March 31, 2022
It seems to not matter if government programs work; or if they actually improve people’s lives. What matters from both sides of the political aisle is what will win elections. Sadly, it is not about effectiveness and humanity, it is about fear and loathing of the “other.”
The fate of the Expanded Child Tax Credit (CTC) serves as one more depressing case study of how programs that work are doomed by the reality of our broken political system.
In the midst of the economic troubles that COVID-19 caused, CTC was seen as an effective way of getting money to struggling families so they could afford the basic necessities of food, rent, and their children’s education. The last round of Pandemic relief legislation expanded the program’s reach to fix a critical flaw in the existing program: it left out those most in need of the aid. Before the program was expanded “one in three children did not receive the full benefit value because their families did not earn enough income to qualify. Children with single parents, those in rural areas, Black and Latino children, and those in larger families were disproportionately ineligible for the full credit…” Expanding CTC fixed this problem.
Early indications were that the expanded CTC had reduced the rates of child poverty. As CNBC reported barely one month after the first checks reached homes “The first installment of the child tax credit lifted 3 million kids out of poverty in July, according to a Columbia University study. That reduction represented a 25% cut in the monthly child poverty rate to 11.9% from 15.8%, according to the analysis…’This is huge for low-income families,’ said Zachary Parolin, a researcher at the university’s Center on Poverty and Social Policy and a report co-author.”
A more comprehensive study of the program’s impact by the National Bureau of Economic Research has now become available. Their review confirmed that the program had indeed helped those most in need and also undercut the major objection to the program, that it encouraged people to remain unemployed. Their research undercut the imagery of the poor as shirkers living off the sweat of others.
The number of people touched by this program is impressive. “From July through December 2021, most families with children in the United States (U.S.) received monthly cash payments of $300 per child under age six and $250 per child between the ages of 6 and 17. The first monthly payment was distributed to families of 59.3 million children in July, while subsequent payments reached more than 61 million children”
They confirmed the earlier findings that it had met its major goal, reducing poverty and economic hardship. In their words, they found that “the expanded CTC did not have negative short-term employment effects that offset its documented reductions in poverty and hardship. “The program did not encourage people to leave their jobs or stop trying to find work. Actually, over the last six months of 2021, while the CTC checks were being received, “ adults in families with children, employment continued to increase even after the first CTC payment in July 2021. Labor force participation among adults in families with children in December 2021 was higher than its pre-CTC value, in contrast to the labor force participation rate of adults in childless families….We conclude that real-world data on employment during the CTC expansion do not support claims that the elimination of the phase-in portion of the CTC discouraged work among parents in any meaningful way, much less that such effects are large enough to offset decreases in poverty and material hardship driven by the expansion’s increased generosity and inclusivity. Our results are, instead, consistent with other real-world analyses of the expansion’s effects, which show observed declines in child poverty (Parolin, Collyer, et al., 2021) and strongly reduced food insufficiency (Parolin, Ananat, et al., 2021). Our results suggest that the mechanism through which these reductions occurred is that the increase in income that was both intended and accomplished through the expansion, combined with a lack of unintended effects on parental work, led to improved well-being for families with children. “
But as of last December 31, the expanded benefits were no more and millions of financially struggling households lost this support. That the program made life better for families did not matter. Efforts to make the expansion permanent by including it in President Biden’s Build Back Better proposal or by having it funded even for one more year by including it in the recently passed government funding bill failed.
The program did what it was intended to do. Funds did get to those it was intended to help. It actually helped them. But this mattered less than electoral optics. Fear of losing the next election made these results irrelevant.
But then, the imagery of the undeserving poor, of those who are taking advantage of the hard work of others, has proven too strong for these facts to be heard. Ten years ago, Mitt Romney spelled his understanding of our nation’s political system: “There are 47 percent of the people who will vote for the president no matter what… who are dependent upon government, who believe that they are victims. … These are people who pay no income tax. … and so, my job is not to worry about those people. I’ll never convince them that they should take personal responsibility and care for their lives.” These words, which then could not to be said publicly, are now quite normal. They are the strings that are plucked to win elections and control the levers of our government.
The demonization of those who are poor was supercharged with the election of Donald Trump. “’ My entire life, I’ve watched politicians bragging about how poor they are, how they came from nothing, how poor their parents and grandparents were. And I said to myself, if they can stay so poor for so many generations, maybe this isn’t the kind of person we want to be electing to higher office. How smart can they be? They’re morons.”
In the debate about extending the CTC for even one more year, facts lost out to electoral sound bites. Republican Senators Mike Lee and Carlos Rubio, in a joint statement issued at the height of the debate over extending the program last year were very clear, “We do not support turning the Child Tax Credit into what has been called a ‘child allowance’, paid out as a universal basic income to all parents. That is not tax relief for working parents; it is welfare assistance….An essential part of being pro-family is being pro-work…[and]… undercutting the responsibility of parents to work to provide for their families.”
Attacking “welfare” plays well for conservative candidates; it evokes the images of black “welfare queens” that have underscored decades of opposition to responding to economic and racial inequality. It riles up insecure white voters who are also stimulated by fears that such wasteful government spending is resulting in a growing federal deficit for a worrying rise in the rate of inflation.
It appears that our elections now hinge on voters who are swayed by this appeal, by those who see the poor as cheats and shirkers. With 2022’s Congressional elections just months away, the Democratic Party bends to these electoral winds.
President Biden’s budget proposal, with those elections as his guide star, no longer includes an expanded CTC among the many former priorities of his 2016 campaign that are now lying in the trash heap. As described by the New York Times, “ Mr. Biden is proposing a 7 percent increase in domestic spending that includes priorities like anti-gun violence initiatives, affordable housing and manufacturing investments to address supply chain issues that have helped fuel rapid inflation. The White House also for the first time proposed a discrete stream of funding for Veterans Affairs medical care. The most notable spending increase was Mr. Biden’s $773 billion military proposal, a 10 percent rise.”
And the Expanded CTC, despite its success, just drifts away; abandoning the millions of children that it has helped.
[…] this year when I wrote that the “The Sad State of Politics Leaves Our Children Behind” we knew that cash payments help reduce poverty among children. ”CNBC reported barely one month […]