Parents say the child tax credit worked. Can Congress bring it back?

When the payments stopped coming, a mother in Milwaukee had to decide between buying diapers and baby formula for her newborn or paying for the Wi-Fi her sons needed to attend online school. 

In Chicago, a mom used the last of the cash she had saved from the payments to rent a hotel room for herself and her 2-year-old daughter after their apartment’s heat was unexpectedly shut off and the temperature dropped to 9 degrees. 

A West Virginia woman who instructs low-income people about parenting and domestic violence said the end of the payments meant she and her kids were applying for financial support and eating meals of potatoes, beans, canned foods or pancakes. 

Between July and December, the expanded child tax credit provided parents a cross the United States a small financial reprieve from the pandemic’s economic turbulence. On the 15th of each month, parents who signed up received payments of up to $300 per child under age 6 and $250 per child ages 6 to 17.

Many said it gave their families a little room to breathe. 

“I received $500 and every month I figured out what the household needed, whether it was gas, school supplies, toiletries, rent or the electric bill — whatever,” said Savanah Brooks, 36, the Milwaukee mom who gave birth to her daughter earlier this month after having to take unpaid time off work because her pregnancy was considered high risk. “It gave us just a little cushion and made life a little easier.”

Savanah Brooks, 36, holds her 9-day-old newborn daughter, Malaya, in her home in Milwaukee on Saturday.Sara Stathas for NBC News

The expiration of that benefit, however, and Congress’ inability to pass the Build Back Better agenda that would have cemented the child tax credit for an additional year has left many parents in the U.S. — particularly those struggling to make ends meet in the pandemic’s choppy economy — overwhelmed. 

The half-dozen parents in states across the country who spoke to NBC News expressed feelings of deep anger, intense dejection, simmering resentment and a fierce frustration with politics and Washington, D.C., as debate over the future of the expanded child tax credit remains on a gloomy trajectory.

That fight continues despite data showing the policy moved millions of children from poverty and a recent study concluding that providing financial support to a low-income family boosts children’s brain development. The expiration of the expanded child tax credit is expected to thrust millions of children back into poverty and increase child hunger. 

Kristen Olsen, 41, the West Virginia mom of three, said that since she’s returned to working in an office, she’s struggling with the addition of child care costs on top of a $75 rent increase in January. The rising price of groceries and the need to meet her electric, water and car payments added to the burden. The child tax credit, however, made her feel able to meet her family’s basic needs.

Today, she’s back to juggling payments, hoping none of her bills get too far behind. The loss of the child tax credit, she said, felt like “a cruel joke.”

“It’s like saying, ‘Here’s how your life could be, this is what it would be like if you didn’t have to worry so much every month, here’s how it feels to know you can pay your bills,’” she said, “and then they just pull the rug out from under you.”

The question that parents, advocates and politicians are now asking is whether the proverbial rug is going back into storage or if there is a future for the tax credit that guarantees income for families across the U.S. 

In the meantime, however, parents emphasized that life has become noticeably harder without it, even though just six weeks have passed since the last payment. 

Krystal Peters.Courtesy Krystal Peters

“I’m just very disgusted with our government, with Congress because these men and women are dangling this life in front of us,” Krystal Peters said from her hotel room in Chicago, where she was staying with her 2-year-old to escape the cold. “Just figure it out. All I got is anger and disgust right now. They’re stealing dignity from us, they’re making us feel hopeless, so maybe just forget it. They’re going to do whatever they want anyway.”   

‘An extreme long shot’

It remains unclear what Congress may do, however, especially as Democrats contend with the demands of Sen. Joe Manchin, D-W.Va., whose essential vote in an evenly split Senate can decide the future of the Build Back Better agenda. 

Manchin had previously proposed work requirements on those families that receive the expanded child tax credit, and he has signaled his desire to lower the income threshold as well. 

A member of Congress familiar with the ongoing negotiations said that there appeared to be two avenues forward: accepting the limitations that Manchin has proposed, including possibly work requirements, or pushing a bill forward independent of the Build Back Better agenda and trying to find some compromise with 10 Republicans to get to a 60-vote threshold. The trouble is that the more liberal wing of the House would also likely have to be convinced to pass it through that chamber, and that may prove to be difficult. 

To progressives, the work requirements would be more than a complication for negotiations, the member said. Their view is that it would play on stereotypes of low-income people who receive welfare and embolden efforts to place similar requirements on other safety net policies — such as Medicaid and the program commonly known as food stamps.

“So, either way, it’s an extreme long shot,” the member added.

Still, its continued lapse could be dire for Democrats ahead of a tight midterm election that could decide control of the House and the Senate.

While it seems unlikely that a bipartisan proposal could come together in the Senate, there is some interest among Republicans to create some kind of similar payment for families despite many of the party emphasizing the policy’s cost. 

Sen. Mitt Romney, R-Utah, proposed a bill last year to create a form of the child tax credit, but it would be paid through the Social Security Administration and would make massive changes to the tax system, as well as slash federal welfare and social programs to pay for it. 

Sen. Michael Bennet, D-Colo., who has led negotiations for the child tax credit and championed the idea for years, said in a call with reporters that finding a compromise with Republicans would not be the preferred route, but it could be a pathway forward if all else fails. 

While he strongly disagreed with the way Romney would fund his proposal, Bennet said that it showed there was some bipartisan interest. 

“The policy is the same, and I think that creates an important basis for a bipartisan negotiation,” said Bennet, who last week sent a letter to President Joe Biden with four other Democratic senators urging him to secure an extension to the child tax credit. “If Build Back Better doesn’t pass or if some new version of reconciliation doesn’t get done, I do think we’re going to have to consider doing this on a standalone basis — and I look forward to having that conversation with Democrats and Republicans to get it done.”

Congress may also not be the only avenue by which states could see some relief.

As politicians on Capitol Hill have faltered, some state legislatures are picking up the baton and taking a look at what provisions they could change at the state levels to provide a similar tax credit. 

Samantha Waxman, a senior policy analyst at the Center on Budget and Policy Priorities’ State Fiscal Project, said that six states have so far created proposals that mirror some elements of the policy, but many may have been waiting to see what happens with the Build Back Better negotiations before passing their own form of the tax credit. 

So far, Massachusetts is the furthest along in pursuing the policy. In the state’s latest budget proposal, the Legislature converted dependent exemptions for children 12 and younger into a fully refundable child tax credit that covers two kids at $180 per child.

“States are taking the initiative, especially with all the revenue surpluses they have and saying, ‘We have the means in our state, families are really struggling and the child tax credit is a great way that we can continue to help families while they’re still being harmed by the pandemic,’” Waxman said. 

A rejection or a foundation?

The open question is whether the anger and frustration felt among many parents could be turned to advocacy that might move the needle in Washington. 

Advocates said that it has been a difficult time to organize and to continue pushing for legislative change. After Donald Trump’s presidency, the protests against the police killing of George Floyd and the pandemic, they said it has become a challenge to get people to show up to protest or ask for them to send another letter or make another phone call to senators and members of Congress. 

“People are just trying to take care of their families,” said Dorian Warren, the president of Community Change, a national progressive advocacy group. “And then you ask them to come to this rally and bring their mask, and they’re just like, ‘no.’ I don’t think that’s because they don’t believe in the ideas, but because they don’t know if it’s really going to matter, and everyone is just completely exhausted.”

Julie Kerksick, the senior policy advocate for Community Advocates Public Policy Institute, a Wisconsin-based progressive advocacy organization, has a career spanning more than 40 years in which she’s pushed for tax credit reform to help low-income families.

She said watching the debate among Democrats over Build Back Better has been dispiriting, especially once it became clear that expanded child tax credit would be allowed to expire. 

“For us, it has been absolutely devastating to see it come to nothing, and then, apparently, just sit on a shelf,” she said. “I just don’t know how many more times we can try to make the case.”

Warren, however, remains upbeat about the future of the expanded child tax credit. It just may take longer than most had hoped. 

He said that no matter what happens, policymakers will be able to pull immense data from the six months that the credit was available to families, which will drive conversation in the future. 

“Maybe, just maybe, in an optimistic way, what we learned the last six months of the child tax credit sets a floor and a foundation,” he said. “That will make things different for the next fights to be had. Because it’s going to be really hard to continue to argue against the mounting evidence of the actual impact of this expanded program.”