Legislation Would Overhaul Child Tax Credit and Reduce Child Poverty by 38 Percent
VIDEO: Watch today’s press conference unveiling the legislation
Washington, D.C. — U.S. Senators Michael Bennet (D-CO) and Sherrod Brown (D-OH), and U.S. Representatives Rosa DeLauro (D-CT) and Suzan DelBene (D-WA), today reintroduced the American Family Act of 2019 to overhaul the existing Child Tax Credit and make it a dramatically more effective tool for supporting middle-class families with kids and reducing child poverty. The bill was introduced with 36 original Senate cosponsors and 174 original House cosponsors, indicating a major show of support from across the Democratic Caucus.
The bill would create a new $300 per-month, per-child credit for children under 6 years of age and a $250 per-month, per-child credit for children under 17 years of age—increasing the credit for all children and, for the first time, making the credit fully refundable.
“I’ve met with parents across Colorado who tell me the paychecks they bring home aren’t enough to support their families, especially as the costs of child care, health care, housing, and higher education continue to rise,” Bennet said. “That’s because 90 percent of Americans haven’t seen a significant raise over the last 40 years. The American Family Act is a big part of how we respond to that problem, which I see as one of the central economic challenges of our time. This bill also addresses a problem we don’t discuss enough—child poverty—by cutting it by 38 percent. I can think of nothing more at war with who we are as Americans than allowing kids to grow up in poverty. I’m hopeful today’s strong show of support will move us closer to signing the American Family Act into law, because for the families we represent, that day can’t come soon enough.”
“All across the country, families are working harder than ever but have less and less to show for it,” Brown said. “Our bill would help put more money back in the pockets of working families and set children up for future success.”
“The American Family Act will help millions of families across the United States who are striving to provide the best possible future for their children,” DeLauro said. “In fact, according to a new study from the National Academy of Sciences, expanding the Child Tax Credit as we do in this legislation would reduce extreme childhood poverty by half. That is why we must push to pass the American Family Act and ensure that families have the resources they need to pay their bills and get ahead. Increasing the value of the Child Tax Credit, creating the Young Child Tax Credit for families with children under the age of six, and making both tax credits fully refundable would have a powerful impact on our youngsters’ health, their education, and their future.”
“Too many parents are facing difficult realities as they try to raise a family as stagnating wages, higher housing costs and student loan debt are making it harder for parents to give their children the opportunities they need to succeed,” DelBene said. “Strengthening the Child Tax Credit is a moral imperative that will help countless families in my district and across the country. By passing the American Family Act, we’ll be providing commonsense tax relief for working families and the middle class, creating a fairer system that allows parents to invest in their children’s future.”
The American Family Act would replace the current Child Tax Credit with an expanded version based on the latest research about what works to improve outcomes for children. The Columbia University Center on Poverty and Social Policy recently released a report that found the American Family Act would cut child poverty by 38 percent.
Specifically, the legislation would:
- Create a New Expanded Credit for Children under 6. The bill would create a new Young Child Tax Credit (YCTC) of $300 per month ($3,600 per year) for children under 6 years of age, up from the current maximum of $2,000 per year.
- Increase the Maximum Child Tax Credit for All Children under 17. The bill would expand the Child Tax Credit (CTC) to $250 per month ($3,000 per year) for children 6 years of age or older, up from the current maximum of $2,000 per year.
- Make Both Credits Fully Refundable. The bill would make both the YCTC and CTC fully refundable, meaning that all low-income families would receive the full credit for each child. The current CTC only begins to phase-in after a taxpayer has earned $2,500 of income and at a rate of 15 cents for every dollar of additional income. In addition, only $1,400 of the $2,000 credit is refundable. For these reasons, one-third of all children – 27 million – do not currently receive the full $2,000 CTC credit.
- Benefit the Middle Class. The bill would provide a tax credit for all individuals with children who earn less than $150,000 per year and all married couples with children who earn less than $200,000 per year.
- Index the Credit for Inflation. The bill would index both YCTC and CTC levels for inflation (rounding to the nearest $50) to preserve the value of the credit going forward. The current CTC is not indexed for inflation.
- Set Up Advance Payments on a Monthly Basis. The bill would call on the Treasury Secretary to set up monthly advance payments for the YCTC and CTC no later than a year after passage for taxpayers anticipated to receive a refund. Monthly payments would smooth families’ incomes and spending levels over the course of a year, helping them make ends meet during difficult months.
The bill was introduced with 36 original Senate cosponsors and 174 original House cosponsors.
In addition to Bennet and Brown, the following Senators cosponsored the legislation: Tammy Baldwin (D-WI), Richard Blumenthal (D-CT), Cory Booker (D-NJ), Ben Cardin (D-MD), Bob Casey (D-PA), Chris Coons (D-DE), Catherine Cortez Masto (D-NV), Tammy Duckworth (D-IL), Dick Durbin (D-IL), Kirsten Gillibrand (D-NY), Kamala Harris (D-CA), Maggie Hassan (D-NH), Martin Heinrich (D-NM), Mazie Hirono (D-HI), Doug Jones (D-AL), Pat Leahy (D-VT), Amy Klobuchar (D-MN), Ed Markey (D-MA), Bob Menendez (D-NJ), Jeff Merkley (D-OR), Chris Murphy (D-CT), Patty Murray (D-WA), Gary Peters (D-MI), Jack Reed (D-RI), Bernie Sanders (D-VT), Brian Schatz (D-HI), Jeanne Shaheen (D-NH), Tina Smith (D-MN), Debbie Stabenow (D-MI), Jon Tester (D-MT), Chris Van Hollen (D-MD), Elizabeth Warren (D-MA), Sheldon Whitehouse (D-RI), and Ron Wyden (D-OR)
The following organizations have endorsed the American Family Act: Center for American Progress, Center on Budget and Policy Priorities, Center for Law and Social Policy, Child Care Aware of America, Children’s Defense Fund, Community Change Action, Economic Security Project, First Focus, MomsRising, National Association for the Education of Young Children, National Women’s Law Center, Niskanen Center, Service Employees International Union, Zero and to Three
The following leaders in research and academia have announced support for the American Family Act:
- Kathryn Edin and H. Luke Shaefer, Co-Authors of $2.00 a Day: Living on Almost Nothing in America
- David Grusky, Professor of Sociology at Stanford University and Director of the Center on Poverty and Inequality
- Jane Waldfogel, Compton Foundation Centennial Professor at the Columbia University School of Social Work
- Hirokazu Yoshikawa, Courtney Sale Ross Professor of Globalization and Education and University Professor at New York University
- Dr. Irwin Garfinkel, Interim Dean of the Columbia School of Social Work, Mitchell I. Ginsberg Professor of Contemporary Urban Problems, Co-Founding Director of the Columbia Population Research Center, and Co-Founding Director of the Center on Poverty and Social Policy
Statements of support for the American Family Act:
“As colleagues at the Columbia Center on Poverty and Social Policy have found, enacting the American Family Act would cut deep child poverty in half, providing an income floor for families to be able to meet basic needs and bring up their children. We know what works for children - and I’m thrilled to see Senators Bennet and Brown and Representatives DeLauro and DelBene lead the way.” - Dr. Irwin Garfinkel, Interim Dean of the Columbia School of Social Work, Mitchell I. Ginsberg Professor of Contemporary Urban Problems, Co-Founding Director of the Columbia Population Research Center, and Co-Founding Director of the Center on Poverty and Social Policy
“Babies born poor face lifelong consequences for health, mental health, and success in school and in life. Asthma, obesity, diabetes, and learning disabilities are just some of the challenges that children who grow up poor are more likely to face. And they are far more likely to remain poor as adults. This means that their children, too, are at higher risk of being born — and dying — poor. Our healthcare system can’t treat all the effects of growing up poor on child and adult health. In order to stave off the chronic illnesses of childhood and adulthood caused by poverty, we need to start promoting economic mobility at the beginning of life. The American Family Act would be an enormous step forward in allowing all families to have the resources to provide their children a healthy start.” - Joshua Sparrow, MD, Executive Director of the Brazelton Touchpoints Center, Department of Psychiatry, Boston Children’s Hospital, Harvard Medical School
“The United States isn’t supposed to be a country that metes out opportunity only to children whose families can ‘buy it’ in the form of high-quality childcare, high-quality schooling, and amenity-rich neighborhoods. By increasing the size of the child tax credit for low- and middle-income families, the American Family Act is an important first step toward leveling the playing field and allowing all families, not just those that are well-off, to afford a piece of the American Dream for their children.” - David Grusky, Professor of Sociology at Stanford University and Director of the Center on Poverty & Inequality
"This proposal eliminates the kind of poverty that motivated our book $2.00 a Day among families with children, without creating disincentives to work. It sends a clear message that society values and supports the essential task of parenting, and recognizes the special burdens that all parents of children, but especially young children, face." - Kathryn Edin and H. Luke Shaefer, Co-authors of $2 a Day
“The United States stands out from other advanced economies in not having a universal child benefit that provides help to all families with children. As a result, the child poverty rate in the United States is alarmingly high, resulting in diminished opportunity for too many American children and immense costs to American society over time. Passing The American Family Act– introduced by Reps. DeLauro and DelBene and Sens. Bennet and Brown – into law would be a huge step forward towards addressing that gap, lifting millions of children out of poverty and effectively ending the most extreme forms of child poverty in America today.” - Jane Waldfogel, Compton Foundation Centennial Professor at the Columbia University School of Social Work
"The AFA marks an important turning point in the fight against child poverty. Our work simulating the effects of the AFA show that there is much more to be gained by helping the most disadvantaged children than further assisting children who already benefit from current tax credits. The AFA does just that.” - Christopher Wimer and Sophie Collyer, Columbia University Center on Poverty and Social Policy
“This legislation if passed would have substantial positive effects on children's learning and development. During the critical early years of life, in particular, the costs of raising and caring for children can be overwhelming for many middle-class and lower-income families -- yet the levels of supports for families during these years are far lower than at later points in the life span. The child tax credit expansions as proposed will both support parents and enrich the developmental potential of the nation's children.” - Hirokazu Yoshikawa, Professor of Applied Psychology at New York University
“The United States spends less on child and family benefits than any other industrialized country. As a result, the volatility of household income month to month, and the rising costs of services like child care, has families across the nation struggling to afford basic necessities. The American Family Act addresses this problem head-on by creating a monthly child allowance, inspired by the best in evidence-based policy. Not only would it cut child poverty nearly in half, research suggests the American Family Act would lead to stronger, more stable families, while empowering parents to invest in the diverse needs of their children.” - Samuel Hammond, Director of Poverty and Welfare Policy, Niskanen Center
“The Child Tax Credit (CTC) provides women and their families with a critical financial boost that improves health, education, and overall well-being. The American Family Act’s improvements to the CTC would help families provide the best possible start in life for their children.” - National Women’s Law Center
“We applaud Congresswomen DeLauro and DelBene and Senators Bennet and Brown for introducing the American Family Act, which expands, improves and makes fully refundable the Child Tax Credit and creates the Young Child Tax Credit, making both permanent solutions for the millions of families across the country struggling to afford child care. As families bear the majority of the burden for child care costs, the Federal government doing more to help families with low incomes gets all Americans one step closer to being able to access affordable child care. Action in Congress is one step towards progress in fixing the broken child care system in the U.S.” - Child Care Aware of America
“We welcome introduction of the American Family Act – badly needed legislation that would provide a significant boost to struggling low- and moderate-income families by increasing the Child Tax Credit, making it fully refundable, and supporting families raising young children. The last Congress will be forever remembered for passing a grossly irresponsible tax cut that benefited mega-corporations and the ultra-wealthy, leaving the rest of us to fend for ourselves and plunging the country deeper into debt. America’s moms want this Congress to boost working families and those most in need and the American Family Act would do that. It is a bill the country needs and we thank U.S. Senators Michael Bennet and Sherrod Brown and U.S. Representatives Rosa DeLauro and Suzan DelBene for championing it.” - Kristin Rowe-Finkbeiner, CEO and Executive Director of MomsRising
“American families today are getting crushed by the rising costs of living and childcare, while their wages remain flat. We know that refunds like the Child Tax Credit and Earned Income Tax Credit are a powerful way lift children out of poverty, and we should expand these policies to include more families. The American Family Act from Senators Bennet and Brown and Congresswomen DeLauro and DelBene to expand the Child Tax Credit is a step in the right direction to putting the American dream back in reach for so many families.” - Natalie Foster, Co-chair of the Economic Security Project
“ZERO TO THREE applauds the introduction of the Young Child Tax Credit in the American Family Act, which would provide a much-needed income boost to a majority of our nation’s babies and their families. Poverty impedes babies’ healthy development. With close to one in four babies experiencing poverty, the Young Child Tax Credit is an important step toward reducing economic stress on families at a time when it will have the greatest impact on their babies and toddlers.” - Myra Jones-Taylor, Chief Policy Officer at ZERO TO THREE
“America should be the best place to raise a child—not the hardest. It’s a cruel reality that the period most important for children’s brain development—the first few years of life—is also one of the times U.S. kids are most likely to live in poverty. Research makes clear that boosting families’ incomes during this critical early period won’t just help parents meet their kids’ needs today, but will pay long-term dividends tomorrow, improving kids’ health, educational outcomes, and even higher earnings in adulthood. Anyone who purports to care about ‘family values’ should support the American Family Act.” - Neera Tanden, President and CEO of the Center for American Progress
“We live in a country where working people should be able to live with dignity, raise our children to do better than we did and not have to work for poverty wages. Sadly, this is not the reality for many working parents. The American Family Act would change this by helping millions of working families like mine, as well as moms and dads who rely on me to care for their children. A lot of us live paycheck to paycheck. With this tax break, I could afford to save for my four-year-old and one-year-old’s education. More elected officials should follow Congresswomen DeLauro and DelBene and Senators Bennet and Brown’s lead and stand with working parents as we call for more opportunities to better provide for our families and thrive in our communities.” - Steffi Martinez, Waterbury, Connecticut home-based child care provider and SEIU Local 2001
“I applaud the leadership of Congresswomen DeLauro and DelBene and Senators Bennet and Brown to introduce the ‘American Family Act of 2019’ that would create a child allowance, significantly extending the current child tax credit to reach the families who need it most. The bill would increase the benefit substantially, make it fully refundable, establish a young child tax credit, authorize advance payments on a monthly basis, and adjust the benefit for inflation. The introduction of this legislation comes on the heels of the release of a National Academies of Sciences, Engineering and Medicine study A Roadmap to Reducing Child Poverty that concludes a child allowance policy of $3,000 per child per year would produce the largest child poverty reduction, and it would also address the goal of reducing deep child poverty. First Focus Campaign for Children wholeheartedly supports the ‘American Family Act of 2019’ and thanks Senators Bennet and Brown and Congresswomen DeLauro and DelBene for continuing to be strong champions for children and families.” - Bruce Lesley, President of First Focus Campaign for Children