The Center on Poverty and Social Policy at Columbia University (CSSP) recently released a brief that offers a sobering analysis of what child poverty rates could have looked like in 2023 if the expanded Child Tax Credit (CTC) from 2021 had been maintained. The brief provides insights into the role that policy decisions play in shaping the well-being of millions of children across the United States.
Key Findings: A Missed Opportunity
Rising Poverty Rates: From 2022 to 2023, the Supplemental Poverty Measure (SPM) child poverty rate rose from 12.4% to 13.7%. This is significantly higher than the historic low of 5.2% seen in 2021, a year when the expanded Child Tax Credit was in effect. In real numbers, approximately 6.2 million more children were living below the poverty line in 2023 than in 2021.
Current Policy Impact: The existing Child Tax Credit policy, even without expansion, played a role in reducing child poverty. It lowered the child poverty rate by 17.1%, keeping 2 million children out of poverty in 2023. However, while impactful, it falls short of what could have been achieved.
Potential of an Expanded Child Tax Credit: If the expanded Child Tax Credit, similar to what was proposed in the 2023 American Family Act, had been implemented, the child poverty rate could have dropped to 8.6%. This would have represented a 47.8% reduction in child poverty, keeping an additional 5.6 million children out of poverty in 2023.
A Significant Reduction: Compared to current policy, the expanded CTC could have reduced child poverty by 37.1%, meaning an additional 3.6 million children would not have lived in poverty in 2023. This dramatic reduction underscores the powerful role that targeted financial policies play in improving the lives of vulnerable families.
The Broader Impact of Policy Decisions
The findings highlight a significant missed opportunity to continue lifting children and families out of poverty. In 2021, the expanded Child Tax Credit was instrumental in reducing child poverty to its lowest levels in U.S. history. Yet, as policy makers scaled back the credit in subsequent years, millions of children once again found themselves living below the poverty line.
Beyond the immediate financial relief it provides to families, an expanded Child Tax Credit also contributes to broader economic stability. When families have more disposable income, they can invest in essential needs such as food, healthcare, and education. In turn, these investments support children's long-term development, health, and overall well-being.
Conclusion
The CSSP brief serves as a stark reminder that child poverty is not an inevitable reality but rather a result of policy choices. The expanded Child Tax Credit proved its effectiveness in 2021, and had it been in place in 2023, millions more children would have been lifted out of poverty. As policymakers debate future economic policies, the data from this brief should weigh heavily on their decisions, as it provides clear evidence of how impactful the right policies can be in shaping a better future for the next generation.
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