A Call for Basic Fairness for Moms and Babies
Every single day in America, around 10,000 babies are born. Having a baby brings about every single emotion a family can experience – joy, fear, exhilaration, depression, love, exhaustion, excitement, disbelief, amazement, and sometimes, profound sadness. The process of pregnancy and having a baby is an emotional journey often accompanied by giant hills and deep valleys.
As a nation, we often say we value our mothers and babies. It is a precious and vulnerable time. No matter how many people tell you that your life will change forever, you have no sense as to the extent that everything changes. Consequently, for many parents, the birth of a child leaves you with an overwhelming feeling of inadequacy. Moms and dads can feel they have no idea what they are doing, as breastfeeding, child care, child safety seats, strollers, cribs, diapers, finding a pediatrician, understanding developmental milestones, etc. are things that are not inherently or genetically understood.
The costs associated with raising a child are also far greater than you can possibly imagine. According to a Brookings Institution analysis, raising a child costs a family, on average, over $300,000 and that does not even account for college expenses.
Shocking Statistics Reflect a Grim Reality
Tragically, the U.S. infant mortality rate, which was already much higher than in other wealthy nations, increased for the first time in two decades. Furthermore, the number of women who die giving birth, which is already much higher in the U.S. than in other wealthy nations, continues to rise at an alarming rate. These are fundamental measures of a society’s well-being, and we are failing.
It gets worse. Babies and toddlers have the highest rates of poverty of any age group in society.
Source: Robert Orr, “Why Child Tax Credit expansions should prioritize younger children,” Niskanen Center.
Families with young children are at the earliest stages of their careers and have lower earnings. And for a range of reasons, mothers experience a significant drop in income associated with the birth of a child.
Consequently, eviction rates are highest among families with young children. And babies have the highest rate of child abuse and maltreatment among all kids.
While politicians love to be seen holding and kissing babies, their actions (and inactions) often fail to address the needs or well-being of our youngest citizens and their parents.
Policy Failures and Missed Opportunities
Rather than making investments in moms and babies, the House of Representatives proposed last year to eliminate funding for Healthy Start, teen pregnancy prevention programs, family planning, and to slash funding to the Maternal and Child Health (MCH) Block Grant to states. As First Focus Campaign for Children wrote to Congress last year:
In the midst of rising maternal, infant, and child mortality rates in this country, we should be investing in these programs, not eliminating or cutting them.
Unfortunately, Congress systematically shortchanges our babies and toddlers. A 2023 report by First Focus on Children and Zero to Three found that our youngest children up to age 3 receive just 1.5% of all federal spending despite representing 3.4% of the U.S. population.
Source: Source: First Focus on Children and Zero to Three, Babies in the Budget, Aug. 2023.
Sen. James Lankford (R-OK) has said:
Federal benefits available to moms should be available to all moms.
Sen. Lankford added that we should “ensure the federal government treats all moms the same, no matter how small or young her baby is.”
Let’s call this the “Lankford Test” and see how different versions of the Child Tax Credit stack up to this test of simple fairness by comparing:
The current Child Tax Credit as signed into law by President Trump as part of the Tax Cuts and Jobs Act (TCJA) in 2017;
H.R. 7024 by Rep. Jason Smith (R-MO) and Sen. Ron Wyden (D-OR) that passed the House but is currently languishing in the Senate; and,
The 2021 version of the Child Tax Credit by Rep. Rosa DeLauro (D-CT) and Sens. Sherrod Brown (D-OH) and Michael Bennet (D-CO) signed into law by President Biden that is also included in his FY 2025 budget proposal.
To see how these bills would impact different families having babies, below are hypothetical examples of three families with two kids ages 5- and 2-years-of-age having another child in 2023. Beginning with current law:
Scenario #1: How Pregnant Moms and Babies Fare Under Current Law (Trump)
Under current law, passed as part of the Tax Cuts and Jobs Act (TCJA) in 2017, the Child Tax Credit is not fully refundable. Consequently, only middle- and upper-income children qualify for the full credit, as 18-19 million children in the country do not receive for the full credit because their parents make too little to qualify for the full amount. To demonstrate how this would have impacted three different hypothetical families having babies in 2023:
The Anderson family: Living in Charleston, West Virginia, this couple has two children on an income of $50,000 a year. They received $2,000 per child ($4,000 overall) in 2022 and would qualify for an additional $2,000 with the birth of their third child in 2023 for a total of $6,000.
The Barnes family: Living in Boise, Idaho, this couple has two children on an income of $50,000 a year. They received $2,000 per child ($4,000 overall) in 2022, but their income drops to $12,000 in 2023 with the birth of their third child due to doctor’s orders for mom to be “put on bed rest” during pregnancy and the baby’s placement in the neonatal intensive care unit after delivery. Under current law, the federal government would slash their Child Tax Credit to just $1,425.
The Cooper family: Living in Tulsa, Oklahoma, this couple has two children on an income of $50,000 a year. They received $2,000 per child ($4,000 overall) in 2022, but their income dropped to $25,000 as one of the parents left work to care for the kids because the cost of child care for three children is more than the money they make in their job. Under current law, the federal government would slash their Child Tax Credit to $3,375.
In other words, in contrast to the Anderson family, who would receive a 50% increase in their Child Tax Credit for having a baby, the Barnes family would receive 76% less ($1,425 total) than the Andersons ($6,000 total) simply because they had a baby with health care complications. Furthermore, the Cooper family would receive 44% less ($3,375) than the Andersons because they could not find affordable child care.
Tragically, the federal government is effectively punishing the Barnes and Cooper families for losing income due to circumstances related to having a baby, which we call the Child Tax Credit’s “baby and child penalties,” and at the very moment when household expenses are rising.
This clearly violates the “Lankford Test.”
Scenario #2: How Pregnant Moms and Babies Fare Under H.R. 7024 (Smith/Wyden)
Rep. Jason Smith (R-MO) and Sen. Ron Wyden (D-OR) came together on a bipartisan basis to introduce H.R. 7024, the Tax Relief for American Families and Workers Act. The bill, according to Rep. Smith, “removes the penalty for families with multiple children” by adjusting the refundable credit per child. The legislation passed the House of Representatives on January 31, 2024, by a bipartisan vote of 357-70, but is languishing in the Senate due to opposition from some Senate Republicans.
If H.R. 7024 were passed and signed into law, the Anderson family would still receive $6,000, but the Barnes and Cooper families would receive $4,275 and $5,400 (or $2,850 and $2,025 more than they would receive under current law), respectively.
Although this still fails the “Lankford Test” by failing to “treat all moms the same,” it is far better and fairer than the current Child Tax Credit for these families.
Scenario #3: How Pregnant Moms and Babies Would Fare Under the 2021 Law (Biden/DeLauro/Brown/Bennet)
If there is a proposal that meets the “Lankford Test,” it would be the version of the Child Tax Credit that was included in the American Rescue Plan Act (ARPA) and cut child poverty to a record low in 2021, but unfortunately, expired at the end of the year. The 2021 law increased the Child Tax Credit from $2,000 to $3,600 per child under the age of 6 and to $3,000 for all other children. It also made the credit fully refundable.
The following chart from the New York Times shows the difference between current law and what was included in ARPA for different family incomes and ages of children (the purple bars show how the Child Tax Credit was expanded by ARPA in 2021).
As a result, the Child Tax Credit in 2021 successfully cut child poverty by about half because: (1) the value of the credit was much higher; (2) the credit was made fully refundable so 18-19 million children were no longer “left behind”; and, (3) 17-year-olds were included in the Child Tax Credit in 2021.
Unfortunately, when the 2021 version of the Child Tax Credit expired due to opposition from Sen. Joe Manchin (D-WV) and Senate Republicans, the child poverty rate more than doubled from a low of 5.2% in 2021 to 12.4% in 2022.
If the 2021 fully refundable version of the Child Tax Credit were still in effect in 2023, the Anderson, Barnes, and Cooper families would all have received $3,600 per child, or $10,800 in total.
If the goal is to treat all mothers and babies the same (i.e., the “Lankford Test”), the fully refundable Child Tax Credit clearly does the best job, although the bill (H.R. 7024) pending in the U.S. Senate is preferable to current law.
If the goal is to reduce child poverty and improve the life chances and opportunities for children, the fully refundable Child Tax Credit is, once again, the best option. H.R. 7024 would reduce child poverty by an estimated 400,000 compared to current law and the fully refundable Child Tax Credit had nearly 3 million fewer children in poverty than current law.
Conclusion
The evidence is clear: America’s current policies and investments in mothers and babies are woefully inadequate. The tragic rise in infant and maternal mortality rates, coupled with alarming levels of poverty and hardship among our youngest citizens, demands urgent action.
The fully refundable Child Tax Credit, as demonstrated, offers the best pathway to significantly reduce child poverty and ensure a fair start for all children. But if that is not an option this year, H.R. 7024, which is currently pending in the U.S. Senate, would at least reduce the current law’s “baby and child penalties” that “leave behind” 18-19 million children across this country.
It is high time for Congress to prioritize the well-being of our children and our moms by investing in them. Only then can we claim to truly value the lives and well-being of our mothers, babies, and children.
To obtain deeper insights into shaping policy that best supports children through the Child Tax Credit, check out 🎧 Episode #11 of the Speaking of Kids podcast, “Child Poverty in a Policy Decision with Megan Curran and Sophie Collyer.” They explore how improvements to the Child Tax Credit should be made to make significant progress in cutting child poverty in this country.
If you would like to help ensure that children and their needs, concerns, and best interests are no longer ignored by policymakers, please join First Focus Campaign for Children as an “Ambassador for Children” or become a paid subscriber to help us continue our work. We do not have dedicated financial support for this work and rely on readers like yourself to support it. Thank you for your consideration.