Expiring child tax credit payments could create financial cliff for Georgia families

Atlanta City Councilwoman Andrea Boone talks to two girls while shopping for gifts at Walmart. Boone took five local families, including children, on a holiday shopping trip. (BRANDEN CAMP FOR THE ATLANTA JOURNAL-CONSTITUTION)

Credit: Branden Camp

Credit: Branden Camp

Atlanta City Councilwoman Andrea Boone talks to two girls while shopping for gifts at Walmart. Boone took five local families, including children, on a holiday shopping trip. (BRANDEN CAMP FOR THE ATLANTA JOURNAL-CONSTITUTION)

The monthly child tax credit payments that parents of roughly 2 million Georgia children have received for the past six months are likely coming to an end.

The neediest families will have to deal with the sudden loss of money they have used to pay for food, housing and child care during the COVID-19 pandemic.

Democrats in Congress have been unable to reach an agreement on a $1.8 trillion social spending and climate change bill that would include an extension of the program worth up to $300 a month per child.

Senators will try to resume negotiations next month when they return from holiday break, but it will take major breakthroughs to avoid a lapse in the money that usually shows up in parents’ bank accounts midmonth.

The payments have been an “extra help” for Lakeisha Westbrooks, a single mother of seven who lives in southwest Atlanta.

“It helps a lot on light bills,” she said. “Of course we’re gonna miss it.”

Westbrooks was one of several parents whose families were taken on a holiday shopping spree at an Atlanta Walmart earlier this month, a trip organized by City Councilwoman Andrea Boone and paid for with sponsorships from local businesses.

Boone worries about the impact of the lost checks on the families she represents. She hopes that lawmakers in Washington are aware that the consequences could be vast.

“We need to make sure that they have those funds so that families can continue to cook and nourish those kids and make sure that they’re eating properly,” Boone said. “Make sure that they’re living in a clean, comfortable environment.”

The payments were part of the American Rescue Plan Act, a coronavirus relief bill that Democrats passed in March without the support of Republicans.

The law boosted the annual child tax credit from $2,000 to $3,000 for children over age 6 and from $2,000 to $3,600 for children under the age of 6. It also allowed parents of 17-year-olds to receive payments, instead of stopping at age 16. The amount begins to taper off once families reach income thresholds: $112,500 for single parents and $150,000 for couples.

More importantly, half the money was distributed in advance via monthly payments that started in July. The final round of checks went out Dec. 15 to about 35 million households covering 88% of U.S. children and totaling $16 billion.

Democrats and social services organizations have proposed making both the higher tax credits and monthly payments permanent. Language approved by the U.S. House in November as part of the $1.8 trillion Build Back Better bill includes a one-year extension.

The Senate never took a vote on the House bill, mainly because of concerns raised by two moderate Democrats: West Virginia U.S. Sen. Joe Manchin and Arizona U.S. Sen. Kyrsten Sinema.

Manchin has questioned the effectiveness of the child tax credit payments and whether families are using the money wisely. He has also said that he would like work requirements reestablished for parents to be eligible for the credit and lower income limits, which would target it to America’s poorest families.

An October survey by the U.S. Census Bureau found that roughly half of recipients spent the money on food and about 40% said they used it for household costs such as rent, mortgages or utilities. About 10% of parents used the money for child care.

The left-leaning Center on Budget and Policy Priorities says making child tax credit changes permanent could reduce the child poverty rate by more than 40%.

Georgia U.S. Sen. Raphael Warnock said those numbers make the case for extending the program.

“How do you cut child poverty and have one year of monumental achievement and then go back and double it, which is what will happen” if senators fail to act, he said.

Manchin announced Sunday that he would not support the House version of Build Back Better, although he later indicated he is still open to negotiation.

Republicans have avoided weighing in on the social spending provisions, which often poll well with voters but have seen a dip in support. A recent poll by Morning Consult/Politico found that 47% of respondents supported a one-year extension of the tax credit — down from 53% earlier this month — while 42% were opposed.

Most GOP lawmakers have joined Manchin in criticizing the overall Build Back Better price tag, expressing concern that it will increase the national debt and contribute to inflation. They have begun calling it “build back broke.”

“The Democrats’ radical wish list is not fully paid for. Instead, generations of middle-class Americans will pay for Biden’s agenda with higher taxes and higher prices at gas pumps and grocery stores,” Georgia U.S. Rep. Buddy Carter said after the bill passed the House in November.

The nonpartisan Congressional Budget Office said the measure would add about $160 billion in deficit spending over the next decade, or about a 0.5% increase over the current national debt. Democrats say the bill would boost the economy and have a net-positive impact on the deficit.

Democrats don’t need Republican support to pass the bill. But they do need both Manchin and Sinema on board.

Alternatives being discussed include rolling back the tax credits to the previous lower amounts but continuing to allow parents to receive the full amount if they have little or no income. Under the previous policy, low earners could only get part of the money or nothing at all.

There are also discussions about allowing the advanced monthly payments to continue, even at the lower amounts.

No payments in January could be devastating for families that have come to view the money as another safety net during the COVID-19 pandemic.

Imani Muhammad, a mother whose family was taken on the trip to Walmart, said the tax credit payments have benefited “families like mine that are struggling to maintain the cost of living.”

She said they have helped her more easily afford everyday necessities such as food, rent and medicine.

“It comes in handy for low-income families who don’t make enough money working,” said Muhammad, who owns an aromatherapy business. “It helps so many people out to be able to feed their kids, pay the bills and just to maintain their living.”