Washington, D.C. — As the third monthly payment of the expanded Child Tax Credit reached millions of working households on Wednesday, a group of more than four hundred economists sent a letter to Congressional leadership calling for the expanded credit to be made permanent.
“Expanding the CTC would yield a long-term fiscal payoff,” the economists wrote. “Once the full effects of the CTC expansion are accounted for, the net cost to taxpayers of the expansion has been estimated to be as little as approximately 16 cents for every $1 of new benefits.”
The Census Bureau’s July Jobs Report showed the Child Tax Credit had a “big impact” on job growth and a recent economic analysis from the Niskanen Center shows an expanded credit will result in $27.6 billion in additional spending, provide support for more than 500,000 new jobs, and produce an estimated $1.9 billion in revenue for local governments.
The letter can be read here:
Dear Majority Leader Schumer, Speaker Pelosi, Minority Leader McConnell, and Minority Leader McCarthy:
We, the undersigned economists, strongly support making permanent the 2021 expansion of the Child Tax Credit. The expanded Child Tax Credit can dramatically improve the lives of millions of children growing up in the United States and promote our country’s long-term economic prosperity.
Childhood poverty is a staggering problem in the United States, affecting approximately one in seven children, and one in five children of color, even before the Covid-19 pandemic began. Children growing up in poverty begin life at a disadvantage: on average they attain less education, face greater health challenges, and are more likely to have difficulty obtaining steady, well-paying employment in adulthood. A panel of experts convened by the National Academy of Sciences estimated that because of such effects, childhood poverty costs the country between $800 billion and $1.1 trillion each year.
Economic research suggests that expanding the Child Tax Credit (CTC) would be beneficial for the following reasons:
In summary, a permanently expanded CTC would yield tremendous immediate and long-term benefits for children and their families and would be unlikely to meaningfully reduce employment. For these reasons, we believe that the benefits of an expanded CTC far outweigh the costs.