The House Ways and Means Subcommittee on Work and Welfare, held a hearing on October 24, 2023, to examine how the United States government measures poverty. The hearing titled, “How the Biden Administration Plans to Redraw the Poverty Line and Rob Resources from Rural America,” addressed suggestions provided to the government from the National Academy of Sciences to change the measure of poverty and the Child Tax Credit.
Chairman Darin LaHood [R-IL] provided the opening remarks on the policy and budgetary implications that may arise if there is a change in the nation’s official poverty measure and the potential for overreach by the executive branch if the Biden Administration were to implement these changes. In Ranking Member Danny Davis’s [D-IL] opening statement, he focused on the effects of child poverty and the positive effects of the Child Tax Credit. He highlighted how child poverty leads to gaps in cognitive learning, increases risk in hunger and homelessness, and a likelihood of lower lifetime earnings for children living in poverty. There is a link between child poverty and federal investments, with child poverty dropping by almost half between 2020 to 2021 when there were expanded and fully refundable child tax credits.
The following witnesses provided testimony, Kevin Corinth, a Senior Fellow and Deputy Director of the Center on Opportunity and Social Mobility for the American Enterprise Institute, Douglas Besharov, a Professor at the University of Maryland School of Public Policy, Bruce D. Meyer, McCormick Foundation Professor of Public Policy at the University of Chicago, David Hansen, the Director of Educational Opportunities and Investments with Perry County Ohio Job and Family Services, and Elaine Maag, a Senior Fellow with the Urban-Brookings Tax Policy Center.
Ms. Maag testified the cost of child poverty in the United States being estimated between $500 billion and $1.03 trillion. She emphasized how the child tax credit, as is, prevents 19 million people from receiving full credit, particularly people in rural America that with an expansion will benefit nearly 90% of families in the United States. Additionally, with an enhanced child tax credit, poverty among children of color will decline dramatically, people have increased access to safe childcare, improved transportation, improved access to SNAP programs, and overall better outcomes for children.
Concerns among members were raised about the effects of an increase in monetary aid with the removal of work requirements for the Child Tax Credit. Ms. Maag testified that the majority of studies indicate a tax credit does not incentivize not working, but rather indicates the opposite, and families use the credit to meet their basic needs.
By Harper Dilley, Policy Intern
