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Kids Need Social Security

President Biden announces the expansion of the Child Tax Credit in May this year.

Even before the Covid-19 pandemic shuttered schools and put millions out of work, one in seven children in the United States lived in poverty. The pandemic pushed some additional 1.2 million children into poverty, most of whom are children of color. Today, children are the single most impoverished age group in the United States.

The US government has failed to prevent one of its most vulnerable, impressionable, and important demographic groups from sinking into deep financial suffering. American youth experience rates of poverty far higher than in peer countries, an existential crisis that demands a swift and immediate solution. Children need a program on the scale of Social Security to protect them from mass poverty.

It’s not the first time in US history that an age cohort has suffered astonishing levels of poverty without any genuine recourse. In the 1930s, senior citizens experienced rates of poverty far greater than any other age group. At the peak of the Great Depression, more elderly Americans lived in poverty than didn’t. It makes sense that the elderly were the most impoverished age group. No meaningful social safety net existed at the time, meaning that the only way for seniors to earn a living wage was through family members or working themselves. Unsurprisingly, very few senior citizens were physically able to “pull themselves up by their bootstraps,” and a limited number of their working-age children at the time had the excess earnings to pay for both their children’s and their parents’ livelihoods. Seniors were effectively doomed by virtue of their age.

Politicians and voters alike recognized this crisis and passed Social Security into law in 1935. Few pieces of legislation in American history have been as influential or successful in solving its targeted problem. The rate of senior poverty has plummeted since the passage of Social Security, from its Depression-Era peak above 50 percent down to 9.7 percent today. In fact, the program has been so successful that Americans aged 65-74 are now the least impoverished age group in the US. Repealing the law would be cataclysmic for seniors: it is estimated that the senior poverty rate would quadruple without Social Security, making it the single most effective anti-poverty program in the United States.

The law also reveals something important about the current state of children in the US. Allowing a highly vulnerable age group to sink into mass poverty at levels far greater than the rest of society is a policy choice. For seniors, politicians and voters alike decided that such an imbalance was unacceptable and took action to rectify the problem. Policymakers have not demonstrated similar urgency in lifting children out of poverty, but they should. Social Security for children is the best way to solve this problem.

The closest current program to Social Security for children is the newly expanded Child Tax Credit (CTC). Historically, the CTC has allowed middle-class families to receive financial assistance to raise their children, but low-income families have not been given equal access. The credit was not fully refundable, meaning that the full credit only applied to families paying federal income tax. Nearly 9 out of 10 low-income households pay no federal income tax, meaning that they couldn’t claim the full CTC benefit, leaving their children impoverished.

The American Rescue Plan (ARP) changed that, making the credit fully refundable so that even families too poor to pay income tax could still receive the credit as a monthly check. The ARP also increased the annual refundable value of the credit, from $1400 to a maximum of $3600.

President Biden’s newly-expanded Child Tax Credit has already made a significant impact in the three months since it came into effect. In July alone, one out of every four impoverished children was lifted out of poverty by the new CTC. To reiterate, the US wiped out a quarter of childhood poverty in one month with one program. Long-term analyses of the CTC estimate that half of all childhood poverty in the United States could eventually be eliminated by the new Child Tax Credit. This program has the potential to be as transformative for American society as Social Security was 85 years ago.

Like Social Security before it, support for CTC spans political lines. The most generous plan on the table doesn’t even belong to a liberal Democrat; it belongs to conservative Senator Josh Hawley (R-MO). His plan far exceeds Biden’s by getting rid of phase-outs for high-income parents, as well as increasing the amount of money sent each month to $1,000. Members of both parties are actively competing with each other to provide more generous versions of the expanded CTC.

Despite a few politicians on both sides proposing expanded CTC programs, there isn’t broad consensus in Congress on how the program should work going forward. The current expansion is set to expire after just one year, meaning that the progress currently being made would be undone and child poverty rates would once again rise. 

The consequences of not extending the CTC will be horrific for children, but children cannot vote themselves out of poverty. Their parents aren’t a large enough voting bloc to single-handedly protect the program—certainly not in the way seniors rendered Social Security untouchable.

It is critical that a broad base of voters, even those not personally invested in the well-being of children, mobilize to ensure that something as important as the new CTC is preserved and extended. Faced with a similar crisis in the past, the US rose to the challenge and prevented horrific suffering for tens of millions of members of a highly vulnerable group. The time has come to make such an intervention again via an expanded CTC, or else tens of millions of children will continue to needlessly wallow in poverty.

Image: Doug Mills/The New York Times