A mom in Collegeville has been using her extra $250 a month to send her 3-year-old son to preschool. A dad near Pittsburgh says it helps with the gas bill.
In Philadelphia, Sakinna Walls set aside some of her monthly child tax credit for Christmas gifts — a video game for her teenage son, nail polish and makeup for her 12-year-old daughter.
That extra cash from the government is now set to expire with the apparent collapse of negotiations on the Build Back Better Act, which would have extended the credit.
For Walls, 33, a single mother of four who lives in West Philadelphia, getting by even with the credit was a struggle.
“It’s gonna be even more of one if it goes away, trying to find where the next week’s grocery money is gonna come from,” she said.
Across the country, parents getting used to the benefit, about as much as $300 a month per child, might have just received their last installment. Without it, antipoverty activists say, as many as 10 million children could fall back below the poverty line.
(Parents will still get a one-time lump sum when they file tax returns for the amount owed to them from January through June.)
The child tax credit was expanded under President Joe Biden’s American Rescue Plan this summer. In years past, parents got up to $2,000 per child, but it was available as tax relief the following year. Biden’s plan raised the benefit to up to $3,600 per child, transmitted in monthly cash payments. It also expanded to cover nearly 90% of children, or 65 million kids. But the tax credit’s future was tied to the passage of the Build Back Better agenda, the massive social spending bill that Sen. Joe Manchin (D., W.Va.) effectively killed this week when he said he wouldn’t support it.
Republicans, who unanimously opposed the legislative package, have said it disproportionately benefited constituents of progressives and would raise inflationary spending. Manchin has said he wanted a smaller bill and specifically pointed to the child tax credit as part of what shaped his decision.
Manchin has said the credit should only go to working parents and have more income restrictions. Currently the credit is $3,600 for children 5 and under and $3,000 for children 6 through 17. The advance payment amounts decreases in stages for individuals earning more than $75,000 or couples making more than $150,000. The benefit drops to $2,000 per child for individuals earning making up to $200,000 or couples making up to $400,000.
Manchin has also questioned how parents are using the money, telling fellow senators, according to reports, that he worried some might spend the money on drugs.
Antipoverty activists have said that ignores research that shows parents using aid for food, clothing, utilities, and childcare.
Carrie Miller, a part-time child and family therapist in Collegeville, has been receiving the credit for her 3-year-old son, Oliver.
“My husband and I are both working professionals with advanced degrees and we can barely handle one child,” Miller said. “All the expenses and the scheduling challenges that come with two working parents and one child — and we have pretty good income relatively speaking — is hard.”
In part because of its name and how it’s distributed, there’s been a disconnect over the program since it started. It’s called a tax credit but arrives as cash monthly. And parents who file taxes are auto-enrolled, so some were getting disbursements without knowing what it was.
“They’re happy to have it there but they don’t necessarily know where it came from,” said U.S. Rep. Susan Wild, a Democrat who represents parts of the Lehigh Valley.
There’s also been a lag getting the program to the families in deepest poverty; those parents often weren’t automatically enrolled because they have low or no income and don’t have to file federal income tax returns. Kris Cox, of the Center on Budget and Policy Priorities, a progressive think tank, said it’s possible the program expires before ever reaching the families who need it most.
Walls, the Philadelphia mom, didn’t know she qualified until she linked up with Community Legal Services, which helped her get the credit starting in September. She was working as a home health aide before the pandemic but stopped to take care of her kids when schools closed. She’s living with relatives and trying to provide for her four children on $500 a month in Social Security plus SNAP benefits.
If the payouts are resumed but require parents be employed, Walls would no longer qualify.
Kathy Fisher, director of governmental relations at the hunger relief nonprofit Philabundance, said the credit has been essential for low-income families who make just enough to now qualify for aid but are still struggling to cover the rising cost of food.
That would include Lolita Owens, who makes $12.95 an hour as a home health aide, which puts her just over the income limit for SNAP benefits. She’s been using the child tax credit to buy groceries for her and her 16-year-old son and protective gear to keep her safe at work.
“Some people might say that’s a lot of money, but when you’ve got rent, you’ve got utilities, when you don’t get food stamps and you’re paying for everything out of pocket … that can be a lot of money,” Owens said. “We already live paycheck-to-paycheck and COVID didn’t do anything but aggravate the worries we already have. Having the CTC has helped a lot of families be able to survive just a little bit.”
Democrats have tried promoting stories like Owens’ to build support for an extension. Last week, U.S. Reps. Madeleine Dean (D., Montgomery) and Dwight Evans (D., Philadelphia) spoke at a Zoom town hall about the child tax credit. A few people shared stories of how the credit had helped them.
But it’s unclear who the political events are reaching.
“I give the Democrats an A on policy and like a D- on messaging,” said Joel Berg, CEO of Hunger Free America, a New York-based nonprofit. “Effective politics is also effective policy — improving real-life conditions for real-life people — and Democrats have been really lousy at explaining how they’ve done that.”
For people struggling with poverty, getting involved politically can be impossible, said Fisher, of Philabundance. “Who has the time to call?” she said. “For families in crisis … they’re trying to get by.”
But parents are likely to notice when the monthly credit disappears. They’ve already been raising concerns across the state.
Joseph Phillips, a father of two who lives in Brownsville, near Pittsburgh, wrote a letter to his local newspaper, the Uniontown Herald Standard, in support of the credit’s extension. He earns $12 an hour as a substitute teacher.
“We bought more fruit and vegetables, a backpack, clothes, shoes, things our kids need,” he wrote.
Wild said her congressional office is getting inundated with calls from parents of the 134,000 kids getting the credit in her district. U.S. Rep. Chrissy Houlahan, a Democrat who represents Chester County, has also heard from hundreds of parents, including a mom who used the money to buy her daughter a bed.
“These aren’t frivolous things,” Houlahan said.
The political fallout from the apparent collapse of the bill remains unclear. There’s a chance Democratic lawmakers will pull the child tax credit out of the larger spending bill and try to pass it on its own.
Miller, the Collegeville mom, volunteers with the progressive political group Moms Rising, and predicted backlash against Republicans who unanimously opposed the bill.
“Even if they didn’t show up to vote before, we’re going to be so peeved by this we’re going to motivate and mobilize the working parents to vote,” she said. “And nonworking parents, too … We all need help.”