The Expanded Child Tax Credit: A Pediatrician’s Perspective and Call to Action

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May 30, 2024

By Céline Sparrow, MD, FAAP

Dr. Céline Sparrow headshot
Dr. Céline Sparrow

“Tengo hambre,” (I’m hungry), my 4-year-old patient cried from her pregnant mother’s lap. I called the food pantry, but it was closed on a Saturday. 211, the hunger emergency line, yielded a busy tone. Would the 4-year-old eat dinner that night? How would the mother’s skipped meals impact the health of her growing fetus? Later that week, I passed a Brooklyn food pantry, and saw the line wrap around the block while heavy clouds filled the sky. How long would families wait in the rain for food? Wasn’t there an alternative?

As a pediatrician working in over-burdened, under-resourced neighborhoods, I see child poverty as a leading cause of health complications in my patients. While safety net programs such as the Supplemental Nutrition Assistance Program (SNAP) and Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) provide essential nutrition support, they may be insufficient and have barriers to participation. For example, despite receiving WIC assistance, several mothers have told me they added extra water to formula to make it last longer, not knowing an incorrect ratio could induce seizures in their newborns. Counseling mothers to mix formula appropriately may reduce this risk in the short-term, but still leaves such families without adequate formula for the month. A renewed expanded federal Child Tax Credit is an evidence-based, sustainable solution to combat this and other harms of child poverty.

According to the U.S. Census Bureau, the national child poverty rate was 16.3% as of December 2023, and exceeds one out of five children in Alabama, Arkansas, Louisiana, Mississippi, New Mexico, and West Virginia. Children of color are disproportionately represented due to a host of systemic racism-related barriers to the accumulation of financial assets.

The original Child Tax Credit (CTC) was established in 1997 to provide a modest, non-refundable credit for middle-income families raising children and has been expanded multiple times with bipartisan support. During the pandemic, the federal government’s American Rescue Plan (ARP) significantly expanded the eligibility and generosity of the credit, no longer requiring families to have earned income or owe taxes to access the credit. With the temporary expansion, the IRS was able to deliver funds to the families of 62 million children with a 98% payment accuracy rate, cutting child poverty in the United States almost in half. Data show that once the expanded CTC expired in 2022, child poverty rates soared right back up from 5.2% to 12.4%. In a key report from the Center on Poverty and Social Policy at Columbia University, Dr. Megan Curran explains that with this reversion to the pre-pandemic policy, one out of three children nationwide — including one out of two children of color — “risk being excluded from the full credit once again.”

Yet, unlike waiting in line in the rain at the food pantry — a temporary and time-consuming solution — the expanded CTC helped families address their basic needs on any day, rain or shine. With less time spent in line, parents would have more hours in the day to work and care for themselves and their children, demonstrating a true benefit for society. A cost-benefit analysis showed that a renewed expanded CTC would generate a nearly 10-fold return on investment. Societal benefits included increases in children’s future earnings in adulthood, tax recuperation from these higher earners, substantial increases in child health and longevity, crime reduction, and decreased healthcare costs due to healthier parents and children.

The evidence supporting direct cash payments to families for improved child health outcomes is substantial. Several studies have demonstrated decreases in low birth weight, increased rates of prenatal care, and declines in maternal smoking. A Brookings Institution report showed the expanded CTC in 2021 improved families’ healthy food choices and nutrition. Both Pediatrics and The Journal of the American Medical Association (JAMA) published studies on decreased child maltreatment and neglect-related events following the monthly payments. With so much economic and health-based evidence to support the expanded CTC to reverse child poverty, why did Congress allow it to lapse?

Since the expiration of the expanded CTC in 2022, a growing number of states have improved or passed their own child tax creditMinnesota’s newly established CTC, currently the most generous in the country, is expected to cut child poverty in the state by one-third. New York State’s credit, known as the Empire State Child Credit, previously excluded children under 4, but was updated in 2023 to expand eligibility to these youngest children. Colorado’s “Family Affordability Tax Credit,” was passed by the state legislature in early May of this year, and could cut child poverty in the state by one-half once signed by the governor.

While gridlock in Congress has prevented a full renewal of the expanded CTC, this year the House overwhelmingly passed the Tax Relief for American Families and Workers Act of 2024 with bipartisan support. Although not nearly as impactful as the expanded CTC of 2021, it would provide cash payments to nearly 16 million children in low-income families who, prior to the expansion, did not qualify for the full credit amount. It would also account for inflation, which is essential to maintain the value of the credit. Echoing UNICEF’s support for cash transfers to address child poverty globally, President Biden has called for renewing the expanded CTC and is expected to support this legislation. However, the bill is stalled in the Senate, with some senators expressing concern that the payments would discourage families from working and might encourage irresponsible spending. These concerns are unfounded. Columbia’s report showed that receiving CTC cash payments did not affect the number of hours that parents worked. In fact, in New York City, a modest but statistically significant increase in hours worked was reported. Data also show the monthly payments were mostly used to buy food, and cut food insufficiency, defined as the inability of a family to afford enough food to eat in a seven-day period, by nearly 26%. 

As a pediatrician, I know that my patients who experience poverty and hunger face the risk of poor health outcomes not only now, but long into their futures. I urge all people who care about the health and well-being of children in the United States to educate themselves about the federal CTC, as well as their state child tax credit, and to let their elected representatives know how they feel about these powerful supports for families.

Dr. Céline Sparrow is a board-certified pediatrician and fellow of the American Academy of Pediatrics. Her piece reflects her opinions and views only and does not represent the opinions or views of the institutions she works for. The author would like to acknowledge Dr. Megan Curran and Dr. David Harris at the Columbia Center on Poverty and Social Policy for their research on which this piece draws extensively.

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