Many millions of Americans are starting to get monthly government checks to take care of their children.
🎬📺 Free Movies and Free TV Shows! 🎭🎬
Looking for a similar government program with the power to influence poverty in AmericaI came up with three: Social Security, Medicare, and the Affordable Care Act.
With Social Security, the government ensures that older Americans do not fall into poverty. With Medicare, it makes sure they have health insurance. With the Affordable Care Act, it helps other people who need it to buy health insurance.
Now it’s trying to make sure American kids get money every month. This is a very big problem. But it’s a year-long experiment for now, unless Democrats can figure out how to force it back through the Senate and make the vastly expanded credit permanent.
Most parents qualify. Unlike food stamps — now called Supplemental Nutrition Assistance Parogram or SNAP benefits — or other welfare programs that target the poor only, this new credit is much larger.
More than just parents in dire need deposited up to $300 per child into their bank accounts on Thursday. This program, an extension of an existing tax credit, will help the middle class and even people earn hundreds of thousands of dollars.
Interactive calculator: What sizing check should parents expect?
Some of the tax credit will be claimed at tax time next year, but the big change is that some of the benefit will be paid directly to the parents upfront, providing a monthly boost.
The IRS has been desperately trying to reach low-income Americans — through churches and other community groups — who may not have had to file taxes, but now should because they qualify for this credit. Otherwise up to 5 million children could miss, according to a CNN report.
The US has been seeking these kinds of social benefits for years, in increments and on a two-pronged basis, though not in a two-pronged way.
Republicans doubled the child tax credit to $2,000 per child with their massive tax cut in 2017, but they rejected this new extension, which Democrats put into the Covid-assistance bill they passed in 2021.
But the idea of giving money to American parents every month (not unheard of in equally rich European countries) clearly has some bipartisan support and could help lift American children out of poverty and improve parents’ quality of life.
It shares some similarities with a proposal pushed earlier this year by Republican Senator Mitt Romney of Utah (also, arguably, the godfather of Obamacare, the other major achievement in recent years in terms of democratic social spending). Democrats rejected his plan because it was paid for with cuts to other programs they liked. Democrats were able to turn this one-year experiment into law in part because they didn’t have to find budget cuts to pass the Covid aid package.
Now the Democrats are calling for it to be enshrined in US law.
“Let’s mark this day, Thursday, July 15, 2021, as the day when the American family has grown so much stronger,” Vice President Kamala Harris said during remarks with President Joe Biden in Washington. “It’s a good day, America.”
She got some credit because she insisted that the credit be paid monthly, which allows the most needy parents to cover the costs all year round. She also argued that the benefit will help children after they become adults, by improving their health and quality of life now.
“The payments may be monthly, but the impact of this tax relief on children will undoubtedly be generations,” she said.
A Brookings overview of research into similar programs on a smaller scale argued that the benefits of such payments follow children into adulthood. It also cites that researchers at Columbia’s Center on Poverty and Social Policy have argued that the controls will help reduce poverty, particularly among black, Hispanic and Native American children.
Democrats are cautiously referring to these payments as a “tax cut,” as Harris did on Thursday. Republicans, such as Florida Senator Marco Rubio, call it “welfare aid.” I asked CNN’s Tami Luhby, who deals with health care and public assistance programs, for her thoughts on this:
LUHBY: Both sides have a point here. The children’s tax credit has been around for years and has received bipartisan support, including from Rubio, who pushed for it to be raised as part of the 2017 GOP tax cuts. have income to claim it.
The American Rescue Plan has made a fundamental change to the credit, allowing it to be fully repaid before 2021. As a result, many more families — including the lowest-income Americans who don’t have a job — can claim it. More than 26 million needy children will now qualify for full credit thanks to this change, a key tool in Democrats’ efforts to reduce child poverty.
According to the latest census data, about 1 in 7 children was in poverty in 2019. The changes in credit, including an increase in the amount, are expected to reduce child poverty by nearly half this year.
But it also caused a stir among Republicans, who are calling it welfare.
Doing away with income requirements makes it look more like a government utility, although it is also open to most middle- and upper-middle-class American families. However, many proponents of the extended child tax credit liken it to a child support or universal basic income program that supports most families in the US.
How much will this cost taxpayers (many of whom are now getting cash!)? The cost of permanently expanding the tax credit would be nearly $1.6 trillion in 10 years, according to the Tax Foundation, or somewhere between $100 billion and $110 billion in each of those 10 years, including 2022.
In comparison, the Pentagon asked for $715 billion for its 2022 budget. This expansion is therefore worth about one-seventh of the Pentagon’s budget by 2022.
By comparison, the US spends far more than it takes in. The budget deficit in 2021 estimated at $3 trillion and in 2022 it is expected to be $1.2 trillion, many times the cost of this credit.
In this October 1950 photo, Ida May Fuller, 76, shows a $41.30 Social Security check that she received at home in Ludlow Vermont. On January 31, 1940, Fuller received the country’s first Social Security check for $22.54. By the time she died at age 100 in 1975, she had received nearly $23,000 in benefits.
However, for some families, this holds an implication: Getting the advance credit may have consequences if you expect a tax refund, warns the Wall Street Journal.
The first checks. If I was surprised to see a check appear in my bank account this morning from “IRS TREAS 310 CTC”, I’m sure millions of other Americans were too. There is no first check that has gone out, as the IRS has so many people’s banking details and the agency has only pressed a few buttons.
It wasn’t after Social Security was signed into law in 1935. The first checks didn’t go out until 1940, after people paid for the program for a few years. We know exactly who got the first check. It was Ida May Fuller, a legal secretary in Ludlow, Vermont.
According to the Social Security Administration, she “has worked for three years under the Social Security program. The accumulated taxes on her salary during those three years totaled $24.75. Her first monthly check was $22.54. During her lifetime, she collected a total of $22,888.92 in Social Security benefits.”
Inflation! That $24.75 equates to about $480.32 today, according to an inflation calculator, an inflation rate of 1,840.7%. A dollar went much further back then.
Random thought about government interference. Part of the country is extremely nervous when someone who works for the government knocks on their door to encourage them to get vaccinated.
I rightly wonder how anti-government interference parents will react when they see new monthly government payments appearing in their bank accounts without asking. I bet they are more OK with it. But we’ll see.