POVERTY, INEQUALITY & OPPORTUNITY
The most exciting step forward against childhood poverty in a “lifetime”
While many Americans are focused on the next stimulus check they may receive as part of the recently passed American Rescue Plan Act, HKS Professor David Ellwood says the most transformative element of the $1.9 trillion COVID-19 bill is the expansion of the child tax credit. “Most projections I have seen suggest poverty reductions of between 40 and 50 percent,” Ellwood said in a recent discussion. “This bill is really the most exciting step to come forward [against child poverty] in my lifetime.” Under the new law, parents can now receive up to $3,600 per child under age 6 and $3,000 per child ages 6-17. Another major change is that the credit can be paid out monthly in advance by the IRS and that families with no income are now eligible. Ellwood, who served as an assistant secretary of the U.S. Department of Health and Human Services under President Clinton and studies poverty, welfare, and social policy, also downplayed concerns about the absence of a work requirement for the credit. While some low-income workers might cut back hours on a second job, he said, others can use the money for child care or job training to improve their employment prospects.