Studies show that gains against childhood hunger were lost after the child tax break ended

An October article in the Journal of the American Medical Association corroborated previous research showing that food insecurity increased significantly after the January 15, 2022 expiry of the monthly federal tax credit for early childhood.

The study examined the period between January and July this year in a series of national surveys and found that food shortages have increased by almost 25%, hitting Black, Hispanic and Indigenous families the hardest.

The article, published in JAMA on Oct. 21, “Association of expiration of tax credit advances for children with food inadequacy in US households‘ involved a cross-sectional study of repeated surveys of a nationally representative sample of 592,044 US households.

“The results of this study suggest that the loss of monthly payments (child tax credit) was associated with an increase in the prevalence of households in the US with children reporting that they sometimes or often do not have enough to eat, a Condition associated with adverse health outcomes throughout the lifespan,” concludes the article.

Monthly payments of the American Rescue Plan Act (ARPA) Advance Child Tax Credit (CTC) were administered between July and December 2021 for more than 35 million households with children in the United States. Figures from the Center on Budget and Policy Priorities show that the loans benefited an estimated 2.37 million Ohio children. The tax credits are linked to a significant reduction in food shortages, the study said.

Under ARPA, three major changes to the balance were enacted for the 2021 tax year: an extension of eligibility to families with very low or no income; an increase in loan amounts from a maximum loan amount of US$2,000 per child per year to US$3,000 per child ages 6 to 17 per year and US$3,600 per child under 6 years of age per year; and providing half of the loan as a monthly upfront payment between July and December 2021.

As a result of these changes, an estimated 92% of families with children were eligible for $250 to $300 a month per child between July and December 2021, the study found. National data shows that parents report spending the monthly CTC payments on groceries, utilities, rent, clothing and education expenses, the article said.

Those monthly payments expired in January 2022 after the US Congress failed to renew the policy.

During a series of surveys conducted by researchers just before the CTC expired, unadjusted food inadequacy among households with children was 12.7%.

In late January and early February 2022, after the first missed monthly CTC payment, 13.6% of households with children reported food shortages, rising to 16% by late June and early July 2022.

“Given the well-documented links between inability to afford food and poor health outcomes across the lifespan, Congress should consider swift action to reintroduce this policy,” the JAMA article recommended.

These latest findings echo previous research conducted by the Brookings Institution’s national bipartisan research group and published in an April 2022 report titled “The impact of the 2021 extended child tax allowance on family employment, nutrition and financial well-being.

Brookings researchers said the tax credit’s temporary expansion was “unprecedented in its reach” and lifted 3.7 million children out of poverty by December 2021.

“The expanded CTC has significantly improved the food security and healthy eating of those eligible,” Brookings noted.

Additionally, in this study, around 70% of CTC recipients adversely affected by inflation said the payments helped them better cope with higher prices.

Aside from increased food security, Brookings said tax credits in other areas have helped families account for statistically significant decreases in credit card debt compared to those who are not eligible; reducing reliance on high-cost financial services such as payday loans and pawnbroking and reducing blood plasma sales rates; increased ability to manage emergency expenses and strengthen family emergency funds; and significant decreases in evictions.

Brookings also found that the loan allowed families of color to make significant investments in their children’s long-term educational outcomes. According to Brookings, black, Hispanic and other non-white households were more likely to use the loan for child care and education expenses.