Personal Finance

Lawmakers Warn That Ending the Monthly Child Tax Credit Payments Will Spell Disaster for Families

It’s still unclear whether the Child Tax Credit will be extended into 2022 — and now some lawmakers are voicing their opinions on why it should be. Here’s what they’re saying.

Although the monthly Child Tax Credit payments have made a huge difference in the lives of children and families across the nation over the last several months, it appears that the advanced payments may be coming to an end. The last round of tax credit money is scheduled to be sent to mailboxes and bank accounts on Dec. 15. Once that payment is issued, the 36 million qualifying families across the nation will have to wait until tax time next April to collect the other half of the tax credit.

That said, there is a chance that the tax credits will be extended into 2022, as house lawmakers recently passed President Joe Biden’s $1.7 trillion Build Back Better plan, and it includes a one-year extension of the enhanced Child Tax Credit. An extension of the program would give tens of millions of low- to moderate-income households more time to recover from the financial strain caused by the pandemic.

Right now, though, it’s a coin toss as to whether the proposed extension will survive the legislative hurdles it faces in the Senate. The GOP has made it clear that there is significant lawmaker opposition to extending the enhanced Child Tax Credit — and if the Senate Democrats can’t find a way to get it passed, the payments will expire for good this month. If that happens, it could cause big problems for millions of families — and some lawmakers are speaking out about the issue. Here’s what they’re saying — and why.

What lawmakers are saying about the end of the monthly Child Tax Credit payments

Right now, Democratic lawmakers — with Senate Majority Leader Chuck Schumer at the helm — are pushing hard to pass Biden’s sprawling spending package before Christmas, which includes a one-year extension of the enhanced Child Tax Credit. The package has already made it through the House, but is being met with unanimous opposition from GOP lawmakers.

Without any support from the GOP, it will take all 50 Senate Democrats banding together to pass the spending package quickly — and as of right now, Senator Joe Manchin is a holdout.

Manchin has repeatedly voiced concerns over the size and scope of the package and has also been vocal about his skepticism regarding federal initiatives that provide direct payments to Americans.

“If we keep sending checks, it’s going to be hard to stop the checks,” Manchin said during his speech at The Wall Street Journal’s CEO Council Summit earlier this week.

But without Manchin’s support, the legislation could have a long road ahead of it.

This coordinated push to pass the legislation — coupled with the ticking clock on the enhanced tax credit — has led numerous Democratic lawmakers to speak out about what could happen if the Child Tax Credit payments end later this month.

“I’m deeply concerned. It would be a tragedy if the Child Tax Credit lapses,” Senator Michael Bennet of Colorado said earlier this week. Bennet played an essential role in helping to craft the legislation behind the proposed expansion.

“We should make sure that we don’t cancel this at the beginning of the new year; that will be a disaster,” Bennet said.

Other Senate Democrats have voiced similar concerns.

“Our country would not accept vulnerable senior citizens missing out on a Social Security payment,” Senator Ron Wyden said. “Similarly, it is not acceptable for vulnerable children and families to miss out on a Child Tax Credit payment.”

Other Democratic lawmakers have also weighed in on the benefits of passing the one-year expansion.

“House Democrats will not allow this tax credit to expire and I don’t believe the Senate will either,” Representative Hakeem Jefferies told reporters earlier this week.

Whether or not that winds up being the case will depend on a number of factors — not the least of which is Manchin’s willingness to unite with the 49 other Senate Democrats who support the extension.

Why are lawmakers pushing so hard to extend the tax credit?

It’s clear that most Democratic lawmakers want to extend the tax credit, but what exactly is driving this push? The widespread support is due, in major part, to the clear impact that the Child Tax Credit has had on families in need over the last six months.

According to a recent study from the Center on Poverty and Social Poverty at Columbia University, the first two advanced Child Tax Credit checks helped to lift about 3.5 million kids out of poverty. Without the tax credit money, the monthly child poverty rate for August 2021 would have been a staggering 16.2% — but was reduced to 11.5% with the Child Tax Credit payments.

Over the last six months, the advance payments have also helped to fill empty pantries and bellies across the country. Following the July and August payments, the number of households with kids and adults that reported a lack of food — or not having enough to eat — dropped by about 3.3 million.

The money has also helped to greatly reduce financial anxiety. According to a survey from ParentsTogether Action, a national parenting organization, about 56% of families who received the first tax credit payment reported that the money helped to reduce their financial anxiety. And, per the report, most of the tax credit money went toward basic household expenses, like food, utilities, rent, or childcare costs.

Furthermore, the extra tax credit money has also helped parents to stay employed during the pandemic. Per a recent report released by Humanity Forward, nearly 94% of parents surveyed said they planned to continue working — or planned to work even more — after receiving their Child Tax Credit money.

Contrary to popular belief, the money did not encourage parents to stop working. Per the study, only 6.4% of the survey respondents said they’d use the credit to either work less or change jobs — and that 6.4% consisted primarily of parents with infants or toddlers.

The next few weeks should determine whether or not parents can count on continued assistance into 2022. Keep an ear out for Senate news regarding the one-year expansion of the monthly Child Tax Credit payments.




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