The White House Anticipates Surge in U.S. Poverty Rate as Pandemic-Era Child Tax Credit Expansion Ends
The end of the pandemic-era child tax credit (CTC) expansion is expected to cause a significant increase in the U.S. poverty rate, according to the White House.
The Census Bureau is set to release its annual report on poverty, income, and health insurance on Tuesday. The data on poverty will be particularly significant for President Biden as public sentiment about the economy could impact his chances of re-election.
In a blog post on Friday, the Council of Economic Advisers (CEA) predicted a “sharp rise” in the Supplemental Poverty Measure, which takes into account income, benefits, and government programs like tax refunds and food stamps.
The CEA emphasized the importance of looking back at the previous year to understand the potential impact of 2022. The expanded CTC, passed by a Democratic-controlled Congress in 2021, increased the credit for eligible parents to $3,000 per child over 6 and $3,600 per child under 6.
In 2021 alone, the enhanced CTC lifted nearly 3 million children out of poverty and reduced the child poverty rate by more than 40 percent, according to the CEA.
Since the expiration of the expansion in December 2021, Democrats have been unable to reach an agreement with Republicans to reinstate it.
Sen. Michael Bennet (D-Colo.), a proponent of expanding the program, argues that the census data will demonstrate the need to restore the expanded credit.
“When we expanded the Child Tax Credit, we showed that we don’t have to accept high childhood poverty rates as a permanent feature of our democracy. Tomorrow’s data will show that we should have never let it expire, and I’m committed to doing everything I can to bring it back,” Bennet said in a statement to The Hill.
The CEA warns that without congressional action to restore the enhanced child tax credit, the increase in poverty is likely to persist.
Zach Moller, director of the economic program at the center-left think tank Third Way, believes Democrats will seize upon this report to emphasize the necessity of government intervention in fighting childhood poverty.
“The government can definitely combat childhood poverty, but it requires investment. The policies implemented by the Biden administration and Congress in the American Rescue Plan were temporary, so the improvement in child poverty is also temporary,” Moller said.
Reducing child poverty in the long term has been one of Biden’s goals since taking office.
The expanded CTC was a significant element of Biden’s American Rescue Plan, the economic relief bill passed in 2021 after Democrats gained control of the White House and Congress.
With the 2024 election looming, Biden and his fellow Democrats are eager to highlight the benefits of his economic plan, which has been dubbed “Bidenomics.”
Republicans have placed blame on Biden for the recent surge in inflation, although price growth has accelerated globally in the aftermath of the pandemic.
Meanwhile, Biden has been intensifying his critiques of former President Trump regarding the economy, while also seeking to showcase the rapid recovery and robust job market of his own presidency.
Biden and Democratic lawmakers have also highlighted the allocation of trillions of dollars towards infrastructure improvements, lowering drug prices, expanding manufacturing, and addressing tax evasion by the wealthy and corporations.
Messaging about the economy has proven challenging for the Biden administration, as Bidenomics has yet to gain significant traction among Americans despite being a key talking point on the campaign trail.
According to a recent RealClearPolitics polling average, only 38 percent of respondents approve of Biden’s handling of the economy, while 58.4 percent disapprove.
Overall, Biden’s poll numbers have been low recently. A CNN poll released last week found that 46 percent of registered voters believe any Republican nominee would be a better choice than Biden in next year’s election, with his overall approval rating at 39 percent.
Moller believes that Biden’s focus on job creation, especially for low-income individuals, could bring him closer to his goal of reducing child poverty through provisions in his key legislative achievements, such as the Inflation Reduction Act, the infrastructure bill, and the CHIPs and Science Act.
“Expanding manufacturing will be incredibly beneficial for individuals without a college degree. It’s another way of tackling child poverty by ensuring that parents have well-paying jobs,” Moller explained.
The CEA noted in its blog post that the Congressional Budget Office projected in 2021 that the unemployment rate would not fall below 4 percent until the end of 2025. As of August, the unemployment rate stands at 3.8 percent, not far from its pre-pandemic rate of 3.5 percent.
Inflation is gradually improving, a success that the president frequently highlights. However, the CEA expects the census data to show a decline in inflation-adjusted income for 2022.
The agency attributes this to factors such as “elevated pandemic inflation,” as well as issues like the Russian invasion of Ukraine and avian bird flu. The Biden administration is likely to argue that these are temporary setbacks due to the improvements in inflation in 2023.
© 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
