Adults who received advanced Child Tax Credit payments experienced less food insecurity than those who didn’t receive the payments, according to a new report by the Urban Institute. Child Tax Credit payments were included in the American Rescue Plan, a Biden Administration pandemic-relief program. Payments of up to $300 per month per child were sent to families with qualifying dependents from July to December of last year and culminated in a lump sum of cash at tax return time.
According to data compiled from the Urban Institute’s Well-Being and Basic Needs Survey, researchers found that rates of food insecurity in payment recipients dropped from 26.1% to 20%, making a 23.4 percent decrease in food insecurity, during the months the payments were sent, compared to a decrease of only two percentage points (or a 7.6 percent decrease in food insecurity) for adults who did not qualify for CTC payments.
Researchers also found that employment rates between the two groups were roughly the same.
“Although some have worried providing the maximum benefit of the CTC to all families might reduce employment, our findings do not suggest this occurred in the near term,” Elaine Maag, a senior fellow at the Urban-Brookings Tax Policy Center, said in a statement. “Overall, we see the temporary credits were associated with reduced food insecurity among families with children, without any immediate changes in work effort.”
Previous research has shown that CTC payments were used primarily for necessities like food, rent, utilities, and child care or were placed in savings. The Biden Administration and most Democratic members of Congress attempted to extend the monthly payments in light of sky-rocketing inflation, astronomical housing prices, stagnant low wages, and overwhelming student loan debt, but the attempt, part of the Build Back Better Act, was stonewalled by moderate Democrats whose votes were necessary to pass the Build Back Better plan along a party-line vote through budget reconciliation.
Opponents of the monthly payments, Senator Joe Manchin included, wrongly claimed that the extra monthly cash was being spent on drugs despite the mountain of evidence to the contrary. A report from the Center on Budget and Policy Priorities found that 4.1 million children were lifted out of poverty thanks solely to the CTC monthly payments, and a new report from the Center on Poverty and Social Policy at Columbia University shows that 3.4 million more children were living in poverty in February of this year, two months after the last CTC payment than in December 2021, when the payments stopped.
The Urban Institute research also showed a decrease in those struggling to pay their rent or mortgage and utilities during the months the CTC payments were being made compared to previous years. Other research has shown that infants whose parents received additional monthly income show increased brain development than infants whose parents did not.
The case for additional income and its positive effect not only on the quality of life but also on development is clear and proves that the U.S. should follow the lead of other developed countries and create and maintain enhanced social safety net programs like guaranteed monthly income for families.