What We Stand to Gain in the Proposed Bipartisan Child Tax Credit Expansion

Sammi Goldsmith
January 29, 2024

In 2021, the American Rescue Plan Act included an enhanced Child Tax Credit (CTC) that provided families with up to $300 per child per month to help with costs associated with raising children during a time of increased economic stress. Surveys from households who received the enhanced CTC revealed that most families spent their additional resources on food and groceries, enabling them to keep their kids fed and avoid falling deeper into poverty and hunger. Predictably, financial strain on families returned when the enhanced credit expired at the end of that same year. 

Since then, we have witnessed a deplorable and preventable spike in child hunger and poverty across the country that threatens lives and futures. The poverty rate for children more than doubled from a historic low of 5.2 percent in 2021 to 12.4 percent in 2022, reversing the progress made by policy changes like the enhanced CTC over the previous two years. We know that charity alone cannot solve hunger and that only tangible, long-term policy change can truly address a problem as complex and widespread as food insecurity. Like SNAP and WIC, the CTC is a safety net program that demonstrates the power of the federal government to reduce hunger in this country. Yet, despite clear evidence that the enhanced CTC markedly improved the health and wellbeing of millions of families, Congress failed to preserve it. 

Until last week, when a House committee advanced a bipartisan bill negotiated by Senate Finance Committee Chair Ron Wyden and House Ways and Means Committee Chair Jason Smith to expand the current CTC, a proposal that would deliver a meaningful income boost to millions of families in need.

Our tax code currently denies 19 million children the full CTC benefit because their household earnings are too low. With the bipartisan Wyden-Smith proposal, our partners at the Center on Budget and Policy Priorities (CBPP) estimate that 80 percent — roughly 16 million — of those children would be helped. In its first year, they estimate 400,000 children would be lifted out of poverty and the incomes in poor households of an additional three million children would increase. This would particularly help children in Black, Latino, and Indigenous families who face historic, compounding barriers to economic opportunity, as well as many children in households headed by a single mother who face staggeringly high rates of food insecurity. 

While this proposal falls short of the expansion in the American Rescue Plan Act and fails to reach all low-income families with children in need of economic support, we believe it is a meaningful and urgent step forward in the fight against child hunger and poverty.

Improving the CTC, and ultimately making it fully refundable and permanent, will allow families to plan for the future with confidence that the federal government will be there to support their children’s growth and development. Expanding the CTC is a common sense and smart investment that will better the lives and futures of our nation’s youth and benefit us all. Surely this is an appropriate responsibility of the federal government that we can all support.

Your voice matters at this critical moment! Join MAZON in urging Congress to immediately pass the bipartisan Wyden-Smith Child Tax Credit plan and support continued efforts to address child poverty and hunger.