converge on similar proposals on the subject, but for different reasons, said Samuel Hammond of the Washington Niskanen Center, who has worked with GOP lawmakers on their plans.
Democrats are advocating the idea of increased family support as a measure to fight poverty, Hammond said. Republicans see direct cash payments as a way to stabilize families without a new federal bureaucracy.
The idea of increased cash payments is also gaining support from social conservatives who are concerned about declining US birth rates; some point to Spain, where the abortion rate fell after a significant increase in family support payments.
In the past, conservatives have opposed other forms of family support, such as welfare programs, partly in the belief that such assistance discourages work. It is less concerned with payments per. Child, because they do not phase out, as parents make more money, so there is no incentive to keep earnings below a certain level.
When Canada adopted a similar plan, employment actually increased, Hammond noted.
In addition, Republicans recognize that the idea has the potential to become a hit with voters, and worry that if the GOP does not have its own plan, Biden and his colleagues will have democracy.
“This will be milestone legislation and will be hugely popular,” Hammond said. “Families who get $ 300 per child check in the mail will be very, very visible.”
The Biden plan would build on an existing tax deduction that now mainly benefits family and middle-income families.
Under the current system, families can take $ 2,000 of their tax for each child up to the age of 17. The widespread tax credit gave an estimated $ 118 billion last year to more than 48 million families.
But a tax credit provides the greatest help to those with significant tax liabilities. Families with incomes of up to $ 400,000 per year are eligible for the current tax deduction for children and last year ca. 40% of the benefit went to households with incomes over $ 100,000, according to researchers at the Washington Brookings Institution.
Although Congress has changed the law in the last decade to allow families with little or no tax liability to get some money in the form of a tax refund, only approx. 15% of the benefit last year for families with incomes below $ 30,000.
About 27 million children in low-income families receive less than the full benefit, and many of the poorest receive nothing.
“You have a child credit that is close to universal,” except that “there are tens of thousands of children living in families with incomes that are too low to take advantage of,” Hoynes said.
“When you say it like that, it really does not make sense,” she said.
The bid’s plan would change the law in two major ways: by increasing the credit to $ 3,000 per bid. Child ages 6 to 17 and to $ 3,600 for younger children and by making the entire benefit refundable, which would make all low-income families eligible for the full amount.
Congressional Democrats have worked with the Treasury Department to structure the benefit so families can choose to receive monthly payments rather than wait for a lump sum when filing their taxes – a significant difference for many low-income families.
Sending millions of monthly checks can be a huge burden on the Internal Revenue Service, but Treasury Secretary Janet L. Yellen is “committed to monthly payments,” Bennet said. “We will find a way.”
An expansion of child credit would have the greatest impact in low-income neighborhoods and among black and Latino families who are more likely to be poor.
In the democratic rep. Jimmy Gomez’s congressional district, which stretches from Koreatown through much of Eastside in Los Angeles, will benefit approximately 74,000 children whose parents do not receive the full credit, according to a district-by-district analysis by Sophie Collyer, research director at Columbia University’s Center for Poverty and Social Policy. And in the democratic rep. Tony Cárdenas’ district in the San Fernando Valley would give parents of about 79,000 children the full amount, the analysis shows.
For many low-income families, the money would represent a significant increase in income.
A single mother who earns $ 10,000 a year and has a small child sees only a partial benefit now. Under the new plan, she would receive nearly $ 2,500 in extra income, said Chuck Marr, an analyst at the Washington Center for Budget and Policy Priorities. A parent of two children who has lost his job and his income in the current recession is receiving no child allowance today; under Biden’s plan, he could get up to $ 7,200 depending on the age of the children.
The COVID aid package would only provide the increased benefit in 2021, but Democrats aim to make the change permanent in another round of legislation later this year. That would make family payments the most important part of the total bill, DeLauro said.
“It directly [COVID relief] payments disappear, ”she said. “The extension of the tax deduction for children will be permanent.”
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