Millions of Kids in Poverty: The Disastrous Impact of Congress Dropping the Ball on Child Tax Credits

In an era of hot takes and endless news cycles, a truly alarming revelation has been revealed: child poverty surged in 2022. While much was going on in the world, from climate change discussions to the latest celebrity news, an additional 5 million children slipped into poverty last year. Why? Congress let the crucial tax credit expire.

Fresh out from the Census Bureau is a report that paints a bleak picture for the youngest generation. From a comparatively modest 5.2% in 2021, the child poverty rate catapulted to a startling 12.4% in 2022. That’s almost 9 million kids going without basic necessities.

But kids weren’t the only ones bearing the brunt. The supplemental poverty rate, encompassing all ages, experienced a spike, marking its highest one-year rise in history, a chilling record.

To add some context, before the pandemic-driven economic tumult, lawmakers had put provisions in place that seemed promising. They offered a monthly financial buffer to families with children – an expanded child tax credit. Couple that with the expanded Earned Income Tax Credit (EITC) and stimulus payments, and you had a temporary safety net ensuring a decrease in poverty rates. The impact was clear: in 2021, the supplemental poverty rate was at an all-time low of 7.8%.

But then, as the credits expired, the financial pendulum swung in the opposite direction, leaving millions vulnerable. It wasn’t just about the credit cuts; threw in a 7.8% inflation rise between 2021 and 2022, and households found themselves stretched thinner than ever. Amidst this, workers’ real wages declined by 2.2%.

One might wonder: why this staggering change? Simply put, it comes down to policy decisions. Sharon Parrott, from the Center on Budget and Policy Priorities (CBPP), captured the sentiment precisely: “The rise in the poverty rate … underscores the critical role that policy choices play.”

Many had championed the extension of the child tax credit expansion, but the bid was continuously shot down. Most notably, Sen. Joe Manchin and his conservative counterparts played a significant role in this pushback. The effort to revive the credit even in the face of rising poverty met brick walls everywhere, from Democrats to Republicans.

While this partisan tug-of-war was happening in the hallowed halls of Congress, kids and families were suffering. The frustration from those who saw the direct benefits of the credit is palpable. Rep. Jamaal Bowman’s fiery retort to the Census report captures it best: “Because YOU let the child tax credit lapse, child poverty has increased from 5.2 percent to 12.4 percent. Great job. And I mean that with sarcasm and incandescent rage.”

As we reflect on this, a biting truth emerges: policy choices deeply impact real lives. And in this case, millions of children paid the price. How do we move forward from this? The ball is in Congress’s court, but the eyes of millions are watching closely.