Colorado’s Democratic U.S. Senator, Michael Bennet, said he believes the expanded child tax credit which is part of the “American Rescue Plan” will cut childhood poverty in the U.S. by almost 50%. The child tax credit increases from $2,000 to up to $3,600. “And it makes it fully refundable for the first time in history, which means that the poorest kids who've been excluded from the tax credit now will get the full benefit of that,” Bennet told Colorado Matters.
Bennet estimated that 57,000 children will be lifted out of poverty in Colorado, and another 350,000 children who didn’t benefit from the previous tax credit, will be helped.
On The Impact Of Childhood Poverty:
“Having been superintendent of Denver Public Schools, I can tell you that kids living in poverty generally have a much tougher time than kids that aren't living in poverty in this country. They suffer worse health outcomes, worse educational outcomes. They have lower prospects of gaining high paying jobs. They have higher prospects of having children of their own living in poverty. Estimates are that childhood poverty costs the United States of America a trillion dollars a year. And we have one of the highest childhood poverty rates of any industrialized country in the world.”
On Whether Expanding The Child Tax Credit Disincentives People To Work:
“Well, first of all, let me say that this provision polls incredibly well with the American people. 95% of Democrats support it, 73% of Republican support it. So I think it actually does have bipartisan support, even if Washington Republicans mostly have not been able to support it yet. With respect to it costs too much money, childhood poverty costs a trillion dollars a year. This costs a hundred billion dollars a year to cut childhood poverty in half. Columbia University has already put a study out that says that they think the society is going to get an 8X return on this money annually as a result of this, which just makes sense to me because childhood poverty is so expensive to our society and so damaging to kids. It's why, by the way, I am very happy that this country is no longer simply going to tolerate having among the worst levels of income inequality and of childhood poverty of any country in the industrialized world. I mean, that's crazy for us to accept it as a permanent reality. And until this bill was passed, that's how it was being accepted. And on the point about a disincentive for working, the data and the studies are very clear that countries that have a benefit like this for children actually have higher workforce participation rates than the United States. The United States has among the lowest participation rates in the industrialized world. And there's a reason for that in this context, which is we have made it so hard to be poor and to work in this country. And this is going to make it a little easier for people to bring in a little bit more money to help support their kids, to be able to pay for a babysitter so they can stay at work, to fix a car so they can drive to work. I think we're going to see moms in particular who have had to make the choice of quitting their job because they can't afford childcare for their kid, have the chance to stay on in a job and have an increasing income over time. So I think people that say that don't have a grasp on what American poverty looks like and the strides that other countries have taken to eliminate poverty and increase workforce participation rates in their country.”
Read The Interview Transcript
Avery Lill: Senator, welcome back to the show.
Sen. Michael Bennet, (D) Colorado: It's wonderful to be back. Thank you.
AL: You've championed a child tax credit for years because you've said it would help lift children out of poverty. How does this improve their lives?
MB: Well, having been superintendent of Denver Public Schools, I can tell you that kids living in poverty generally have a much tougher time than kids that aren't living in poverty in this country. They suffer worse health outcomes, worse educational outcomes. They have lower prospects of gaining high paying jobs. They have higher prospects of having children of their own living in poverty. Estimates are that childhood poverty costs the United States of America a trillion dollars a year. And we have one of the highest childhood poverty rates of any industrialized country in the world.
AL: And those are problems with childhood poverty, obviously. How does this child tax credit help?
MB: Well, the child tax credit will cut childhood poverty in America by almost 50% by increasing the child tax credit from $2,000 to $3,000, $3,600 for kids under the age of six. And it makes it fully refundable for the first time in history, which means that the poorest kids who've been excluded from the tax credit now will get the full benefit of that.
AL: So the idea is it's money back in the pockets of parents and guardians of these children.
MB: Exactly. In the case of Colorado, 90% of children are going to benefit from this, over a million children all together. 57,000 kids will be lifted out of poverty and 350,000 children in Colorado who don't benefit from the credit will benefit from it now. So for me, having spent the last 10 years traveling to every corner of our state and hearing parents in town halls say over and over and over again, "We are working so hard, but we can't afford housing. We can't afford healthcare. We can't afford higher education or early childhood education. We can't save. We can't start a college fund. Our kids, we worry, are going to live a more diminished life than the life that we lived." I hope this change in federal law is going to create just some measure of security for those families. And I think it will for them and billions of people across the country.
AL: You just alluded to a child tax credit that has existed for years. How is this child tax credit included in the American Rescue Plan different?
MB: It's very different. It's different in size because it's no longer $2,000 per kid. It's $3,000 per kid, so it's fully a third bigger. It is fully refundable, which means that the poor kids that were excluded, believe it or not, because their parents didn't earn enough money to qualify for the credit, now will be eligible for the credit. And it will be paid out in a monthly basis, which is different from the current credit, which is paid out on an annual basis. So I think that's going to allow families to have a much smoother cash flow throughout the year that will help them pay their monthly bills more easily.
AL: And why make that monthly? Tell me a little bit more about why that was important to you rather than having a lump sum.
MB: It's been very important. It was actually in my original bill, and I'm very, very glad the Biden administration included it here, because families don't spend money on an annual basis. Families spend money on a daily basis and they've got to pay their bills on a monthly basis.You're trying to decide how to pay your rent or to pay for food and to pay your mortgage. This will enable them to be able to do that in a way that I think is much more consistent with the way families live their lives.
AL: You've wanted to pass this expansion of the CTC for years, just like the minimum wage increase. How did this end up as part of the American Rescue Plan, but the minimum wage increase fell by the wayside?
MB: It's a very interesting question. Sherrod Brown and Cory Booker and I spent the entire weekend, the last weekend, lobbying the White House to put it in. Rosa DeLauro from Connecticut in the House did as well. And I'm very glad that they did. I don't know. Actually, I do have an answer on the minimum wage, which is that the parliamentarian said that we couldn't do it with reconciliation, which was the procedure that we were using to pass the bill, but this provision passed the parliamentarian's muster, and therefore was included in the bill.
AL: This tax credit, it doesn't apply to everyone. The law stipulates that it only applies to children who are US citizens or lawful residents. Does that mean that the child tax credit is cutting out a large part of the population of people who are very susceptible to childhood poverty?
MB: Well, it's written to be consistent with existing law with respect to Social Security numbers and ITN numbers. And so I think we made progress there, but you're right, there's more for us to do.
AB: Many Republicans, they want to expand benefits for children, but some are opposed to this child tax credit because they say it costs too much, and since it's not tied to income, it disincentivizes work. How do you answer those concerns?
MB: Well, first of all, let me say that this provision polls incredibly well with the American people. 95% of Democrats support it, 73% of Republican support it. So I think it actually does have bipartisan support, even if Washington Republicans mostly have not been able to support it yet. With respect to it costs too much money, childhood poverty costs a trillion dollars a year. This costs a hundred billion dollars a year to cut childhood poverty in half. Columbia University has already put a study out that says that they think the society is going to get an 8X return on this money annually as a result of this, which just makes sense to me because childhood poverty is so expensive to our society and so damaging to kids. It's why, by the way, I am very happy that this country is no longer simply going to tolerate having among the worst levels of income inequality and of childhood poverty of any country in the industrialized world. I mean, that's crazy for us to accept it as a permanent reality. And until this bill was passed, that's how it was being accepted. And on the point about a disincentive for working, the data and the studies are very clear that countries that have a benefit like this for children actually have higher workforce participation rates than the United States. The United States has among the lowest participation rates in the industrialized world. And there's a reason for that in this context, which is we have made it so hard to be poor and to work in this country. And this is going to make it a little easier for people to bring in a little bit more money to help support their kids, to be able to pay for a babysitter so they can stay at work, to fix a car so they can drive to work. I think we're going to see moms in particular who have had to make the choice of quitting their job because they can't afford childcare for their kid, have the chance to stay on in a job and have an increasing income over time. So I think people that say that don't have a grasp on what American poverty looks like and the strides that other countries have taken to eliminate poverty and increase workforce participation rates in their country.
AL: It's interesting, you said that the country is no longer going to tolerate high rates of childhood poverty. Tell me what you mean by that.
MB: I think that we were treating it like it was just a feature of American life or a feature of the American economy. And I don't accept that. That's why I've been working on this for so many years, and it's the reason I came out of being superintendent of the Denver Public Schools believing very strongly that the amount of childhood poverty we have in this country is really an indictment of of us, and we didn't have to accept it and we don't have to accept it. And I think what I meant by that is that I believe, in some sense, we were getting to a point where people didn't believe that government could ever do anything useful for them, that it was all focused just on special interests or on the wealthiest Americans or on the biggest corporations. And now we've passed something that's the most progressive piece of tax legislation that's actually passed in generations and generations. It's the biggest reduction of childhood poverty in the history of the United States. And I think it's evidence, it's a demonstration that we don't have to accept things the way they are. And we've got a lot of work ahead of us, from healthcare to climate, infrastructure investment, to try to end childhood poverty, which ultimately is what I would like to do. And this shows that it's possible.
AL: The expansion of the child tax credit and the American Rescue Plan is temporary, and it will end next year. Additionally, the monthly payments will only last for six months. What happens after those six months?
MB: I think we have to make it permanent. And I believe there is a coalition that's coming together around this provision that will make it permanent. Last weekend, the White House chief of staff, Ron Klain, said we should make it permanent. Chuck Schumer last week said we should make it permanent. My friend Mitt Romney, who's a Republican, has a version of this bill that's actually more generous than the tax credit that I put forward, except I don't love the pay fors that he has in it. So I think there's a lot of opportunity for negotiation, for debate, and create an opportunity, maybe even in the next reconciliation package, to make this permanent.
AL: Senator, thank you so much for your time.
MB: Thanks a lot for having me. I appreciate it.
