How the U.S. Can Return to Its Record-Low Child Poverty Rates | Opinion

The U.S. Census Bureau announced this month that the child poverty rate more than doubled from 2021 to 2022, climbing from 5.2 percent to 12.4 percent of the nation's children living in families unable to meet their basic needs. After three consecutive years of record-low child poverty rates beginning in 2019, the streak is now broken, and in dramatic fashion. But there is a silver lining: the country has its strongest evidence to date on which policies are effective in reducing child poverty, and how quickly poverty can rise again when those policies end.

There are three lessons, in particular, that policymakers should learn if the U.S. is to return to its record-low child poverty rate.

First, Congress must acknowledge which policies led to the dramatic decline in child poverty in 2021 and its subsequent rebound in 2022. The American Rescue Plan Act of 2021 introduced a bevy of income supports, but none was more consequential than the expanded Child Tax Credit (CTC), which put direct cash payments into the pockets of nearly all families with children regardless of parents' employment status. The CTC's effects were profound. Not only did it contribute massively to the record-low child poverty rate in 2021, but it cut monthly child poverty rates by around one-third, temporarily brought the U.S. child poverty rate in line with Germany's, had the American welfare state cutting child poverty at the rate of Norway, cut food hardship among families with children by around one-fifth, had no meaningful short-run consequences for employment, and increased low-income families' consumption at child care centers and grocery stores.

Expansions to unemployment benefits and a stimulus check also contributed to low poverty in 2021, but the CTC did the most to increase the ability of families with children to regularly meet their basic needs. Moreover, the expiration of the expanded CTC and other COVID-era income support by 2022 is more responsible for the rise in poverty than inflation, and allowed the child poverty rate to skyrocket despite notable declines in unemployment from 2021 to 2022.

A second lesson to be learned from recent years is the urgency and importance of reducing children's exposure to poverty. Researchers have long documented the consequences of child poverty for children's development and later-life socioeconomic outcomes. But the cruelness of lifelong poverty exposure was never more apparent than during the COVID-19 pandemic. As I document in my new book, Poverty in the Pandemic: Policy Lessons from COVID-19, American adults who experienced poverty during their childhoods faced a different pandemic than the rest of the country. They were more than twice as likely as better-off adults to have lost a job at the onset of the pandemic, and were also twice as likely to fall victim to COVID-19. Meanwhile, low-income children exposed to distance learning suffered 50 percent greater learning loss in mathematics.

The disadvantages stemming from childhood poverty reinforce that reducing disadvantage is not a singular act, but an outcome of persistent policy choices that ought to begin with targeting disparate exposure to poverty in childhood. One clear strategy for reducing exposure to poverty during childhood is to provide families with children unconditional payments to support the child's and family's basic needs. Most wealthy countries offer some type of child allowance like this; the U.S. typically does not, with exception of the expanded CTC benefits paid out each month from July to December 2021.

Third, given the immense costs of early poverty exposure, and the ability of an expanded CTC to prevent that exposure, Congress should be willing to sacrifice existing social programs, if politically necessary, to find common ground on a renewed CTC expansion.

Ideally, an expanded CTC could be achieved through cross-party negotiations on tax reform rather than by substituting other social programs, as has been the case with modifications to refundable tax credits in prior decades. Recent right-of-center proposals suggest, however, that Democrats may need to give more, and one program stands out as a potential-trade in: welfare, more formally known as the Temporary Assistance for Needy Families (TANF) program.

In all but a few states, the TANF program did little to directly support families in need during the pandemic. In the first year of the pandemic, the average state instead spent 22 percent of its TANF budget on cash support—one percentage point higher than 2019, though still lower than in 2017. In addition, state governments provide less generous support to Black families, exacerbating racial differences in child poverty.

Moreover, the primary reason that TANF has been in the news is due to obscene examples of fraud in the program. The most publicized case of late was in Mississippi, where the state is accused of improperly spending more than $70 million of TANF funds, including $1.1 million to a former National Football League quarterback who made millions during his playing career, at least $4 million that went to build a volleyball court at the University of Southern Mississippi, and money used for a Malibu-based drug rehabilitation center for a professional wrestler who went by the stage name "The Million Dollar Man."

There are costs to abandoning TANF, but should the political balance of Congress require it to identify offsets in order to fund an expanded CTC at 2021 benefit levels, TANF is worth trading in to achieve more substantial and sustainable reductions in child poverty.

The record-low child poverty rate that the U.S. achieved in 2021 should not be seen as a COVID-tainted aberration that cannot be replicated. The country's temporary success in fighting child poverty was a direct outcome of policy choices that were unique in the history of American public policy, but that have been standard policy tools in most other high-income countries. Both sides of the aisle in Congress should learn from the experiences of 2021 and 2022 to ensure that fewer children growing up in poverty is the norm for the U.S.—rather than a pandemic-era exception.

Zachary Parolin is an Assistant Professor of Social Policy at Bocconi University and a Senior Research Fellow at Columbia University's Center on Poverty and Social Policy. He is the author of Poverty in the Pandemic: Policy Lessons from COVID-19. His recent research on poverty has been featured in The New York Times, Washington Post, The Economist, The Atlantic, CNN, in a U.S. presidential debate, and in other outlets.

The views expressed in this article are the writer's own.