Joe Biden heralded a “giant step towards ending child poverty in America” on Thursday as he marked the beginning of the “life-changing” expansion of the child tax credit system.
In remarks from the White House, the president predicted that the provision would lead to the largest one-year decrease in child poverty in the history of the US. Social scientists have estimated that under its impact more than 5 million American children will be lifted out of poverty – more than half those currently living below the poverty line.
“For millions of children, starting today their lives are about to change for the better. The benefits will be felt for years,” Biden said.
On Thursday, millions of American families began receiving monthly checks of $300 per child under six and $250 for each child under 18 as part of the Biden administration’s $1.9tn American Rescue Plan. The extra income begins to taper off for families earning more than $150,000 as a family or $125,000 as an individual.
Child poverty experts have welcomed the monthly payments as potentially transformational. They will mitigate an insidious poverty trap that was built into the old tax credit system.
State assistance in the past was paid annually through tax returns, which meant that the poorest children, whose parents paid no taxes, were unable to benefit from a tax credit. Biden noted the cruel irony of that glitch, saying that half of all Black and Hispanic children in America and a total of more than 26 million children from the hardest-pressed families did not receive a full payment.
Vice-President Kamala Harris also highlighted the regular payments as a poverty-slashing innovation. “If the struggle to make ends meet is monthly, the solution has to be also,” she said.
The potential reach of the poverty reduction measure is vast. Almost 70 million children will be included – more than 90% of all American kids. Some 97% of the children who will benefit are from working families.
The one potential weakness in the expanded child tax credit plan is that it is a temporary measure, lasting only for one year. To make it permanent will require legislation through Congress.
The White House is hoping that the scheme will quickly prove so popular with so many millions of American families that Republicans will be persuaded to support it . With one eye on potentially recalcitrant Republicans, the president presented the payments as a tax cut, not as a welfare benefit.
“This is one of the largest single tax cuts for families with children … I want to extend it into the future,” he said.
