Youngster poverty surged after stimulus checks, tax credit ended

Children ages 3 to 5 participate at the Head Start classroom in the Carl and Norma Miller Children’s Center in Frederick, Maryland, March 13, 2023.

Maansi Srivastava | The Washington Post | Getty Images

Child poverty more than doubled in the U.S. last year after financial assistance that supported families during the earlier days of the Covid-19 pandemic expired, the U.S. Census Bureau said Tuesday.

The child poverty rate surged to 12.4% in 2022, up from 5.2% in the year prior, according to the bureau’s data. The Census Bureau attributed the increase to the expiration of expanded child tax credits and the end of stimulus checks that helped keep people afloat during the economic downturn caused by the Covid-19 pandemic.

As pandemic-era financial assistance fell by the wayside, families were also under significant pressure from inflation. The cost of living surged 7.8% from 2021 to 2022, the largest annual increase since 1981, according to the Census Bureau.

The U.S. had made historic gains in fighting child poverty during the pandemic due in large part to the expanded tax credits. The child poverty rate fell 46% in 2021 to the lowest level on record, according to Census data released last year.

But the end of key pandemic benefits and surging inflation wiped out that progress. Liana Fox, a Census official, told reporters during a press conference Tuesday that child poverty returned to its levels prior to the pandemic.

The overall poverty rate also spiked nearly 5%, the first increase since 2010, according to the data. The median income of all workers fell 2.2% in 2022 compared to the year prior, according to the Census.

Political stalemate

The Democratic-led Congress injected nearly $2 trillion of stimulus into the economy through the American Rescue Plan in March 2021. The Democrats passed the relief without a single Republican vote through a process called budget reconciliation.

The massive aid package significantly increased child tax credits on a temporary basis. Working families received $3,600 for children under the age of 6 and $3,000 for kids ages 6 to 17. The legislation also provided a third round of stimulus checks, following earlier relief under the Trump administration.

The expanded child tax credits expired at the end of 2021. Republicans won control of the House in the 2022 midterm elections and Congress has been unable to reach an agreement to restore the credits.

President Joe Biden, in a statement Tuesday, blamed the GOP for the lapse of the tax credits and vowed to fight to restore those benefits as he campaigns for a second term in office.

“The rise reported today in child poverty is no accident — it is the result of a deliberate policy choice congressional Republicans made to block help for families with children while advancing massive tax cuts for the wealthiest and largest corporation,” Biden said.

The Census data showing a spike in child poverty does not take into account the end of several other pandemic benefits this year. Expanded food benefits lapsed in March, and millions of people have been kicked off Medicaid after protections that kept people enrolled in the program expired last spring.

Researchers at Georgetown University estimate more than 760,000 children have lost Medicaid coverage. The federal government has warned states that many children may have been kicked off despite still being eligible for the program.

The data published by the Census Bureau on Tuesday differs from the official poverty rate, which remained essentially unchanged at 11.5% in 2022.

The official poverty rate looks at people’s income before taxes and does not include stimulus payments and tax credits. The Census data that showed child poverty doubling is an alternative measure that looks at income after taxes and includes these benefits.

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