The data shows how difficult it is to be poor in the United States (these needs were clearly going unmet pre-CTC expansion) and why it’s imperative that Congress extends the expanded child tax credit beyond its current expiration at the end of the year.
This insight comes from an analysis by the Center on Budget and Policy Priorities of data from the Household Pulse Survey conducted by the Census Bureau. It found that strong majorities of households with incomes of $35,000 or less in every state and the District of Columbia are spending their payments on, largely, necessities.
Other common destinations for the CTC funds disbursed to poor families are vehicle payments, paying down debt, and childcare. While they don’t count as necessities under the CBPP’s definition, it’s also clear that all three are exceedingly responsible ways to spend the money.
Despite the clear and obvious way CTC payments have improved the lives of poor families, the fate of the program is far from certain. The American Rescue Plan only funded the program for one year, and negotiations over President Biden’s Build Back Better agenda aren’t looking great.
Sen. Joe Manchin, who can sink the entire package by withholding his vote, is demanding that the family income limit CTC be lowered to $60,000. That wouldn’t affect the families covered by this analysis, but it would deny the funds to the families of more than 37 million other children who are currently eligible for the credit and who need financial support.
The real danger of Manchin’s stand against every other member of his party is that the gridlock it causes might mean the expanded CTC simply expires and that the families who are depending on it will suddenly lose what’s clearly a vital source of income.