On a weekday evening in early July, Jim Lysen, a retired health-clinic director, and Ed Fallon, a grandfather and veteran, ignored the pouring summer rain as they knocked on the front door of a townhouse in an affordable-housing development on the banks of the Androscoggin River in Lewiston, Maine.
“I am a volunteer with the Maine People’s Alliance, and we’re making sure people know about the child tax credit,” Lysen said. “That’s another stimulus payment?” a grandmother named Eileen Pelletier asked, as Lysen and Fallon provided her with a damp fact sheet. “It was part of a stimulus package,” Lysen told her.
A few doors down, a sullen teenager answered, telling Fallon that there were multiple kids in the home. “Did you get the stimulus checks?” Lysen asked. “No,” the teenager said, a good indicator that the family would miss out on the child-tax-credit money too. “Do you know about the CTC?” The kid shrugged before closing the door.
The initiative Lysen and Fallon were there to promote is a technical change to a federal tax expenditure that is also the most radical expansion of the welfare state since the Great Society. Beginning this week, the IRS will start sending monthly, no-strings-attached cash payments to an estimated 65 million children living in low- and middle-income families, potentially slashing the country’s child poverty rate by 45 percent.
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Yet more than half of likely voters said they knew “little or nothing” about the program in a May poll conducted by Data for Progress, a statistic borne out by Lysen and Fallon’s canvassing. Some of the parents who answered the door had no idea what the two were talking about; most others said they had heard of the child tax credit but had no idea who would get it, how, or why. Nobody really understood what it was, aside from the drenched guys with their clipboards.
The new policy will become tangible when money starts hitting bank accounts this week. An estimated 88 percent of recipients will not need to do anything to get the cash—the IRS will send the money automatically. But an estimated 4 million to 8 million eligible children are at risk of missing out, because their parents or guardians do not need to file taxes or are not filing taxes—and because they might not even know the complicated, obscure-sounding, and scarcely advertised policy exists.
Lysen shuffled some papers as a woman with a preschool-age girl at her feet answered his knock. “We’re making sure that people know about the child tax credit. Have you heard of that?” he said.
The person answering the door was Christina Romano, a refugee from Angola who was expecting her fourth child in the fall, newly unemployed because her pregnancy prevented her from working long hours—and at risk of never getting hundreds of dollars a month intended to help her and her kids, Lysen and Fallon feared.
Had she heard of the child tax credit? No. Had her family gotten the stimulus checks? No, she did not think so. But, she indicated in halting English—her fifth language—her family could use the help. They were struggling to pay for daycare for their youngest. Later, she told me that the family would spend some of the cash, if they got it, on food.
With the federal government doing little to reach families like Romano’s, nonprofits and community groups—legal-aid societies, volunteer tax preparers, places of worship, child-care centers, food banks, homeless shelters, and community-organizing groups such as the Maine People’s Alliance—have stepped in. Fallon and Lysen conferred and decided to seek out more help for Romano. “Anybody speak Portuguese?” Lysen shouted to other organizers fanned out across the housing project, knocking on doors in the rain.
The child tax credit is a Clinton-era policy that, of late, has provided families with up to $2,000 a year per child. Because of the way the credit was structured, the poorest families rarely got the full amount and often got nothing, because they did not earn enough. Family advocates and a handful of legislators on Capitol Hill have wanted to change that for decades, pushing for an expansion of the credit to move more kids above the poverty line and to better reach very poor families. It finally happened, quietly, as part of President Joe Biden’s $1.9 trillion American Rescue Plan.
The newly expanded child tax credit is a wholly different kind of welfare policy—a guaranteed income for kids. With it, the federal government will send American parents and guardians $300 a month for each child they have ages 5 and younger, and $250 a month for children ages 6 through 17. (Single parents making $75,000 a year or less and married parents making $150,000 a year or less will get the full amount; families earning up to $400,000 a year will get smaller amounts.) The monthly disbursements begin this week and continue through the end of the year, with families getting another lump-sum check next tax-filing season. As of next year, the changes revert, although Democrats are pushing to extend them or make them permanent.
Ask poverty researchers or child advocates about the new child tax credit, and their response is likely to be rapturous: “Historic.” “A game changer.” “The single most important policy in 50 years.” “Unprecedented.”
“I am a really cynical person—years and years of organizing will do that to you,” Drew Astolfi, an organizer at Community Change, a progressive civil-rights group, told me. “There are so many federal and state programs that talk pretty and don’t deliver much. This is really different. Having been hungry in my own life—it could create a level of stability and a change in financial circumstances that will be enormous to the poorest people. Enormous.”
Why enormous? Because the program itself is so big, for one. The federal government currently spends $16.5 billion a year on the Temporary Assistance for Needy Families program, or welfare. Only a fraction of that money, $6.5 billion, is used for cash benefits, with most going to workforce-development and child-care initiatives. The old child tax credit provided roughly $120 billion a year to families. The new one will provide an additional $105 billion a year, making the credit three times the size of the pre-pandemic food-stamp program.
The policy’s design is unique, and uniquely powerful too. Families will not need to fill out reams of paperwork or jump through many hoops to get the cash. There are no drug tests, work requirements, or asset tests associated with it. That will make the benefit easier to get and maintain than others, like welfare and food stamps, advocates say, particularly for stressed, time-poor single parents. “It’s really hard to add racist, sexist, classist eligibility requirements” to a tax program, Ben Chin, the deputy director of the Maine People’s Alliance, told me. The IRS “is not giving piss tests.”
[Annie Lowrey: Low-skill workers aren’t a problem to be fixed]
Moreover, recipients will receive unrestricted cash. You can’t use food stamps to pay for diapers. You can’t use a housing voucher to gas up your car or pay a babysitter. But parents will be able to use this money on whatever they need to, stabilizing family finances in a way no other program does. “There’s just something so simple about it,” Helene Stebbins, the executive director of the Alliance for Early Success, a nonprofit that advocates for early-childhood programs, told me. “Want to end poverty? Put money in people’s pockets.”
Given its size and its simplicity, the proposal is expected to lift 4.1 million kids out of poverty this year alone—and many more if the policy is made permanent. Advocates expect it to have sweeping and immediate effects on school outcomes, childhood nutrition, and rates of homelessness. In the coming years, if extended, they expect it to increase the labor-force participation of new parents and narrow the testing gap between Black and white students. In the longer term, it might increase educational attainment, raise incomes, reduce crime rates, cut health expenditures, improve productivity, and extend life expectancies around the country.
At the housing development where the Maine People’s Alliance volunteers were canvassing, residents were straightforward about how much the cash would help, particularly given how hard it had been to have little kids at home during the pandemic and given how fast the cost of living is rising in central Maine.
During a break from the rain, a volunteer named James Dean knocked on a door belonging to Michelle Demand, a mother of three and stepmother of three more. They talked through the details of the child tax credit for a few minutes, before she shared how it might change her life. She had been unemployed since the pandemic forced the closure of the child-care center where she had worked cooking meals, she told me. The family needed to move to a bigger place but could not find anything affordable—they were $4,000 behind on rent, and some of the kids were sleeping on blow-up mattresses in the living room.
For the money to do any good, though, it needs to end up in families’ mailboxes, bank accounts, and wallets. While the child tax credit will do that more simply and automatically than many other safety-net programs, it still stands likely to leave millions of families—disproportionately the poorest and most fragile ones—behind. Advocates are particularly worried about families experiencing homelessness or housing instability, and those without internet access or a bank account. They also worry about families in which a parent is incarcerated, has a language or literacy challenge, is sick or disabled, or has a different immigration status than their kid. (The citizen children of undocumented parents frequently miss out on aid they qualify for.)
Awareness, as Lysen and Fallon have found, is a major problem. The expanded child tax credit does not have an easily recognizable nickname, like “Obamacare” or “stimmies” or “food stamps.” The policy changed with no fanfare and little debate, unlike, say, the Affordable Care Act in 2010 or the welfare changes made by the Clinton administration in 1996. Data compiled by Stanford researchers suggest that the credit is barely being talked about on cable news, compared with the vaccines or Donald Trump.
[Annie Lowrey: The Americans who knitted their own safety net]
The federal government has done little to promote it—and virtually nothing to make sure it is getting to the millions of kids whom child advocates are most worried about. Uncle Sam has spent billions on “navigators” to help people sign up for health care through the ACA and on nationwide advertisements about it. No such money exists for the child tax credit, because Congress did not appropriate it. And it has fallen to the IRS—the scary taxman, and a severely understaffed agency with no experience as a welfare-benefits administrator—to get the money out.
While the policy might be simpler than others, that does not mean it is simple. The underlying mechanism is eye-crossing in its complexity: The payments are a temporary monthly advance on a newly fully refundable tax credit, with a lump-sum addition next year. (Try to explain that in less than two minutes to someone while standing on their doorstep in the rain.) Things are even more complicated for people who are not filing taxes: They need to use an online portal to get the cash, requiring them to have an email account, good command of English, and access to a computer, because the site is not mobile-friendly.
The government has failed to consider the needs of the neediest families in its programmatic design, advocates say. “We have to acknowledge that a lot of our families have been left behind by the digital world,” Oleta Garrett Fitzgerald, the director of the Children’s Defense Fund’s southern regional office, told me, talking about trying to get families to sign up in the Mississippi Delta region. “We still have to use 20th-century means of reaching some families—not everyone is set up to be doing things online. We have to have snail mail and use the phone, and we have to reach people in person.”
It has fallen to volunteers and nonprofits to reach the millions of kids who might not get the money. At the housing development, a canvasser talked with a dad who split custody of his kid equally with the kid’s mother. But she had been claiming all the benefits. What was he supposed to do? Fallon and Lysen talked with another person about back child support, and whether the child tax credit payments would be garnished. Other advocates told me they struggled to help families who owed taxes, or would not take any benefit for fear of being deported, or had complicated and informal custody arrangements, or did not have a stable address, or were afraid of filling out any forms for the IRS, or were convinced that signing up for the child tax credit would put their other benefits at risk.
As the rain kept pouring down, a volunteer named Mohamed Ibrahim came over to assist Lysen and Fallon as they spoke with Romano. An immigrant from Djibouti, Ibrahim spoke French, and was able to converse with her. She gave him details on her immigration status, work history, and due date, and he was able to tell her how to use the IRS portal to make sure that her family got the hundreds of dollars a month to which the family was entitled, in case the money did not come automatically.
“It helps to knock on a door,” Lysen said.
