The Credits Work, Let’s Make Them Permanent

Last March, Congress passed the American Rescue Plan, a bill designed to help aid millions in recovery from the economic devastation wrought by the COVID-19 pandemic. Part of that legislation was a plan to expand eligibility for the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC). Before this expansion, the CTC excluded those earning the least or those with no income from receiving the full amount of the credit. Now the CTC now is fully refundable – so the people who need the assistance the most are able to get it. Eligibility for the EITC was expanded to qualify very low-income workers without children and others who were falling into eligibility gaps. These anti-poverty programs are aimed at keeping low-income families and individuals from slipping into poverty and to provide access to critical needs like food, childcare, utilities, rent and medical bills. Studies show that many low-income families aren’t even able to afford diapers or period products, and are having to choose between which very basic need to meet. Hopes were high that expansion of these programs would help raise millions of kids out of poverty and help with providing for basic critical needs.

Now, in October, the short-term data is in – they work! In July families started seeing checks in their accounts and according to recent census data the number of households reporting not having enough to eat (the technical term used is food insufficiency) has dropped! Read here an account from La’Shon Marshall, who lives in Detroit and is an advocate and Expert on Poverty at RESULTS Educational Fund, of how the CTC has helped her and her family. More families are now able to feed their kids, pay rent and utilities and not have to make heartbreaking choices about whether to eat or buy diapers and other needed health items. This is very good news! The credits work! People who receive these funds need them urgently to meet their basic needs; this is not a situation of families getting checks and saving them for the future. Rather, it helps raise families up to a place where they can start to make ends meet.

The challenge here is that the CTC and EITC expansions were only approved through the end of 2021. It’s clear though, that these expansions in eligibility to help families and low-income folks through hard times are needed far beyond the end of the year. Benefits have been rolled out and we’re seeing the results with families experiencing less economic hardship, we can’t roll them back now. We must make sure that these programs are permanently expanded.

Congress has been debating all summer on a large package of recovery measures as well as measures to help make our economy and society more equitable. These include a permanent expansion of the CTC and EITC. One of the key challenges facing passage of the legislation is paying for it. Some lawmakers say it is too expensive and so benefits need to be curtailed or even not included. As it often is the case when doing the math on legislation it is the programs that help the poor and the vulnerable that get cut; with the wellbeing of these folks being used like political trading cards. This doesn’t have to be the case; Congress instead needs to take a serious look at the tax code, making changes so our tax system is fairer and more equitable. So that the very wealthy and corporations are paying their fair share to the good of our society.

The General Synod of the United Church of Christ passed a resolution in 2013 calling for a tax system that is “progressive…adequate…and equitable.” We know that programs to help the vulnerable have been chipped away and suffered from chronic neglect and underfunding. The refusal to ensure our tax code equitably brings in enough revenue to care for the least of these is a moral failing. As 2 Corinthians 8:13-15 reminds us when Paul wrote to the Corinthians, “I do not mean that there should be relief for others and pressure on you, but it is a question of a fair balance between your present abundance and their need, so that their abundance may be for your need, in order that there may be a fair balance. As it is written, “The one who had much did not have too much, and the one who had little did not have too little.”  We have the mechanism and the means to help ensure abundance for all, yet are lacking, it seems, the political will.

If Congress passes a reconciliation bill that includes permanent extensions of the EITC and the CTC, we’ll continue to see positive benefits and help lift people out of poverty.  The reconciliation bill with its generational investments in the care infrastructure and anti-poverty measures isn’t the end of reorienting our economy to be fairer, but it is one tool we can use on the way there. Our faith lets us know we can act out of abundance and not scarcity; let’s help make sure Congress gets that message too.

Katie Adams is the Domestic Policy Advocate for the UCC Washington D.C. Office of Public Policy and Advocacy