The impact that is profound of giving
American families a bit more money


Allina Diaz began looking for work in May after she graduated from her school, the University of
Maine at Augusta. As a single mother, Diaz had attended classes as she raised her three
daughters (Lilly, 13, Annabelle, 11, and Journey, 6). Lilly 13, Annabelle, 11, and Journey six —
with a budget of just $6.

She has a deep understanding of the numbers her financial aid (a mixture of federal student
loans that combined covered the cost of living as an undergraduate student) was available
every four months and varied between $3,000 and $5,000 per installment and would be used for
the following. She earned around $500 per month working being an assistant in the office,
teaching and conducting Covid-19 exams for students.

The two daughters of her father were able to receive a total of $1,500 per month of Social
Security benefits, which could be claimed because they had lost their father when they were
young. SNAP benefits helped pay for food costs, along with Section 8 vouchers helped to
finance her home but she still had to pay an additional approximately $600 per month to pay for
the difference in costs for housing. After paying rent and utility bills and utilities, she was left with
around $1200 each month in cash to spend on other expenses including gas for her vehicle,
clothing as well as school equipment for her children, and food that was not covered by SNAP,
and other unexpected costs.

When she completed her master’s degree in justice studies and received her financial aid, the
checks and work-study payments were cut off. Diaz at the time was 34 and required full-time
employment. “I thought I was going to be able to get a job quickly,” she said.

However, with the disease impacting the majority of American life this process took a long time.
She applied for jobs with criminal justice reform organizations and social advocacy groups
throughout the summer and into autumn. Near the close of the year, the number of cases of
Covid-19 in Maine increased more than it had been at any other time during the epidemic. “My
kids were out of school constantly for 10-day quarantines,” she states. They had to stay at home
for extended periods while she was applying for positions. “It was a really rough time.”

Her financial burden could have been more severe according to her had she not started
receiving her child tax credit in July following her graduation. The tax credit that was granted —
that was enacted in the American Rescue Plan in March 2021 — was built on the existing tax
credit that a lot of parents already had yearly. The credit increased the amount families could
receive by a factor of $2,000 to $3,000 to $3,600, based on the child’s age.

The credit was also extended in its eligibility of the credit, making it available to all parents, even
those who don’t make enough to be able to file tax returns. Instead of appearing in tax time, like
it was prior to after the American Rescue Plan was passed and implemented, the funds were
available every month from July through December 2021. It was as high as $300 per child
younger than 6 and $250 for kids between the ages of 6-17. This was a clear illustration of a
plan that directly helped American families by providing them with money and ensuring that they
would know the best way to use the money.

As a mother of three children, Diaz earned $750 a month. “Those payments made it so that my
income rounded out,” Diaz states. “I had not brought in the same amount as I had been,
however, it was a great help. It came just at the right moment.”

The impact on the economy from the child tax credit’s expanded reach was significant.
According to an analysis conducted by Columbia University researchers’ Center on Poverty and
Social Policy, the tax credit quickly helped lift millions of children from poverty in July.

Congress has only approved expanded payments up to 2021’s expiration date. The advocates
of the policy believed it would eventually be extended, perhaps as a part of President Biden’s
more comprehensive environmental and social spending plan, Build Back Better. However,
Republican senators were all opposing Build Back Better and so was Senator. Joe Manchin
(D-WV) stated that he could not support the extension of the child tax credit to a larger extent
because of its absence of a work requirement, and the price of approximately $1.5 trillion in the
event that the program ran for at least a decade, as per a Congressional Budget Office
estimate. The negotiations over Build Back Better fell off in December and the tax payments
were not made.

The impact of the tax credit’s expansion expiration was as stark as its debut the first month after
its introduction: Child poverty rose 41 percent within the first month following the date that the
credit ended, according to the researchers at Columbia.

At the close of December, when Diaz discovered that Congress had not yet renewed payments
for the next year She began to worry about how she would maintain the heat throughout winter
in Maine winter. Instead of spending the holiday season together with family members, says she
was worried about whether she had enough fuel oil to run her furnace. She’d often go down to
the basement to ensure there was enough fuel in the tank to keep her home warm. “I was afraid
I’d wake up some morning,” she states, “and the kids couldn’t take a bath.”

In the six months during which the money was distributed the additional money was an extra
layer of assistance to the millions of families who truly required it. It eased some of the endless
pressure of living on or near the poverty line. It was a solid supplement for families trying to
survive an epidemic and rising inflation. Since the credit’s expiration, those who support the tax
credit’s expanded scope are dismayed at the lack of urgency within Congress regarding its

“When the child tax credit was expanded, we tracked it and we saw in real-time how many kids
could be lifted out of poverty,” says Lisa Davis, who leads No Kid Hungry, a campaign to end
hunger among children initiated by the nonprofit Share Our Strength. “We should be a bipartisan
call to restore the child tax credit that was expanded. There’s nothing that demonstrates the
inability to act within Congress greater than the current situation.”

A study conducted by the think tank for economics Urban Institute showed that half of the
families who were eligible for the credit utilized it to purchase food items, while three-quarters
used it to pay for utility bills. This is the way Odessa Davis, a 34-year-old special education
assistant in Silver Spring, Maryland, used her credit to pay off debts and used the cash to
purchase grocery items for her child Leon. In the months when she received the cash she would
worry about her payments, “and then next thing, boom, the child tax credit hit my account,” she
declares. “I didn’t have an account with a negative balance. It was a great help to replenish my
balance my gaps in the event that I was required to.” Son began looking for new recipes that he
learned about from watching anime. She gave the bok choy and then experimented with
different meals, not worrying about wasting money.

Another 30% of those interviewed through the Urban Institute said that they used the money to
purchase clothes. Diaz utilized her funds to buy school uniforms for her daughters and also to
pay car and phone charges while she sought out job offers. This is the plan Amber Roy, a
42-year-old from West Virginia, planned to do as well in order to purchase new clothing for her
teenage sons however she didn’t actually get to. Every month there was an urgent need for
funds, such as the payments they were late on during July or food items that needed to be
purchased in August.

Roy, who lives in Charleston together with her husband as well as two sons, is aware of how
much she has to pay each month: $200 for water, about $400 for the family phone bill, and $200 per month in fuel for the vehicle. Their earnings without the credit aren’t enough to pay for the
entire cost of living. She says that’s why she’s often cooking meals for her family, and then
avoiding dinner.

“I say I’m not hungry because I know there’s not going to be enough for everybody to be full,”
she declares. “I’ll take a bite of bread and peanut butter. Do what you need to do to ensure your
kids are doing well.” Recently she heard her sons discussing the laundry. The younger son was
instructing the older boy not to throw away water since it was expensive. “He’s 14. He shouldn’t
be required to know this,” Roy says. “But he does.”

The parents who didn’t use the money on necessities stated that it was useful in planning for
long-term plans and unexpected expenses — and in some instances, both. Patrick McGinty, an
adjunct professor who lives in Pittsburgh with his wife Candace and their five-year-old son Augie
took $100 of their monthly credit and put it into the 529 funds they created to help pay for
Augie’s tuition at college.

In the month of October, their furnace broke down and the money was used to pay for the repair
cost of $6,000. “It made a tangible difference,” Patrick says. Although the payments ended he
and his co-worker continue to pay $100 per month into the bank account. “We probably have
$2,000-3,000 in there that genuinely would not have existed” without the increased credit
according to him.

For families who came to rely on monthly payments, the termination of the credit expansion was
a time to alter the way they used their money, and more importantly their time. It was at a time
that inflation was beginning to make the cost of fuel, food, housing, and other consumer goods
more costly. Jeannette is a 42-year-old mother of one child from Westbrook, Maine, who
demanded to have Vox solely use her first name since she’s an asylum-seeker, claims that she’s
had to save money on food as well as school clothes for her son and that he’s not being able to
take part in swimming lessons regularly as often as he would like. “I’m sad about it,” she states,
“because it’s something that he loves, that keeps him happy.”

The consequences of losing monthly payments rippled across families. Sophia Whitehouse, 32,
lives in Ohio with her husband Ray and their two infant daughters Zac and Zoe is an educator
and school psychologist. She recently established her own private practice together with an

The family relied on the money to provide child care and summer camp to ensure she could get
a job. In the end, losing that monthly income led to her husband being required to work extra
shifts of overtime in the Walmart distribution center, where he works. This has kept Sophia off
work when she’s working on establishing her own practice. “I have to stay home more with the
kids, which is resulting in me losing money that I could be making,” Whitehouse states. “Me not
working means that more children in my area aren’t receiving the support they require as I’m not
around. The dominoes are falling over.”

The polls indicate that the majority of the voters agree with the policy. A majority of Democrats
support the plan. Some Republicans have made plans to create an additional benefit to parents
however there are some disagreements over how the benefits will be paid for and who would
benefit from the benefits. But it was not enough to prevent the expanded tax credit from falling
into legislative uncertainty as it is unclear if Congress will reconsider the program. As lawmakers
in Washington are discussing programs to help people in need the voices of those who stand to
gain the most from these programs tend to be ignored, yet they’re the voices Congress should
hear when they think about the future of the expanded tax credits.

“We have many families struggling. The inflation rate has increased and the pandemic was
averted and war is on the horizon,” says Tamara Harris who is a single mom in Indianapolis,
Indiana, who is the bus driver. She also received 250 dollars a month in the tax credit for
children. “We have nothing to help us in day-to-day living expenses, and our wages are not

Roy is also furious in particular due to the fact that her senator from West Virginia, Joe Manchin,
didn’t favor extending the payment. “He’ll never understand how it feels to walk into a
supermarket shop with a calculator in order to ensure that you don’t overspend the budget you
have set. He won’t know the feeling of buying one present for Christmas for his children
because there’s nothing else you can afford,” she says. “He says he represents the entire state
the people of West Virginia. We’re not even able to carry out everyday tasks.”

Lisa Davis, who runs the No Kid Hungry campaign, states that regardless of Manchin and
Republicans worried regarding the costs of the initiative, it’s a bigger cost to have so many
children in poverty. “There’s so much research that shows that when kids go hungry their
physical health suffers, their brain development suffers, their mental health suffers, and their
academic performance suffers,” she states. “When you think about the costs that kids will have
to face for an entire lifetime, expanding the child tax credit is one of the highest returns on
investment that I could imagine. There are numerous families and children who are in real need
in the present.”

As soon as the credit ran out it caused a hole in Allina’s budget. It was in January when she
slacked off the payment of her credit card bill as well as her electric bill. Then, in February Allina
found herself a position as a volunteer coordinator at Maine Equal Justice, a non-profit
organization for economic justice that advocates for policies that help the most vulnerable and
low-income people. The position offered good benefits and let her not worry so much about her
finances. It also brought her in contact with other families in the community that is struggling to
cope with the rising costs of housing and rising inflation, without the monthly payment that made
her things a little more manageable. “When these programs end,” she declares, “it’s taking food
out of kids’ mouths.”