U.S. Childhood Poverty Rate Doubles Since Last Year

What's the story?

• The U.S. Census Bureau's annual data on poverty, income, and health insurance found that the poverty rate in the U.S. has risen drastically since pandemic benefits ended. 
• Most notably, childhood poverty has more than doubled since last year, jumping from 5.2% to 12.4%.

How did this happen?

• Many are pointing to the American Rescue Plan's pandemic-era extensions ending, which gave parents credit for their children and significantly reduced the poverty rate. The American Rescue Plan provides child tax credits based on income levels — the more you make, the more you get. The plan upped payments to $3,600 for each child under six and $3,000 for each child aged 6-17 for lower- and middle-income families.
• The provisions in the Rescue Plan reduced the childhood poverty rate by nearly 10 points in 2021, lifting almost 3 million children out of poverty. When pandemic relief ended, millions of families lost out on a source of income and stopped earning the extra credit. 
• Sharon Parrott, president of the Center on Budget and Policy Priorities, said:

"We sometimes talk about the child tax credit as being an upside down policy. That's because the children who need it the most get the least, while higher income children get more."

• Parents reported using the extra tax credit money on rent, food, and other household essentials. Surveys found that many parents had immediate trouble paying bills and covering basic expenses once the benefits ended, especially with inflation rising. 

The response

• Democrats are pushing to bring back the expanded child tax credit in broader tax negotiations taking place this fall. Several Republicans are also working the credit into their own proposals, but mainly on a smaller scale. 
• Action has been taken at the state level as well. Adam Ruben, from the Economic Security Project, said:

"The surge of energy that we've seen across many states, Democratic and Republican states alike, to boost tax credits, to provide economic security for families this year, has been stunning."

• Biden has consistently called on Congress to restore the Child Tax Credit to preserve national progress toward ending child poverty.
• In response to the poverty rates, Renee Ryberg, senior research scientist at research organization Child Trends, said:

"Ensuring that children have their basic needs met is the bare minimum of what we can and should do. The payoff for the health and wellbeing of our nation's children and for our society as a whole is immeasurable."

Are we doing enough to address poverty?

-Jamie Epstein & Emma Kansiz

(Photo credit: iStock/shironosov)