MIAMI (CBSMiami) – This weekend will mark the first time since July that 36 million U.S. families won’t receive a monthly check through the expanded Child Tax Credit.
Eligible families were receiving the $300-per-child monthly checks from the IRS to help pay for groceries and other expenses.READ MORE: Federal Government's N95 Masks Distribution Starts Monday
Florida Representatives Debbie Wasserman Schultz and Darren Soto held a virtual news conference on Friday calling for the passage of the Build Back Better Act.
President Joe Biden’s Build Back Better Act, which remains in limbo, would have ensured that families receive a payment on Friday.
Florida lawmakers want the Build Back Better Act to pass in order to make the tax cut permanent to help reduce financial insecurity, food insecurity, and poverty on Florida families.
Rep. Frederica Wilson tweeted on Friday that 2,292 children in Florida received the CTC and now none of those families are receiving the payments. She, too, supports passage of the Build Back Better Act and the return of the Child Tax Credit.
In December, 2,292 children in Florida received the #ChildTaxCredit but now, due to the Senate’s failure to pass the #BuildBackBetterAct, those families no longer receive payment. If bills come monthly, so should the checks! We must pass #BuildBackBetter & bring back the #CTC!
— Rep Frederica Wilson (@RepWilson) January 14, 2022
The Build Back Better Act calls for around $1.75 trillion in new spending which the Congressional Budget Office estimates will be mostly paid for over 10 years. The bill includes $585 billion for family benefits, $570 billion for climate and infrastructure initiatives, $340 billion for healthcare and $215 billion in individual tax credits and cuts.
For many, including working families, the loss of the Child Tax Credit payments means more stress because they don’t have enough money for food.
Parents interviewed by CBS MoneyWatch said they are planning to cut back on essentials like food as well as expenses such as cable TV to try to cope with the double whammy of inflation on top of the expired benefit. Many worried about the impact on their children.
Anti-poverty experts say the impact on children could be extreme. Without the continuation of the monthly payments, about 10 million children are at risk of slipping into poverty, according to a recent estimate from the Center on Budget and Policy Priorities (CBPP).
The expanded CTC expired on December 31 when the Build Back Better Act stalled amid opposition from Senator Joe Manchin, a Democrat from West Virginia whose support is crucial for the bill’s passage in a divided U.S. Senate. Although House Speaker Nancy Pelosi said Sunday she believes a deal can still be reached with Manchin, it would not come in time for families to receive payments this week.
Manchin has supported some form of a work requirement for people receiving the payment, out of concern that automatic government aid could cause people to quit their jobs.
Yet the tax credits did not cause an immediate exodus from the workforce, as some lawmakers had feared. The Bureau of Labor Statistics reported that the percentage of people with jobs increased from 58% the month before the monthly payments began to 59.5% last month.
There’s an academic debate over whether the credit could suppress employment in the long term, with most studies suggesting that the impact would be statistically negligible.
It’s unclear whether the CTC will move forward in its expanded form even if Build Back Better is revived. Wall Street analysts, for one, are skeptical that lawmakers will renew the expanded program, with Goldman Sachs calling a full extension “very unlikely.”READ MORE: Mark Rosenberg Acknowledges He Resigned As FIU President Because ‘I Caused Discomfort For A Valued Employee’
“A return to the pre-2021 policy looks most likely, though a much more modest expansion is still possible,” analysts with the investment bank said Monday in a report.
The size of the credit will be cut in 2022 to $2,000 per eligible child, with full payments only going to families that earned enough income to owe taxes, a policy choice that will limit the benefits for the poorest households. And the credits for 2022 will come only once people file their taxes at the start of the following year.
Nine of 10 families earning an annual salary of less than $36,000 spent the monthly Child Tax Credit payments on essentials, according to CBPP research. The top three spending categories were food, utilities, and rent or mortgage payments, the left-leaning think tank noted.
Families are planning to cut back on essentials and expenses to cope with the financial hit.
Among them is Melissa Boyles, 63, who is caring for her 16-year-old granddaughter, both of whose parents have passed away. With the extra $250 a month, Boyles was able to buy extras like a $36 roast and a type of pasta that her granddaughter liked, as well as new clothing for the teen.
To help ease the pain of losing her family, Boyles got her granddaughter a puppy, but is now worried she might not be able to pay for the dog’s upkeep.
“I am concerned about giving the puppy up — he needs shots and dog tags, which cost $6, but that’s a lot of money when you need milk and bread,” said Boyles, who explained that she and her husband are both on disability and receive a combined total of about $2,000 a month in benefits.
She is also anxious about Manchin’s reported insistence that if the expanded CTC were to be renewed, it should come with a work requirement — neither she nor her husband work given that they are disabled. In Boyles’ view, there are many grandparents like her who are taking care of their grandchildren and are either retired or disabled, and she said this requirement would simply hurt children who are at no fault.
“Why should she be punished because her parents are deceased, and we are elderly grandparents taking care of her?” Boyles said of her granddaughter.
The expanded CTC not only provided families with more cushion in their budgets, but also helped buoy local economies because the money was typically spent on groceries, rent, clothing, education, and other daily expenses.
In 2021, the enhanced program was projected to increase total U.S. consumer spending by $27 billion and generate $1.9 billion in new local and state taxes, according to a study from the moderate Niskanen Center.
Officials in Florida said this month that the state collected almost $400 million more in taxes than it had expected, pointing to the CTC as one factor behind the surplus, according to the Tampa Bay Times.
For now, families say they are reworking their budgets, with some holding out hope that the expanded CTC may return in some form. Anti-poverty experts are also continuing to advocate for the tax credit. Without legislative changes, the CTC in 2022 will revert to its prior form — a $2,000 tax credit taken annually, versus the expanded CTC’s credit of up to $3,600 per child, with half provided in monthly cash payments.
In the meantime, parents should file their tax returns as soon as they can to claim the other half of their CTC, which the IRS will provide via their tax refund, noted Greg Nasif, political director of anti-poverty nonprofit Humanity Forward. The IRS will start processing tax returns on January 24.MORE NEWS: Mural Honoring Gloria & Emilio Estefan Unveiled In Little Havana
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