Parents brace for more limited Child Tax Credit in Democratic dealmaking
A deal might mean expanded monthly payments could end next year instead of 2025.
Brihanna Sims, a 27-year-old school bus driver and mother of a 7-year-old daughter, faces a financial pinch each summer when the number of routes are scaled back.
In summer 2020, classes held virtually because of COVID-19 meant even fewer routes and more strain. Although she received the Child Tax Credit before this year, the regular monthly payments and larger sum from the expanded Child Tax Credit became a "safety blanket" for Sims and her daughter, Addilynn, Sims said.
"She doesn't have to see me stress about, 'Oh my goodness, I didn't get enough hours this month. Am I gonna make enough? Am I gonna make rent? Are we gonna be OK?'" Sims said.
Under a provision in the American Rescue Plan, 39 million families are now eligible for the expanded Child Tax Credit, according to the IRS, but the current program is set to lapse at the end of the year. President Joe Biden had proposed extending it through 2025, but it now may be extended only one additional year as Democrats pare back their social spending package amid pressure from moderates to cut the cost of the president's plan.
Emma Mehrabi, director of poverty policy at the Children's Defense Fund, said the monthly payments have benefited children, parents and caregivers in different ways -- from monthly rent to groceries to newly established savings accounts.
"They've never experienced this type of income predictability each month, that has maybe given them a little bit of extra boost, a sense of security and relief and joy," Mehrabi said.
Mehrabi also said the monthly payments, rather than the smaller payouts that used to come only during tax season, can make a life-changing difference.
"That can mean something to somebody who has felt disillusioned and fearful of the government," Mehrabi said.
The first Child Tax Credit payment alone lifted 3 million children above the poverty line from June to July, according to a Columbia University study.
Kris Cox, deputy director of federal tax policy at the Center on Budget and Policy Priorities, said the expanded program is an opportunity for the U.S. to get up to speed with other nations.
"Many other developed countries have had child allowances that recognize that parents and families have particular financial obligations to raise children," Cox said.
"We know that kids who grew up in homes with more income are healthier, that they do better in school, that they earn more as adults," Cox added. "It's just so important to give children a strong start in life."
Sims said she's being realistic and planning for what happens if the expanded Child Tax Credit payments disappear.
She also channels her energy into activism, volunteering for a coalition in Minnesota called the Barbershops and Black Congregation Cooperative that works to inform people in the community about political figures and policies, including the Child Tax Credit.
"Right now, I am preparing myself for things to go back to the norm," Sims said. "Going back to that kind of budget that I had before, and putting a real tightening on things. But I'm also keeping myself positive that maybe this can change."
ABC News' Rachel Scott, Sarah Kolinovsky, Molly Nagle and Libby Cathey contributed to this report.
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