(WASHINGTON) — With the economy a priority for many Americans in the upcoming 2024 election, the Democrats and Republicans are pitching plans to tackle the financial burden facing families nationwide.
Vice President Kamala Harris, the 2024 Democratic presidential candidate, is proposing a new plan to provide up to $6,000 in tax credits to middle-income and low-income families in the first year of their child’s life. This could cost $100 billion over a decade, according to the Committee for a Responsible Federal Budget.
If elected president, Harris says she will also expand the child tax credit to $3,000 for all children and 3,600 for young children. This was estimated by the CRFB to cost $1.1 trillion over a decade.
Republican vice presidential candidate JD Vance also recently floated the idea of raising the child tax credit to $5,000 in an interview with CBS.
Guaranteed income programs have similarly offered cash assistance to new or expectant mothers for years – and data has thus far found that early childhood support increases savings, housing stability, food security and more.
“It’s a smart economic investment for our country, and I was thrilled that both parties are recognizing that bipartisan nature of it, and both stepping forward to say we could take better care of our littlest and most vulnerable citizens,” said Holly Fogle, president of The Bridge Project, a privately funded guaranteed income project for new mothers.
The Bridge Project gives an unconditional $1,000 a month for three years to new mothers in low-income communities in New York. One recipient, a 34-year-old who lives in New York City’s Bronx neighborhood, said the program “saved my life.”
The recipient, who asked to be anonymous for privacy reasons, told ABC News that she and her husband separated while she was pregnant. When she left her job to give birth, she was left financially vulnerable, and the program supported her in getting the necessities for her baby.
“When I had gotten accepted, I remember honestly just crying,” she said. “I had a full breakdown, because I was so stressed about everything at that point.”
To be eligible, women must live in the specified region, be at least 18 years old, 23 weeks pregnant or less with your first child, and have an annual household income under $52,000.
The Bridge Project found that for the first cohort of mothers, savings increased by 242% and access to child care increased 63%.
In the second cohort of recipients, 63% of mothers living in transitional housing moved to more permanent housing and there was a 53% increase in food security after one year of payments.
The payments helped parents pay for day-to-day items – 46% of the cash was used for baby expenses, 20% to pay bills and the rest for other expenses including debt payments and savings, according to the Bridge Project.
A study by the Institute for Research on Poverty from the University of Wisconsin-Madison separately found that cash assistance “during infancy can have profound and long-lasting effects, including educational, behavioral, and economic or labor market advantages.”
Similarly, the Healthy Beginnings Project, privately funded by children’s accessory company Goldbug, provides pregnant participants experiencing economic hardship in Colorado with a monthly guaranteed income of $750 for 15 months.
“This is such a transitional time in a person’s life, when they give birth, have a new child, and that the money is being spent very wisely,” said Katherine Gold, CEO of Goldbug. “They’re just buying necessary items to live, like food, utilities and transportation.”
The COVID-era expansion of the Child Tax Credit of $3,600 per child under 6 and $3,000 per child between the ages of 6 and 18 reduced food insecurity, financial hardship, and brought child poverty to historic lows, according to research from Columbia University’s Center on Poverty and Social Policy.
However, this expansion expired at the end of 2021.
The child tax credit currently provides up to $2,000 per child to about 40 million families every year, according to the White House.
Critics of the child care tax argue that in its current form, families who are the most in need receive less than the full $2,000 Child Tax Credit or no credit at all because their families’ incomes are too low. Some call it a subsidy for middle- and upper-income Americans.
The Center on Budget and Policy Priorities notes that families get no credit based on their first $2,500 of earnings. Starting at $2,501 of income earnings, the credit phases in at a rate of just 15 cents on the dollar — regardless of whether a family has one, two, or more children.
“For example, a family with $12,500 of earnings receives a $1,500 Child Tax Credit whether the family has one child or two,” the center states. Some advocates argue in favor of abolishing the minimum income threshold to cover those in deep poverty, while others see the minimum income threshold as a motivator for parents to engage in the labor market.
Some critics, including Sen. Joe Manchin, I-W.Va., denounced its costs and argued that some recipients may misuse the payments.
“Because of the way it phases in with earnings, 19 million children in families with low incomes get a smaller credit than children in higher-income families, or none at all,” according to The Center on Budget and Policy Priorities. “This is backwards, providing the least help to the children who need it most.”
Copyright © 2024, ABC Audio. All rights reserved.