A permanently expanded Child Tax Credit benefits communities and contributes to economic growth. Benefits outweigh costs by 10-to-1.[1]
The bipartisan temporary expansion of the Child Tax Credit lifted more than 500,000 children out of poverty and nearly 16 million children were made less poor.[2],[3]
Unfortunately, the Child Tax Credit expansion is set to expire in 2025. But, Republicans in the Senate recently blocked legislation that would have permanently expanded the Child Tax Credit.[4]
Progress in making children’s lives better will be wiped out.
Among other arguments against permanent expansion, Republicans claims that people will quit working or refuse to seek employment are without merit.
Most studies have shown that there is no or very limited impact on labor supply in the long run from a permanent child allowance.[5],[6],[7]
A permanent expansion of the Child Tax Credit is expected to “facilitate steady employment” since families will be able to break the cycle of living paycheck to paycheck and be better prepared to address emergencies.[8] But Republicans don’t care.
The long-term benefits of a permanent expansion are multifold - increased future earnings and tax payments, improved health and longevity, and reduced food insecurity, health care, crime, and child protection costs. But Republicans don’t care.
Families benefit from a permanent expansion, rather than temporary changes that are subject to the whims of Congressional and Senate Republicans.
We won’t go back.
[1] Elizabeth Ananat and Irwin Garfinkle. The Potential Long-Run Implications of a Permantly-Expanded Child Tax Credit. Working Paper 32870. National Bureau of Economic Research, 2024. (pp.2 and 12)
[2] Center on Budget and Policy Priorities
[3] https://www.brookings.edu/articles/the-antipoverty-effects-of-the-expanded-child-tax-credit-across-states-where-were-the-historic-reductions-felt/
[5] Baker, Michael, Derek Messacar, and Mark Stabile. “Effects of Child Tax Benefits on Poverty and Labor Supply: Evidence from the Canada Child Benefit and Universal Childcare Benefit.” Journal of Labor Economics, 2022.
“We find no evidence, on either the extensive or the intensive margin, of a negative labor supply response to either of the program reforms.”
[6] Ananat, Elizabeth, Benjamin Glasner, Christal Hamilton, and Zachary Parolin. Effects of the Expanded Child Tax Credit on Employment Outcomes: Evidence from Real-World Data from April to December 2021. Working Paper 29823. National Bureau of Economic Research, 2022. (pp. 2, 20-21)
“Thus, our analyses of real-world data suggest that the expanded CTC did not have negative short-term employment effects that offset its documented reductions in poverty and hardship.”
[7] Brandon Enriquez, Damon Jones, and Ernie Tedeschi. The Short-Term Labor Supply Response to the Expanded Child Tax Credit. American Economic Association Papers and Proceedings, Vol. 113: 401-405 (May 2023).
“We do not find strong evidence of a change in labor supply for families receiving the credit.”
[8] Ananat (2024)

, op. cit., p.6.
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