Policy is not getting the bulk of the attention in this presidential race, but don’t let that fool you into thinking Joe Biden isn’t doing policy. Biden on Thursday proposed a temporary version of the American Family Act, to be in place “for the duration of the crisis” of COVID-19 and the accompanying economic downturn.
What does that mean? Well, the American Family Act (AFA) is an enormously important proposal to reduce child poverty in the U.S., authored by Sens. Michael Bennet and Sherrod Brown. It would give families with children aged 6 to 17 $3,000 per year per child, and $3,600 for children under 5. But it wouldn’t take the form of the existing child tax credit, which comes as a lump sum at tax refund time and doesn’t help the poorest families at all. The AFA, and Biden’s temporary proposal, would benefit all families with kids, and would be offered monthly so that struggling families could pay for diapers and food.
Right now, you have to make at least $2,500 a year to get anything from the child tax credit, and you don't get the whole thing unless you make $11,833.33. That’s not a lot of money, but it still leaves out many families—by definition the ones that need help the most. And “Because the CTC is currently paid out through tax refunds, it sometimes leads to a perverse situation in which families use it to pay down debt they never would’ve had to incur if they’d gotten the money earlier,” Vox’s Dylan Matthews points out.
The American Family Act would pay out $250 per month for kids ages 6 to 17 and $300 per month for kids 5 and under. That’s a nice chunk of money for any family outside maybe the highest 10% of earners, and for many families it would be a total game-changer. Researchers estimate, of the 2019 version of the congressional bill, that 4 million children would be lifted out of poverty, dropping the child poverty rate from 14.8% to 9.5%. Deep poverty, which means kids living at half the poverty threshold or less, would drop from 4.6% to 2.4%. For these kids it would mean not going hungry, not having the rashes and infections caused by diapers not changed frequently enough, having more stability in their lives, improved health and education outcomes.
Importantly, the measure could be passed through reconciliation in the Senate.
This should be a permanent federal law. But it would be a powerful intervention until the COVID-19 economy recedes.