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What happened to those in poverty with the child tax credit expansion ended?

Advocates are angered over the loss, but many Americans weren't in favor of it.

Samantha Rodriguez of South Philadelphia was one of many Americans who relied on the federal government's child tax credit expansion, which has ended.
Samantha Rodriguez of South Philadelphia was one of many Americans who relied on the federal government's child tax credit expansion, which has ended.Read moreJOSE F. MORENO / Staff Photographer

Federal payments that kept millions of families out of poverty have expired without Congress allowing them to continue, plunging people in need back into a state of indigence they believed they’d never have to endure again.

“It’s foolish and short-sighted and unconscionable,” said Beth McConnell, director of policy in Philadelphia’s Office of Community Empowerment and Opportunity. “We are literally taking food out of children’s mouths.”

The Biden administration’s one-year expansion of the child tax credit (CTC) starting last July was meant to help families navigate the pandemic with cash infusions of as much as $3,000 a year per child ages 6 to 17, and $3,600 a year per child from newborn to age 5.

The expanded CTC has especially helped the poorest Americans. To get the credit before the expansion, households had to earn at least $2,500 annually, omitting those who didn’t make that much.

Under Biden’s plan, however, the CTC became fully available to all those in poverty, regardless of income.

But now, as the omicron variant proliferates exponentially, that lifeline has been snatched back, allowing those in poverty to languish without a means of survival they’d grown to depend on, advocates and low-income people say.

“It’s definitely a hardship,” said Samantha Rodriguez, 28, a South Philadelphia child-care worker with a 6-year-old daughter. She’d been receiving a CTC payment of $250 a month that started in July and ended last month.

“That money was paying for our food,” said Rodriguez, who described herself as a single mother making less than $20 an hour. She has a master’s degree in business and is enrolled in a teacher’s certification program. Her goal is to some day open a charter school to help children with special needs. But Rodriguez is yoked to student debt of $90,000, making economic survival precarious.

“I’ll have to figure out now how we eat,” said Rodriguez, who’s applied for a second job as a driver for Uber Eats. “I’m determined not to have to go to food pantries for help.”

Some relief expected

Overall, Mai Miksic, early childhood policy director for Philadelphia-based Children First (formerly Public Citizens for Children and Youth) predicts “longer lines at food pantries, and people relying more on community-based programs that give out diapers and clothing.”

As dire as life might get, there will be some short-term relief, however small.

The CTC expansion was supposed to be for 12 months. That means those who’ve received payments between July and December of 2021 are still owed another six months of cash.

But, there are two conditions. First, the money will be given only to people who file their 2021 income taxes this year. That could be a problem because many low-income people don’t ever file, often because they don’t make enough. Many of these individuals were allowed to sign up for the CTC in 2021 by using a “non-filer” portal on the government website.

But, advocates say, the “non-filer” option will no longer be available, and people will have to file traditional tax returns, something those in poverty may be unable to do because they’re unfamiliar with it, or can’t afford filing help. Tax services for those in poverty are available.

Second, even if people do file their taxes, the CTC won’t be mailed to them in monthly installments as it was last year. Instead, the money will come in one lump sum, like a tax refund after being processed by the IRS, making it more difficult to meet monthly bill payments.

“I intend to file my taxes to get the remaining six months’ payments,” said Susann Ali, 38, a Head Start teacher from Germantown. “But until then, we are without money that was helping me pay my three kids’ Catholic school tuition.”

And after those payments are completed, Ali said, she worries that Congress won’t restore the help she’d grown to rely on:

“I thought that by now, they’d have extended the credit, and I’m scared it might not ever happen.”

Expected popularity

The expanded CTC was expected to be so popular that Congress would automatically renew it for 2022 and beyond.

But so far that hasn’t happened, despite continued efforts to do so. And surveys show that not all Americans like the idea. A December Morning Consult/Politico poll discovered that just 47% of Americans favored extending the expansion, as opposed to 42% who were against it.

More important, Sen. Joe Manchin (D., W.Va.) said he wouldn’t support the credit expansion going forward without a work requirement attached. Manchin’s vote is key in an evenly split Senate.

That view is espoused by conservative entities such as the American Heritage Foundation, which explains that extending the expansion in 2022 would actually stymie anti-poverty efforts by persuading people not to work, but simply collect government funding.

That’s a minority view.

In a widely recognized study last fall, Columbia University found that “the enhanced CTC has had no negative impact on workforce participation among parents.”

Columbia research also discovered that the augmented tax credit kept nearly four million children out of poverty and that food was the top item families spent their federal money on.

“If one of the goals was to reduce child poverty, the expanded credit was tremendously successful policy,” said Temple University sociologist Judith Levine, director of the school’s Public Policy Lab.

“But now children are being thrown back into poverty and the timing is terrible with the pandemic surging and parents having to stay out of work to be with their children as schools and child-care centers close.”

The end of the expanded CTC won’t halt the typical CTC that families have been receiving for years. But it will mean less money. The expanded CTC grew to amounts of $3,000 to $3,600 per child. The normal CTC was around $2,000, and given in one lump sum.

`Legislative violence’

Congress’ failure to expand the CTC beyond 2021 rankles experts on poverty and inequality.

“Allowing the expanded child tax credit to expire is yet another demonstration of the U.S. government’s intentional neglect of families with children, a clear example of legislative violence,” said Mariana Chilton, director of the Center for Hunger-Free Communities at Drexel University’s Dornsife School of Public Health.

Chilton espouses universal basic income, a proposed government program in which every adult citizen receives a set amount of money regularly.

The failure to make the CTC expansion permanent “means a moment of optimism in which deep injustices and hardships could have been changed may be over,” noted University of Pennsylvania sociologist Pilar Gonalons-Pons.

And, Levine said, the United States, “which fails miserably at reducing child poverty, loses an opportunity on the world stage to catch up with peer nations that treat children and families better.”

That failure resonates with Mia Thomas, 37, the unemployed mother of a 13-year-old daughter in West Philadelphia.

The expanded CTC had allowed Thomas, who suffers from multiple sclerosis, to attain something rare in her life: a bank account.

“The money was a godsend that allowed me to actually create a small nest egg,” she said. “But now, I’m straining without the monthly payments to make rent and pay bills.

“I’ll still try to keep my bank account. But it’s going to be a struggle.”

The Philadelphia Inquirer is one of more than 20 news organizations producing Broke in Philly, a collaborative reporting project on solutions to poverty and the city’s push toward economic justice. See all of our reporting at