The child tax credit, part of the Biden administration’s American Rescue Plan Act passed last year, distributed as much as $300 per child every month to millions of American families starting in July. The extra pay lasted six months before it lapsed in late December. It would have come this weekend.
“Families are facing extra financial pressure just as an omicron surge leads to more illnesses, school cancellations and lost income from work,” said Alix Gould-Werth, director of family economic security policy at the Washington Center for Equitable Growth, a left-leaning think tank. “I’m worried about the immediate implications for families, as well as the ways this will ripple out onto the economy by dampening spending.
Back in Mississippi, Roberts — who took custody of her cousin’s grandchildren five years ago — says she’ll probably let her car insurance payments lapse so she can buy groceries. She has just $388 left in her bank account but feels lucky to own her house, which she says puts her in a much better position than many friends who are at risk of eviction or foreclosure.
“When you live paycheck to paycheck, you get so beat down having to watch every penny — and God forbid your car breaks down or you need a plumber,” the 49-year-old said. “For a few months, we had the wiggle room to breathe.”In San Antonio, Nathaniel Miller and his wife used their monthly payments to buy gluten-free food, oat milk and diapers for their 1-year-old daughter, who has severe food allergies.
Bruce Meyer, a professor at the University of Chicago’s Harris School of Public Policy, said policymakers have long favored antipoverty spending targeted toward specific problems, such as disability payments for those who cannot work, the Supplemental Nutrition Assistance Program for families that need help buying groceries, and public housing programs for the homeless. The enhanced child tax credit, he said, marked a departure by giving families money without strings attached.
“To send cash to every family with kids — regardless of need, regardless of whether they’re able to work — was a completely new thing,” he said. “The long-term consequences are that you encourage dependence on the government and keep people from figuring out how to support themselves.”