Beyond the pandemic Johnisha Levi

The Center on Social Policy at Columbia University has estimated that the American Rescue Plan will cut the child poverty rate by as much as 56 percent this year, which would affect children of all races. The poverty rate for Black, Hispanic, and Indigenous children, who are disproportionately affected by both poverty and Covid-19, would decline by 52 percent, 45 percent and 61 percent percent, respectively. However, as the Children’s Defense Fund’s Director of Poverty Policy, Emma Mehrabi, cautions, “Th[is] data will only live up to its projections if families – especially the hardest to reach – know about the benefits [offered through the plan] and can easily access them. So we need to make sure that families and communities on the ground are aware of this program, and we need to work aggressively to get them signed up.”

The plan’s newly liberalized child tax credit (CTC), which is a cash transfer that can be spent as parents and caregivers determine, has been receiving a lot of media coverage because of its transformational potential. The plan’s CTC is fully refundable, such that it will benefit 93 percent of the parents of American children, or 69 million people. Before the legislation, the poorest 10 percent of children did not receive any benefit from the CTC and about 25 percent received only a partial benefit. Many of the children whose families were excluded from the original CTC were the children of single parents, Black and Hispanic children, and children who live in rural areas.

Effectively, parents who receive the CTC under the Rescue Plan are getting a small taste of what it would be like to have a guaranteed minimum income to support their children. According to a recent UNICEF report, at least 23 countries guarantee a minimum income for families with children. Canada, for example, provides a scaled yearly benefit to any Canadian residents primarily responsible for the care and upbringing of a child under its Canada Child Benefit program. The current iteration of these payments has its roots in “Family Allowances” that were introduced in the country after World War II. Germany also offers families a monthly stipend (kindergeld) paid from birth through at least age 18 – and extended through age 25 should a child pursue higher education or vocational training.

Payments in support of children have appreciably reduced child poverty in real time, but have also produced more benefits. For instance, in Canada, research has shown that children with a guaranteed income improved their performance in school, had better health outcomes, and earned more income as adults. Likewise, the Stockton Economic Empowerment Demonstration, which provided $500 a month, no strings attached, to 125 low-income families for two years, demonstrated that regular payments to families can significantly reduce income volatility, and lead to improved physical and mental health and more full-time employment opportunities.

While extending cash aid to more American families in need has its benefits, it has not been without controversy in the past. The United States federal government largely moved away from cash assistance after the New Deal and the burgeoning prosperity of post-World War II. President Lyndon Johnson, invoking the idea of the Great Society for the first time, articulated a war on child poverty in his 1964 speech at Ohio University. He envisioned “a society where no child will go unfed, and no youngster will go unschooled.”

However, LBJ’s top economic adviser, Walter Heller, advised against implementing a minimum family income as part of the administration’s ensuing War on Poverty. As Joshua Zeitz explains in Politico, Heller believed that such a strategy was not only cost-prohibitive, but that it would “leave the roots of poverty untouched and deal only with the symptoms.”

Accordingly, the Johnson administration opted for a combination of educational, workforce training, medical care, and food assistance programming. This was how the Food Stamp program (now SNAP), Medicare, Medicaid, and Head Start were launched, as well as an expansion of the already-existing Social Security.

Excerpted: ‘Eradicating Child Poverty Beyond the Pandemic’

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