Loss of child tax credit is hurting Arkansas families, advocates say

WASHINGTON — Jasmine James didn’t use her federal child tax credit money on the extravagant. Instead, the 22-year-old mother from Jacksonville relied on monthly checks to help her with the basics of life: her car insurance payment, her electric bills and the food for her young children.

Now that the monthly payments have expired, she is moving forward with $600 less each month. To cope, James said she took out two private loans from payday lenders to subsidize her bills. “If they bring it back it will help a lot more people because the bills are going up. The lighting bills are going up. The rent is definitely going up. The gas is going up,” said James, mother of a 2-year-old girl. and a 3 year old son.

James’ household is among tens of thousands of Arkansas families who received their final monthly payments in December.

According to the Treasury Department, about 350,000 child tax credit payments, covering about 602,000 children, were paid to Arkansas families that month. In total, Arkansas families received more than $160 million in payments under the program that month.

Monthly child tax credit payments, which gave parents up to $300 per child per month, expired after Senate Republicans opposed President Joe Biden’s sweeping social and environmental legislative package, also known under the name “Build Back Better”.

After it passed the House, Senate Democrats, facing public opposition from fellow U.S. Democrat Senator Joe Manchin in late December, were unable to garner enough support to push the package through to the bedroom.

In Arkansas, proponents of monthly payments describe its expiration as a blow to families across the state. They say the money has fought child poverty and given families financial leeway as they navigate the coronavirus pandemic.

Arkansas is home to the sixth highest poverty rate among the 50 states and has large disparities in median black and white household incomes.

The state’s median household income is $49,475, well below the national average of $64,994, according to five-year estimates from the U.S. Census Bureau.

There are large racial disparities in household income levels in Arkansas.

In Arkansas, the median income of non-Hispanic white households is about 62% higher than that of black households, according to the bureau’s five-year estimates. The median household income for non-Hispanic white families is $53,335 and that same measure is $32,844 for black households, according to bureau data.

Kymara Seals, policy director of the Arkansas Public Policy Panel, described the payments as a “lifeline” for families. The Policy Panel is a nonprofit organization that advocates for issues of social and economic justice.

“It’s so unfortunate that these payments have been discontinued,” she said. “And interrupted at a time when this country could afford to continue making these payments. So the timing was terrible.”

Families nationwide also continue to face high consumer prices, including high costs for food, electricity and gasoline.

Republicans attribute the inflation to legislative policies supported by Democrats. Last year, Arkansas’ all-Republican congressional delegation voted against the $1.9 trillion US bailout package, which included direct monthly payments to families.

“When you have more money for fewer goods, you inherently have more inflation,” said US Senator Tom Cotton. “We warned Democrats about this at the time, and it wasn’t just Republicans who warned Democrats.”

Cotton, a Republican from Arkansas who opposes the return of monthly payments, said the payments contribute to inflation by adding more money to the economy at a time when supply is tight. Across the country, families received about $92 billion through monthly payments, according to Treasury Department figures.

But Bruno Showers, senior policy analyst at Arkansas Advocates for Children and Families, said child tax credit spending alone was not enough to fuel inflation.

The organization, which advocates for issues affecting children and families, was in favor of the monthly payments.

“It’s a significant amount of money for those individual families who are receiving it,” he said. “It helps them pay for the necessities of life. But as part of our national economy, it’s really small.”

Columbia University’s Center on Poverty and Social Policy credited the Expanded Child Tax Credit with keeping 3.8 million children out of poverty in November. The center reported that the monthly child poverty rate rose from 12.1% in December to 17% in January, the month families stopped receiving direct payments.

The center bases its figures on the Supplemental Poverty Measurement Framework which takes into account non-monetary government assistance. The Census Bureau began publishing the measure in 2011. It takes into account other “government programs designed to help low-income families and individuals who are not included in the official poverty measure,” according to the site. Census Bureau website.

U.S. Representative Rick Crawford said child tax credit payments were indiscriminate and not all families needed the money.

“Really, I think we don’t need it anymore, so I don’t really think we need to bring that back,” the Jonesboro Republican said.

Crawford said there were labor shortage issues in his district and employers were calling asking how they could get people back to work.

“We have a problem at home, quite frankly, and across the country, where people aren’t at work and could be,” he said.

That’s not the reality for James, the mother of two in Jacksonville.

James works four 10-hour shifts a week as a fitter and loader in an Amazon warehouse. Her job doesn’t offer extra shifts at this time of year, she said. And even so, working more hours would mean missing out on quality time with her young children, she said.

In general, there are people who work but don’t earn enough money, she said.

“Working for minimum wage, you can barely afford the rent,” she said.

There are parents who are also dealing with the effects of a long covid and are unable to work or are limited in their ability to work, said Donna Massey, president of Arkansas Community Organizations State. , a group that advocates for low-income families. .

Anecdotally, families are feeling anxious again with the loss of child tax credit payments, said Terry Bearden, executive director of the Arkansas Community Action Agencies Association. The organization represents community action agencies that fight poverty and provide assistance to moderate to low income people in Arkansas.

“Few people waste money on useless things,” she said.

When parents worry about paying rent or feeding their families, they’re not well placed to make big leaps, like going back to college or starting a small business, she said. The monthly payments, she said, gave families a sense of stability.

Other members of the Arkansas congressional delegation criticized the tax credit payments people received last year.

U.S. Representative Bruce Westerman, a Republican, said he was not in favor of monthly child tax credit payments.

“As part of the ‘Build Back Broke’ program, Democrats are trying to reimagine the program as a no-work welfare program,” Republican U.S. Representative Steve Womack said in a statement, referring to the social and environmental legislative package. supported by Democrats.

US Representative French Hill, in a statement, said inflation was attacking household budgets and wage growth. He blamed the high consumer prices on the Democrats’ “tax and spend policies”.

“The best way to reduce poverty is not new government handouts, but meaningful reforms to fight inflation,” he said, also pointing to the alleviation of the “tax burden” on small businesses.

When asked if he would support restoring the monthly payments that happened last year, U.S. Senator John Boozman said he “supports looking at the program in its entirety and trying to come up with a sort of compromise.

The monthly child tax credit payments were made in an emergency to get the country through covid, he said. But the covid landscape has changed, and the United States now faces “rampant inflation,” the Republican lawmaker said.

“The question is what are you doing now?” he said. “Now we are in a different situation.”