Disclaimer: Moving Health Care Upstream is a collaborative effort originally co-led by Nemours Children’s Health and the Center for Healthier Children, Families & Communities at the University of California- Los Angeles (UCLA). The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of Nemours, UCLA or the Moving Health Care Upstream initiative.
Authors:
- Hannah Wagner, MPP, Senior Advisor, Policy Development and Partnership
- Kara Odom Walker, MD, MPH, MSHS, Executive Vice President and Chief Population Health Officer
- Daniella Gratale, MA, AVP, Federal Affairs
- Casey Osgood, MPH, Senior Advisor, Legislative and Regulatory Affairs
Introduction
Poverty is a powerful social driver of health that can impact children’s health and wellbeing throughout their lives. A growing body of evidence supports the positive impact of federal anti-poverty programs, like the Child Tax Credit, to help children perform better in school, live healthier lives, and earn higher incomes as adults. Congress has a unique opportunity to consider new measures to address child poverty.
What is the Child Tax Credit, and why is it important?
Established in 1997, the Child Tax Credit is a federal program that provides a tax break to eligible families with children. The amount of the tax credit is determined by household income, marital status and number of dependent children. Current estimates suggest that the Child Tax Credit lifts about two million children out of poverty each year.
During the COVID-19 pandemic, the American Rescue Plan Act (ARPA) temporarily expanded the Child Tax Credit. The temporary expansion expired at the end of 2021, and child poverty rates increased. Congress is again considering expanding the existing Child Tax Credit, albeit more modestly than the ARPA expansion. An expansion could amplify the impact of the already powerful program by lifting additional children out of poverty, which could, in turn, improve child health and education outcomes.
Public Health Context
Poverty is the single greatest driver of health.
Poverty is the single greatest driver of health. Families that experience poverty may endure both material hardship (e.g., substandard housing, insufficient nutritious food) as well as increased psychological distress – both of which can profoundly impact child health and social outcomes, including developmental delays, chronic illness, and toxic stress.
- Physical health. Poverty can impact birthweight and infant mortality. Additionally, children living in poverty are more likely to experience asthma, hypertension, poor nutrition, and obesity, all of which can affect lifelong health.
- Development. Research demonstrates that living in poverty is associated with differences in brain development in children and adolescents, which can affect cognitive processes related to learning, communication, social emotional processing, and academic achievement.
- Social, emotional and mental health. Children that experience poverty are more likely to experience chronic stressors (e.g., substandard housing, separation from caregivers), which can influence brain development. Children living in poverty are also at increased risk of challenges with self-regulation and executive function (e.g., inattention, impulsivity, defiance, poor peer relationships). Lastly, one study shows that the more time children spend in poverty from birth to age nine, the worse their mental health is as emerging adults.
Poverty can also impact other social drivers of health – like academic achievement.
Substantial evidence demonstrates that as compared to children who are not living in poverty, children living in poverty fare worse in school, which can impact children into their teenage years and adulthood. Moreover, children who experience poverty are more likely to experience poverty as an adult – perpetuating cycles of generational poverty, and the consequences of poverty on one generation can impact generations to come.
The Opportunity to Address Child Poverty
Evidence from the Child Tax Credit expansion during the COVID-19 pandemic suggests the positive impact of the Credit on lifting families out of poverty.
Efforts to expand the Child Tax Credit would build on recent policy successes. Analysis from the Census Bureau shows that the most recent one-year expansion during of the Child Tax Credit during the COVID-19 pandemic, in combination with other relief efforts, contributed to a decline of nearly 50% in child poverty rates, with child poverty rates recorded at 5.2% in 2021, a record low. Poverty rates dropped most dramatically among Black and Hispanic children. Moreover, evidence suggests that the expanded Child Tax Credit helped families meet their basic needs, including decreasing food insecurity, while not decreasing parent/caretaker employment.
Lifting children out of poverty improves child health and wellbeing.
Anti-poverty programs that provide cash or near-cash support can improve child health and wellbeing, including improving physical, emotional and behavioral health, as well as educational outcomes. Moreover anti-poverty programs are also shown to reduce contact with the criminal justice and child protective service system.
Forward momentum on Child Tax Credit in Congress could lift more children out of poverty.
Momentum has been building in Congress to extend the child tax credit. On January 31, 2024, the U.S. House of Representatives passed the bipartisan Tax Relief for American Families and Workers Act of 2024 (HR 7024), a $78 billion tax package that includes a provision to expand the Child Tax Credit. This expansion would make the Child Tax Credit more generous for families who currently cannot claim the credit in full. It would also eventually adjust the Child Tax Credit for inflation. The proposed changes would have a profound impact on the country’s lowest income families, with estimates suggesting that the bipartisan Child Tax Credit proposal could lift over half a million children out of poverty.
On the Senate side, it is possible the bill is amended either in the Finance Committee or on the floor of the Senate. If the Senate passes an amended package, it would need to be negotiated with the House before a final measure could move to President Biden for his signature.
A Step Towards Reducing Child Poverty and Improving Child Health
Alleviating child poverty stands to improve child health outcomes in the short- and long-term. Evidence shows that anti-poverty programs, like the Child Tax Credit and others, can help lift children and families out of poverty and improve their outcomes for years to come.
