By David C. DeWitt, Michigan Advance
A Journal of the American Medical Association (JAMA) article in October confirmed previous research that food insecurity increased substantially after the expiration of federal monthly advanced child tax credits on Jan. 15.
The study looked at the period between January and July of this year in a series of national surveys, and found a nearly 25% increase in food insufficiency, impacting Black, Hispanic and Indigenous families the most.
The article published Oct. 21 in JAMA, “Association of the Expiration of Child Tax Credit Advance Payments With Food Insufficiency in US Households,” involved a cross-sectional study of repeated surveys from a nationally representative sample of 592,044 U.S. households.
“The findings of this study suggest that the loss of monthly (child tax credit) payments was associated with an increase in the prevalence of households with children in the U.S. reporting sometimes or often not having enough to eat, a condition associated with adverse health outcomes across the life span,” the article’s findings conclude.
The Advance Child Tax Credit (CTC) monthly payments from the American Rescue Plan Act (ARPA) were administered to more than 35 million households with children in the U.S. between July and December 2021. Numbers from the Center on Budget and Policy Priorities show the credits benefited an estimated 1.97 million children in Michigan. The tax credits were associated with a substantial decrease in food insufficiency, the study said.
Anne Kuhnen, a tax policy analyst for the Michigan League for Public Policy (MLPP), says the report’s findings come as no surprise.
“This is something that a lot of us in the policy world have already known for a long time — that when Congress failed to act on expanding or continuing the monthly child tax credit payments that were part of the American Rescue Plan, that a lot of Michigan kids and families were going to suffer as a result,” Kuhnen said.
Rising inflation has made things even worse for those families, who were already in need of the payments to pay for housing, food, clothes, childcare and other basics before costs started rising.
“Families in Michigan are absolutely being squeezed,” Kuhnen said.
She hopes that U.S. senators will keep the tax credit payments “top of mind” while considering their end-of-the-year budget bill, and make reinstating the payments a priority.
Some states have implemented their own child tax credits. Michigan is not among them.
The GOP-controlled Michigan Senate last spring introduced a small, nonrefundable version of the program as part of a larger tax cut package that Gov. Gretchen Whitmer vetoed — but that credit plan was “really problematic,” Kuhnen said, as the nonrefundable nature of the program would “leave out the lowest income families and most vulnerable children.”
“That wasn’t actually something that was going to help the problems that have been caused by the end of monthly [federal] child tax credit payments,” she said.
Under ARPA, three major changes to the credit were enacted for tax year 2021: an expansion of eligibility to include families earning very low or no income; a boost in credit amounts from a maximum credit of $2,000 per child per year previously to $3,000 per child aged 6 to 17 per year and $3,600 per child younger than 6 per year; and provision for half of the credit as an advanced monthly payment between July and December 2021.
As a result of these changes, an estimated 92% of families with children were eligible to receive $250 to $300 monthly per child between July and December 2021, the study said. National data show that parents report spending the monthly CTC payments on food, utilities, rent, clothing and educational expenses, the article said.
These monthly payments expired in January 2022 after U.S. Congress failed to extend the policy.
During a series of surveys done by researchers, just before CTC expiration, unadjusted household food insufficiency was 12.7% among households with children.
In late January and early February 2022, following the first missed CTC monthly payment, 13.6% of households with children reported food insufficiency, increasing to 16% by late June and early July 2022.
“Given the well-documented associations between inability to afford food and poor health outcomes across the life span, Congress should consider swift action to reinstate this policy,” the JAMA article recommended.
These latest findings reflect earlier research done by the national nonpartisan Brookings Institution research group and published in April 2022 in a report titled, “The impacts of the 2021 expanded child tax credit on family employment, nutrition, and financial well-being.”
Brookings researchers said the temporary tax credit expansion “was unprecedented in its reach,” and that it lifted 3.7 million children out of poverty as of December 2021.
“The expanded CTC significantly improved food security and healthy eating among those eligible,” Brookings found.
This is something that a lot of us in the policy world have already known for a long time — that when Congress failed to act on expanding or continuing the monthly child tax credit payments that were part of the American Rescue Plan, that a lot of Michigan kids and families were going to suffer as a result.
– Anne Kuhnen, tax policy analyst for the Michigan League for Public Policy
Moreover, that study said, around 70% of CTC recipients who were negatively affected by inflation said the payments helped them to better manage higher prices.
Apart from increased food security, other areas Brookings said the tax credits helped families included statistically significant declines in credit card debt compared to those not eligible; reductions in reliance on high-cost financial services such as payday loans and pawn shops, and also reduced rates of selling blood plasma; increased ability to manage emergency expenses and strengthening of family emergency funds; and significant declines in evictions.
Brookings also found the credit allowed families of color to make significant investments in their children’s long-term educational outcomes. Black, Hispanic and other non-white households were more likely to use the credit for child care and education expenses, Brookings found.
“We’re very hopeful that the [U.S.] Senate can ensure that these monthly payments are restored,” Kuhnen said. “But if anything, I think this election really showed that that idea is something that Americans haven’t forgotten about.”
A version of this story first ran in the Advance‘s sister outlet, the Ohio Capital Journal.
Michigan Advance is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Michigan Advance maintains editorial independence. Contact Editor Susan Demas for questions: [email protected]. Follow Michigan Advance on Facebook and Twitter.
