For more than eight years, Colorado Sen. Michael Bennet has been trying to expand the Child Tax Credit and help lift kids out of poverty. It was an idea that he finally saw fully realized last year —for all of six months.
“Here we had a case where tax cuts for working people and poor people weren’t [extended] and Congress went home. And I think it’s a disgrace,” Bennet said.
The pandemic-relief package, known as the American Rescue Plan, expanded the Child Tax Credit for one year, made it fully refundable, so the poorest families could benefit, and for the last half of 2021, sent it in the form of monthly checks to families, turning it into a reliable income supplement.
The maximum total expanded credit was worth $3,600 per child 5 years old and under, and $3,000 per child ages 6 to 17, with the amount falling for higher-income households.
Bennet’s frustration that the expanded benefit was not made permanent, or even just extended, is palpable.
“Unfortunately, it’s a reflection of the priorities around here,” he said. “Since 2001, we've cut taxes by almost 8 trillion [and] almost all of that has gone to the wealthiest people in the country.”
Opposition to making the tax credit into a permanent monthly benefit comes from several directions. Some see it as essentially a giant welfare program, one that could encourage people not to work if parents and caregivers aren’t required to be in the workforce to get it. Others are concerned about the ongoing budget impact of creating such a large new safety net benefit.
Studies of last year’s expansion found it may have temporarily lifted as many as 40 percent of poor kids to above the poverty line. And despite the fears of critics, many economists noted getting the tax credit did not appear to disincentive work for parents.
Bennet said the expanded child tax credit has proved its value.
“We now have evidence in America that people spend the money… on clothing, on rent, on food. What I hear from the families more than anything else is the degree to which it relieves stress.”
A 'huge disappointment' for Ayesha Bogart, a mom and disabled veteran
“It gave me breathing room where there just wasn’t any,” said Ayesha Bogart. The mother of three, including a 14-year-old and a 13- year-old, is a disabled Army veteran, who cannot work.
Talking around the dining room table of her rented Colorado Springs home, Bogart explains how taking care of her aging mother has become a full-time endeavor. When she and her kids got the credit, the extra money became the highlight of the family’s trip to the grocery store.
“It helped us to have, like, vegetables, you know, or garlic or, like, onions or fresh fruit and stuff,” she explained. That produce supplemented the shelf-stable products she picked up from the food bank and the drawer of MREs [Meal Ready to Eat] left over from her Army days. Now the inside of her fridge is back to bare bones.
More importantly for Bogart, it meant her two youngest kids could participate in team sports for the first time because she could cover the fees. Now that the monthly payments are over, she said it’s a “huge disappointment.”
“I was finally starting to feel like I had my feet on solid ground — being able to make rent payments and the car payment and not having to make a choice. I felt like I was, I was going to be okay.”
The hardest part, she said, was telling her kids they couldn’t both continue on their sports teams.
'That extra $300 just made it a little easier' for Denver mom Katie Dunn
In Denver, Kaite Dunn said the credit helped her and her partner, Omar, pay for childcare for their 4-year-old son while they were working.
“[It] is a very big expense. And I think even just having that extra $300 a month just made it a little bit easier to pay for that and to not feel like everything was as tight,” she explained.
Half of Dunn’s take-home pay goes towards child care. She is a social worker while her partner works for the Denver Public Schools. They own a home in a good neighborhood and live what is by all measures a middle-class existence. And yet, they still live pretty much paycheck to paycheck.
The stalemate over renewing this tax credit makes Dunn feel like many members of Congress really don’t understand the struggles of families.
“Whatever lip service they give, it's like, no, you don't, you don't actually understand what families are dealing with and how it is impacting their lives.”
And she knows she is one of the lucky ones; many of her clients who benefited from the expanded credit are back to struggling.
For all the critics who argue the government should be giving a hand up, not a handout, Dunn said this child tax credit is both. She tells the story of one of her clients, a single mom also with a 4-year-old.
“She works long days, so she's paying for before-care and aftercare. Rent is going up for her. She's trying to figure out a new living situation. Like, she's working hard and that hand up, that $300 a month, it is a big difference. Whatever financial struggle she's having is not that she's not working hard, you know?”
Theirs are exactly the situations Bennet envisions the tax credit helping
“I think sometimes there's not an appreciation for how hard we've made it to be somebody who's working and poor in this country,” Bennet said.
Bennet and other Democrats who are fighting for a permanent expanded child tax credit had hoped to get it done through a budget process called reconciliation, which would only require a simple majority to through the Senate.
Fellow Democratic Sen. Joe Manchin of West Virginia dashed those hopes last December when he opposed the package Democrats were negotiating.
“Senator Manchin has always supported the existing child tax credit that is still in place,” a Manchin spokesperson said (that is currently a maximum of $2,000 per child distributed annually). “He continues to support policies that reward hard-working families as the effects of costly inflation strain their budgets. He has also made it clear that any change to our social safety nets should move through regular order.”
Bennet argued “regular order doesn't work” in the Senate of today because it requires at least 10 Republicans to sign on. And if Manchin and others are worried about how inflation is impacting families, Bennet said that’s all the more reason to make the credit permanent, so they have more money to deal with the higher costs.
A slow path toward progress?
Bogart, Dunn and others appreciate the efforts of the senators who are still trying to make the larger monthly credit permanent. While Bogart is hopeful it will come through, Dunn is not counting on it.
Watching Bennet champion this cause for years, including making it the heart of his failed presidential run, it seems at times like he’s screaming into the void. But he said it doesn’t feel that way to him, mainly because he has gotten to see it in action, if only for six months.
“How many people around here can say that something that they have been fighting for all these years actually got put into policy and worked? Not many people can say it and I'm glad we were able to get it done,” he said.
Bennet remains optimistic. He thinks an expanded child tax credit will happen, it’s just a question of when.
“I'm inspired by the families that I've met that benefited from it and inspired by the possibility that is posed by Mitt Romney and others that are working on this, that we can do this in a bipartisan way.”
Bennet said he’s been talking with Utah Republican Sen. Romney, who has his own version of an expanded child tax credit. They agree on the size of the credit, that it should be fully refundable and monthly. But they differ over how to pay for it.
Finding bipartisan agreement can be a long, hard slog, especially in these partisan times, and especially with an election looming that is already pulling in lawmakers' attention. Bennet himself is up for reelection in the fall.
“I'm not giving up. And I don't think we should give up. And I, frankly, I'm not giving up until we have an economy that when it grows, it grows for everybody, not just the people at the very top. And I think we can do that too,”
And he said he’ll be armed with six months of data to back up his points and show the expanded child tax credit’s success.
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