NEW CENSUS STUDY SHOWS CHILD POVERTY IS ON THE RISE

After hitting a record low of 7.8% in 2021, a new report by the Census Bureau finds that the supplemental poverty rate (SPM) took off like a rocket and now stands at 12.4%. That’s the first increase in the SPM in ten years and, in absolute numbers, it translates into an additional 15 million persons entering the ranks of poverty between 2021 and 2022.

What’s more, the increase in the child poverty rate is off the charts. Between 2021 and 2022, the child poverty rate went bananas, rising from 5.2% to 12.4%. And while there was an increase in child poverty rates across the board, the SPM is particularly high for Black, Latino, and American Indian/Alaska Native kids.

• The poverty rate for Black kids jumped from 8.3% to 18.3%

• The poverty rate for Latino children rocketed from 8.4% to 19.5%

• The poverty rate for American Indian/Alaska Native zoomed from 7.4% to 25.9%

• The poverty rate for White Kids climbed from 2.7% to 7.2%.

Overall, there is now almost 9 million kids mired in poverty, and that’s five million greater than in 2021.

WHAT’S UP WITH THAT INCREASE IN CHILD-POVERTY?

The decision to the allow American Rescue Plan’s (ARP) Child Care Tax Credit to expire at the end of 2021 is central to understanding that crazy rise in child poverty from 5.2% in 2021 to 12.4% just one year later.

Enacted in March 2021, the American Rescue Plan’s Child Tax Credit (CTC) increased the amount of the credit from $2,000 to $3,600 per child under age 6 and to $3,000 per child aged 16-17 and, importantly, made the tax fully refundable.

That fully refundable thing is huge. It meant that families whose incomes were too low to previously qualify for the tax refund were now able to benefit from the expanded CTC. It meant, as the IRS puts it, “you do not need any income or need to owe any tax in 2021 to receive the full amount of the Child Tax Credit for which you are eligible.”

All of that, again, went kaput at the end of 2021. Among other things, the maximum credit has reverted back to $2,000 per child, the age limit has returned to 16 rather than 17 years old, and that full refundable part is history.

A recent report by the Center on Budget and Policy Priorities makes it abundantly clear that the Congressional failure to renew the ARP’s enhanced Child Care Tax Credit is at the root of the present run up in child poverty:

One of the largest causes of this year’s jump in children’s poverty was the expiration of the 2021 Child Tax Credit expansion. Renewing this 2021 credit would have kept about 3 million children above the poverty line in 2022 — including 975,000 white children, 603,000 Black children, 988,000 Latino children, and 57,000 Asian children — avoiding more than half of the actual jump in the child poverty rate, we calculate using data Census released today.

Throw into the mix the expiration of the American Rescue Plan’s stimulus payments—monies that also helped to keep kids above the poverty level— and what you see is what you get.

A soaring increase in child poverty.

ABOLISHING CHILD POVERTY IS NOT COMPLICATED

The supplemental poverty rate (SPR) does something that the official poverty rate (OPR) does not: In calculating poverty, the SPR adds to income any cash or noncash benefits that the household receives and it subtracts from that household’s income such expenses as taxes, work related costs, and incurred medical expenses.

The pandemic-related assistance to households, including the enhancement of the Child Tax Credit (CTC), was captured in the SPM metric. Once the Congressional Republicans, in conjunction with Democrats like Senator Manchin, was successfully in allowing the CTC to expire, the poverty rate—at least as measured by the SPM— took off immediately, unleashing pain on millions of kids and delivering a particularly painful shot to the gut of Black, Latino, and Native American children.

But there’s a lesson here, although it’ll continue to be resisted by many of those occupying positions of power.

And the lesson?

Abolishing poverty is not all that complicated. Generous support, exceeding what was granted in response to the pandemic, can wipe out poverty—including, of course, child poverty.

The lesson is that the existence of poverty has more to do with policy than some imagined economic constraint.

The lesson is that the powerful in this nation choose— CHOOSE!— to make peace with poverty.

The lesson is that policy can push people into or pull people out of poverty.

The lesson is that poverty exists because the powerful push.

Now, as much as ever, is time for people of good will to

push back!

The lesson is that policy is powerful.

Powerful enough to push people into or pull people out of poverty.

Catch you on the flip side,

Doc Greene