“Parolin: I think the most important set of policy lessons to take away from the pandemic is that when the government wants to and has the political will, it can make massive reductions in poverty and food hardship and massively increase economic well-being among families who otherwise would be going through tough times. One of these central policy lessons related to that is returning to the expanded child tax credit that we saw in 2021. That expanded child tax credit cut the monthly child poverty rate by around a third. It cut food hardship. It had the U.S. child poverty rate temporarily in line with Germany’s, instead of being twice as high as Germany’s, as it was before the pandemic. It increased families’ consumption at childcare centers and grocery stores. And it was massively successful, in the year that it was implemented, in making life better for low-income families with children.
“When the Census Bureau announced its 2022 poverty estimates, we saw the flip side of this story. The child tax credit was gone in 2022, and to no one’s surprise, the child poverty rate went from a record low to back where it was before the pandemic began, which results in more than a doubling of child poverty from 2021 to 2022.”
“This bill is a classic bipartisan compromise. Democrats and some Republicans want to expand the CTC. Republicans and some Democrats want to restore the pre-TCJA’s business tax breaks. This bill does both, at least for the next couple of years. But it does so at a cost. Those billions of dollars in wasted retroactive tax benefits could be better spent elsewhere, or even used to lower the budget deficit.”