The American Rescue Plan: Giant Strides Forward on Child Poverty

The “seed experiment” is a favorite science project from preschool on up: A child plants identical seeds in two pots. She places the first pot inside a dark closet and leaves it there. She then puts the second one in a sunny spot and waters it every day, and waits to see what will happen. It’s very easy for even the youngest children to figure out that their seedlings need the basics—sunlight and water—if they are going to survive and thrive.

The same is true for children. The past year has been filled with heartbreak and uncertainty for millions of Americans and left many children without critical basics, struggling with everything from isolation from school, teachers, and friends to knowing their families were having trouble buying enough food or paying rent. Now President Biden has signed the American Rescue Plan. This crucial bill, which has been called the most ambitious anti-poverty legislation passed in more than 50 years, will provide help with basics like food and housing assistance, unemployment insurance benefits, expanding affordable health care, funding for COVID-19 testing, vaccines, and supplies, child care assistance, and safe school and child care reopening. It takes giant strides forward on child poverty with a set of critical temporary provisions projected to cut child poverty in half and lift more than 5 million children out of poverty in 2021. The Children’s Defense Fund (CDF) has advocated for many of these anti-poverty provisions since our founding.

The most monumental victory is the expansion of the Child Tax Credit (CTC), which creates a universal child allowance for the first time in our nation. Through the one-year CTC expansion families will receive $3,600 for young children under 6 and $3,000 for children ages 6 to 17. The bill also makes the credit fully refundable, extending eligibility to 23 million children previously left behind or denied the full value of the credit because their families earned too little. The temporary CTC expansion accounts for the bulk of the bill’s impact on child poverty: this provision alone will cut overall child poverty 45 percent and cut poverty 52 percent for Black children, 45 percent for Hispanic children, and 61 percent for Indigenous children, bringing help to children whose communities and families have been disproportionately hard-hit during the pandemic and who most urgently need the basics right now. It needs to be made permanent.

Other anti-poverty measures in the rescue bill that CDF has long championed include expansions of the Earned Income Tax Credit (EITC), the Child and Dependent Care Tax Credit, the Supplemental Nutrition Assistance Program (SNAP), and housing and cash assistance. We lifted up these solutions in our 1994 report Wasting America’s Future, in both editions of Ending Child Poverty Now (2015 and 2019), and in many other publications. The next step will be making these changes permanent and acknowledging that there should never be poor children in our wealthy nation.

The first year of the pandemic has pushed many people to reevaluate what is most important. This is an opportunity also for our nation to reset and do the same. The American Rescue Plan’s provisions are a down payment on a new set of priorities: Helping unemployed and low-income workers is important. Providing access to affordable health care is important. Helping women who are pregnant, caregivers who care for young children, older adults, and family members with disabilities, and grandparents who care for grandchildren is important. Supporting families, preventing child abuse, and lifting children out of poverty are crucial.

Child poverty is economically costly and was a moral blight on our nation long before the pandemic began. Child poverty is higher than for American adults and children in competitor nations and higher than a country with the world’s largest economy should ever tolerate. Right now is the time to ensure every child in our rich nation has access to the basics needed to survive and thrive. This rescue plan must become permanent roots for America’s children.