Members Only | March 8, 2022 | Reading Time: 4 minutes
Manchin and the GOP smear the poor to avoid helping them
Cash payments lift kids out of poverty. To the rightwing, though, that can’t be. The poor are poor, because they deserve their poverty.
Following the expiration of the Child Tax Credit on December 15, millions of children plunged back into poverty. Child poverty rates ballooned from 12 to 17 percent in January.
That’s the highest rate since December 2020, before the credit was passed as part of the American Rescue Plan Act last March.
Conservatives claim government “handouts” create dependency and exacerbate the problems they attempt to redress. But the immediate increase in poverty shows how successful the Child Tax Credit was.
Joe Manchin said the Child Tax Credit was helping the undeserving. He insisted it include a work requirement, because he thought that people who received payments were dropping out of the workforce. He reportedly opposed renewal because he worried that parents would use the extra money to buy drugs.
It’s clear evidence that giving money to those most in need is the simplest, most direct way to alleviate poverty.
The name “Child Tax Credit” sounds like a complicated technical tax abatement. In fact, though, the program is basically straightforward cash distribution.
Low-income families with children formerly could receive a tax rebate at the end of the year. The Child Tax Credit changed this so payments happened every month. It expanded eligibility to more low-income families, including families who earned too little to be eligible. Finally, it raised the cap, so families could receive $3,000-$3,600 per child, rather than a maximum of $2,000.
The result was that low-income families received monthly checks of as much as $250 to $300 per child. The first installment on July 15 reached more than 59 million children, about 80 percent of all children in the US.
According to researchers at the Columbia University Center on Poverty and Social Policy, the benefit kept 3.7 million children out of poverty. In July, following the first payment, the child poverty rate fell immediately from 15.8 percent to 11.9 percent.
That’s a 26 percent reduction.
At the end of the six months, the payments had reduced child poverty in the US by 30 percent. It cut food insufficiency among families by 26 percent.
The program helped children almost as soon as it began. Ending it had similarly swift negative effects.
In January, 3.7 million children slipped below the poverty line as the Child Tax Payments ended.
The success of the Child Tax Credit shouldn’t be a surprise.
There has been plenty of evidence that giving poor families money helps lift them out of poverty.
For example, a 2019 Berkeley study of aid to families in Kenya found that cash transfers were hugely helpful to families who lack funds to buy foods and essentials. Researchers also found major benefits to communities, as poor people suddenly had funds to spend in local economies. A 2017 study in Ecuador found that direct cash payments not only lifted people out of poverty in the short term, but helped create long-term social mobility.
As for the US, the massive increases in government aid during the pandemic, including cash payments, resulted in a similarly massive reduction in poverty. From 2018 to 2021, there was a drop in poverty of 45 percent.
That’s the single largest reduction in poverty on record.
And the Child Tax Credit itself has provided a definitive experiment in poverty reduction.
Cash payments for poor children caused child poverty to fall substantially. Ending those payments led child poverty to bounce back.
It’s pretty clear that if we want to reduce child poverty again, we should restart Child Tax Credit payments.
You’d think everyone in Congress and for that matter in the country would agree that lowering child poverty is good. You’d think everyone would be able to see that the Child Tax Credit lowers poverty.
Why was it allowed to lapse?
West Virginia Senator Joe Manchin, whose state has one of the highest child poverty rates in the country, had a bunch of excuses for opposing the Child Tax Credit renewal. In a line straight from a list of reactionary talking points, he said he believed the program was helping the undeserving. He demanded the program include a lower income cap on families who could receive aid.
He also insisted the program include a work requirement, because he thought that people who received payments were dropping out of the workforce. He reportedly opposed renewal because he worried that parents would use the extra money to buy drugs.
All of these concerns dovetail with longstanding rightwing critiques of social safety net programs.
The right insists giving money to the poor makes them irresponsible and lazy, and contributes to a cycle of poverty and irresponsibility. Manchin, and those like him, say helping the poor makes them poorer.
There’s tons of evidence that Manchin and his reactionary colleagues are wrong. In regard to the Child Tax Credit, researchers found that 91 percent of families spent the extra money on basic needs like food, clothing, school supplies, utility and rent. Less frequently, they spent the money on vehicle payments, child care or paying down debts.
The suggestion that payments led to drug use is a canard. Recent research suggests that income transfer payments significantly reduce opioid deaths. People are less likely to overdose when the social safety net provides them with some cushion against despair.
Similarly, there is no evidence that the payments led parents to stop working.
In fact, parents in interviews said the payments made it possible for them to cover transportation and child care costs, making it easier for them to keep working.
Giving money to the poor makes them more able to work, not less, because, as most people who work know, you have to spend money to be in a position to labor for money.
Yet Manchin and Republicans were unmoved by the Child Tax Credit’s success. They waved away the clear evidence that all of their excuses for not renewing it were nonsense.
It’s true that the Child Tax Credit was part of the broader Build Back Better initiative, which had many features that Republicans and Manchin did not support. But Republicans had few regrets about increasing child poverty, and Manchin specifically targeted the program itself as a reason for scuttling the larger bill.
Manchin and Republicans, it’s clear, aren’t engaged in good faith efforts to reduce poverty. If they were, they’d be eager to renew.
Since they aren’t, it’s fair to conclude they simply do not want to provide aid to poor people.
Noah Berlatsky writes about the political economy for the Editorial Board. He lives in Chicago. Find him @nberlat.