Millions of Children Left Behind: The Truth About the Latest Child Tax Credit
Don’t Be Fooled: The One Big Beautiful Bill Fails Our Children
In 2021, America showed what was possible when we chose children first. Building off the National Academy of Sciences, Engineering, and Medicine (NASEM) report, A Roadmap to Reducing Child Poverty, the American Rescue Plan Act (ARPA) included an expanded Child Tax Credit: increasing the credit from $2,000 to $3,600 for children up to age 6, to $3,000 for kids up to age 18, and for the first time, full refundability to all low-income children and families on a monthly basis.
For children and families, ARPA was the most significant package of investments in children since 1997, when the Child Tax Credit and Children’s Health Insurance Program (CHIP) were passed into law. For children and families, the provisions in ARPA cut child poverty by more than half. For a brief but historic moment, the child poverty rate fell to 5.2% — the lowest ever recorded.
Millions of parents could finally exhale, knowing they could pay the rent, fill the fridge, or cover the cost of diapers and school supplies. Children slept easier, healthier, and more securely.
But that progress was temporary. In 2022, Sen. Joe Manchin (D-WV) and Senate Republicans rejected legislation that had passed the House to extend the improved Child Tax Credit. After Congress let the expansion expire, child poverty more than doubled, and in 2024, the child poverty rate stood at 13.4%.
Source: Butkus, N. (2025, Sep. 16). Child Poverty Remains Unacceptably High, New Federal Changes Unlikely to Move Needle. Institute on Taxation and Economic Policy (ITEP).
Consequently, nearly six million more children (rising from 3.8 million in 2021 to 9.7 million in 2024) were pushed back below the poverty line in just three years – a shocking reversal of fortune that reveals how fragile children’s well-being is when their needs are treated as optional.
In the presidential election, Democratic candidate Kamala Harris promised to make an expansion of the Child Tax Credit a “day one priority.” She proposed increasing the Child Tax Credit to $6,000 for newborns, $3,600 for children up to age 6, and $3,000 for those up to age 18, and making the credit fully refundable and available on a monthly basis (as it was in 2021). Republican Vice Presidential Candidate JD Vance said he would support a $5,000 Child Tax Credit.
As 2025 opened, there was some hope and promise that the Child Tax Credit would be significantly increased as part of the tax bill being considered. Sen. Josh Hawley (R-MO) said it would be a major priority for him, and many Republicans spoke favorably about making a positive improvement to the Child Tax Credit.
Meanwhile, congressional Democrats also introduced a rather significant expansion of the Child Tax Credit, the American Family Act (AFA), which was introduced by Rep. Rosa DeLauro (D-CT) and Sen. Michael Bennet (D-CO) and would:
Increase the value of the CTC from $2,000 per child to $6,360 for newborns, $4,320 for children ages one through six, and $3,600 for children age six through 17;
Extend the Child Tax Credit to all children, including making the credit refundable to low-income children and families;
Provide for monthly delivery of the credit so families have access to the credit as bills arrive; and
Index the CTC for inflation to preserve the value of the credit moving forward.
Proponents of H.R. 1, the One Big, Beautiful Bill (OBBB), have promoted the bill’s Child Tax Credit as a step forward for children and families, as it increases the credit from $2,000 to $2,200 and indexes it for inflation in the future.
In his blog, Andrew Yang applauded OBBB’s Child Tax Credit. Yang, who created Humanity Forward to help work on policy change for families and deserves credit for championing Universal Basic Income (UBI) in his 2020 presidential campaign, argued that “millions of families are going to benefit from a reinforced and permanent higher child tax credit starting in 2026. That’s a real win.”
With all due respect, OBBB failed children.
Yang added, “I’ll be honest, this is perhaps the biggest highlight of my career.”
On that point, I can say with 100% certainty that it is not even close to a highlight of his career. OBBB explicitly fails the concept of Yang’s UBI. Low-income children do not receive a penny of the added $200 in the bill.
Worse still, OBBB prioritizes children last and leaves most of them worse off.
Policy Design: OBBB Fails Millions of Children
At first glance, OBBB’s Child Tax Credit might seem like it provides progress. It advertises a larger Child Tax Credit: $2,200 per child instead of $2,000. But dig deeper, and the design shows how hollow this promise is. A slight increase in the maximum benefit does not necessarily mean children are truly better off.
First, $2,200 does not even close half of inflation since 2017 and is a far cry from the $5,000 that Vice President Vance spoke about during the campaign. Conservative scholar Ramesh Ponnuru also compared OBBB’s Child Tax Credit to the combined value of the dependent exemption and the Child Tax Credit back in 2005 and found it provides less benefit to a family on an inflation-adjusted basis.
Children and their families are being shortchanged.
OBBB’s Child Tax Credit also keeps the same “phase-in” rules that require families to earn a certain amount before they can receive the full benefit. This means the lowest-income children, who need the benefit the most, receive the least. In contrast, wealthier families continue to receive the maximum credit per child and are the only families who receive the increase.
According to an analysis by Columbia University’s Center on Poverty and Social Policy (CPSP), it is estimated that 19 million children, or 28% of all children under the age of 17, receive either partial or no credit under the OBBB.
In contrast, the American Family Act (AFA) provides the full benefit to all eligible children, regardless of their parents’ income. This is what full refundability means: no child is left out because their family earns too little.
The differences become even sharper when you compare other design features side by side:
So which version is in the best interests of children? It isn’t even close. AFA puts every child first. OBBB locks millions out.
Take just one example: babies.
OBBB punishes moms and babies with a reduction or even elimination of the Child Tax Credit if the mother’s earnings drop household income below the threshold needed to qualify for the full credit. Even worse, the baby’s older siblings could lose their credit(s) as well.
According to research by Alexandra Stanczyk:
On average, households experience significant declines in income-to-needs that begin three months before the birth month, reach the lowest level – around 34 percent lower than the pre-pregnancy baseline – in the first and second months of the infant’s life, and do not recover to pre-pregnancy levels in the year following the birth.
OBBB imposes a “double whammy” on these moms and babies by slashing the Child Tax Credit to those whose income drops below the threshold to qualify for the full credit. That is terrible public policy.
Those who need it the most get the least.
Sen. James Lankford (R-OK) has argued:
Federal benefits available to moms should be available to all moms.
OBBB fails the “Lankford Test.”
Recognizing the absurdity of punishing moms, babies, and their siblings for childbirth, AFA makes the credit fully refundable, provides a $2,400 added newborn payment to every child, and then makes monthly payments after birth. These AFA provisions provide significant support rather than a penalty to babies and families.
Beyond babies, OBBB’s Child Tax Credit also fails a whole range of other children. If you are a child or family who is a victim of a natural disaster, a child whose parent is a caregiver, a child who has a parent who has lost a job, a child surviving domestic violence, or a child who has had a parent die, you are more likely to lose part or all of your Child Tax Credit.
How much of a difference does this make?
In an analysis by Columbia University’s Center on Poverty and Social Policy (CPSP) that compared how children would fare under: 1) no Child Tax Credit; 2) an extension of the Tax Cuts and Jobs Act (TCJA) of 2017; 3) the Democrats’ AFA: and, 4) OBBB that was passed by Congress and signed into law by President Trump on July 4, 2025, the authors found:
The numbers paint a disturbing picture.
Despite Yang’s assertion of “Fewer Poor Kids” in the title of his recent blog, OBBB does absolutely nothing to reduce child poverty in comparison to TCJA. Despite OBBB’s hype, the impact of its Child Tax Credit would leave the child poverty rate exactly where it is today: at 13.3% or close to 10 million children.
In sharp contrast, the AFA would cut child poverty by nearly half, reducing the rate to 8.8% and lifting 3.3 million children out of poverty in comparison to TCJA. This isn’t a marginal policy tweak. It’s transformational. And remember: these numbers don’t just represent a shift in charts and graphs. They represent children’s lives.
Under OBBB, millions of children remain trapped in the cycle of poverty: going to school hungry, lacking stable housing, and living with the toxic stress of economic insecurity. Under the AFA, millions of those same children would instead have enough to eat, a roof overhead, and a fair chance to grow and thrive.
You could fill the NBA Champion Oklahoma City Thunder’s Paycom Center to capacity more than 181 times with the children that would be lifted out of poverty by this policy difference.
The stakes could not be clearer.
Beyond Averages: Which Children Benefit?
Some defenders of OBBB argue that while it may not reduce poverty overall, at least it helps families “a little.” But Columbia CPSP’s analysis makes clear that the benefits of American Family Act are broad and transformative, while OBBB leaves disparities untouched.
Here is what happens under the AFA and OBBB in comparison to TCJA:
The comparisons and choices could not be clearer: one policy (AFA) delivers the credit to all children and significantly reduces child poverty, while the other (OBBB) locks in and exacerbates inequity and poverty.
The American people get it. In an April 2025 poll by Lake Research Partners, voters expressed overwhelming support for an expanded and fully refundable Child Tax Credit (83-11% margin).
OBBB’s Exclusions and Collateral Damage
The story doesn’t end with OBBB’s failure to reduce poverty. In other important ways, OBBB actively makes life harder for children.
1. Cuts to health care and food.
OBBBA is not a standalone measure. It is tied to over $1 trillion in cuts to Medicaid, the Children’s Health Insurance Program (CHIP), SNAP, and school meals. These programs are lifelines for children. Medicaid and CHIP keep kids healthy. SNAP keeps them fed. School meals ensure children can learn on a full stomach. With millions of children losing these benefits, OBBB will push more children into poverty.
2. Excludes 17-year-olds and children in mixed-status families entirely.
OBBB adds additional barriers for children: first, parents must have a Social Security Number (SSN) to claim the Child Tax Credit. That may sound technical, but its effect is devastating. Up to 2.7 million U.S. citizen children lose access to the credit simply because of their parents’ immigration status. Children, who will play a critically important role in the future of this country, should never be punished for the immigration status of their parents. Sadly, OBBB writes that exclusion into law. Second, more than 4 million 17-year-olds are completely excluded from the Child Tax Credit.
3. A net loss for families.
The supposed $200 increase in the CTC ($2,200 vs. $2,000) is not only meaningless in real terms – it is erased many times over by these other cuts. A family that gains $200 in credit but loses Medicaid coverage for a child is far worse off. A family that gains $200 but loses hundreds of dollars in SNAP benefits is far worse off. Washington should not pretend that squeezing one hand while offering crumbs with the other is progress.
If the Trump Administration and congressional Republicans wanted to mitigate some of the Child Tax Credit’s problems but didn’t want to make it fully refundable, they had readily available options that they chose to reject.
For example, just last year, House Ways and Means Chairman Jason Smith (R-MO) worked with Senate Finance Committee Chairman Ron Wyden (D-OR) on a bipartisan bill, the Tax Relief for American Families and Workers Act (H.R. 7024 in the 118th Congress).
The bill, according to Rep. Smith, “removes the penalty for families with multiple children” by adjusting the refundable credit on a “per child” rather than a “per family” basis. It also included an income look-back provision, allowing families to use prior-year income to calculate the credit if their income dropped. This would help moms having a baby or children and families who are victims of a natural disaster.
To the detriment of millions of children, OBBB dropped these provisions.
As my colleague Chad Bolt writes:
It’s not as if Republicans lacked the legislative imagination to address this; they know how to get Child Tax Credit payments to the most significant number of kids. In fact, bipartisan legislation doing just that passed the Republican-controlled House of Representatives in 2024 with more Democratic than Republican votes. Notably, JD Vance, then the junior senator from Ohio who was promising a $5,000 per child Child Tax Credit if he became vice president, skipped the vote.
Bolt adds:
This time, Republicans opted to deny the full credit to lower-income children. Instead, they boasted about raising the amount. However, they omitted the fact that the $200 increase is easily offset by inflation. Supporters note that the legislation allows the credit to rise with inflation for the first time, and, on paper, that’s an improvement. However, Republicans intentionally chose to measure inflation using “chained CPI,” which assumes families switch to cheaper goods when prices rise. Chained CPI grows more slowly than actual household costs, so the credit will always lag behind the actual cost of raising children.
Cutting Child Poverty Improves Just About Every Aspect of the Lives of Kids
Too often, debates about tax policy get stuck in spreadsheets and scorecards. But for children, this isn’t abstract. The evidence is overwhelming: more income for families improves every aspect of children’s lives.
Money matters (see sources at the end of this blog).
Food security. When the expanded Child Tax Credit was in place in 2021, rates of food insufficiency among families with children dropped by nearly 20%. Parents used the monthly payments to put meals on the table, and children went to bed nourished instead of hungry. When the expansion expired, food insecurity surged right back up.
Health. Research shows that when families have more income, rates of low birth weight decline, infant mortality falls, and children’s long-term health outcomes improve. Poverty is toxic to the body as well as the mind; the CTC expansion was a powerful antidote.
Education. Even modest increases in family income improve educational outcomes, graduation rates, and eventual adult earnings. Money in the household translates into books, internet access, tutoring, and time to focus on school rather than constant instability.
Stability. Perhaps most importantly, the monthly structure of the 2021 expansion gave families the stability they need. Parents budget month to month, not year to year. The lump-sum structure in OBBB does little to prevent eviction in August or cover utility bills in December. AFA restores monthly payments, making the credit function as a genuine family support.
In short, money matters because childhood matters. Every dollar of stable income isn’t just cash: it’s health care, food, stability, and opportunity. For a child, it can mean the difference between attending school ready to learn or too hungry to focus.
Trump’s ‘One Big, Beautiful Bill’ (OBBB) Is Failing Children
Whenever bold policies to reduce child poverty are proposed, familiar criticisms related to “deservingness” emerge. But the facts speak clearly.
OBBB doesn’t reduce child poverty – instead, paired with deep cuts to Medicaid, CHIP, SNAP, and school meals, it will push more children into poverty.
Despite claims that OBBB “helps a little,” Columbia’s analysis shows the bill’s Child Tax Credit does nothing to reduce child poverty. Furthermore, OBBB’s more than $1 trillion in cuts to Medicaid, CHIP, SNAP, and school meals will push more children into poverty.
Parents spend the credit on essentials.
Research from the 2021 Child Tax Credit expansion shows families overwhelmingly used it for food, rent, clothing, utilities, and child care. The stereotype that parents can’t be trusted with cash collapses under real evidence.
The AFA is affordable and essential.
As NASEM reported in 2019, child poverty costs the U.S. up to $1.1 trillion every year in worse health, lost productivity, and higher crime. Cutting child poverty nearly in half is not just a moral choice but an economic one. Every dollar invested today prevents far greater costs tomorrow. Unfortunately, since 2021, our federal lawmakers have chosen to increase the rate of child poverty from 5.2% in 2021 to 13.3% in 2024 – a disturbing and tragic 156% increase.
And behind those numbers lies a deeper truth: if our nation can afford tax breaks for corporations and the wealthy, it can certainly afford to ensure children have food, health care, and stability. Instead, the bill shifts costs from the poor to the wealthy, from the young to the old, and from the future to the past.
When disasters hit or a baby is born, children and families need more support, not less. The AFA delivers and supports children. Sadly, OBBB denies and fails children.
At its heart, this debate is not about tax brackets or budget baselines. It is about children. It is about what kind of nation we want to be.
Fairness. Every child deserves the full credit, whether their parents earn little or a lot. We should not give those with the greatest need the least.
Deservingness. Some policymakers cling to the cruel fiction that the poorest children are “undeserving” of support. OBBB locks that prejudice into policy, phasing in benefits only if parents earn enough. But no child is undeserving of food, health care, or stability. We must oppose policies that punish millions of children in this manner and demand better from our lawmakers.
Urgency. Childhood cannot wait. Every month matters. Every year matters. When child poverty fell to 5.2% in 2021, millions of kids had a chance at healthier, more stable lives. Today, the rate has more than doubled back to 13.3%. Each month of delay means more children going without, more futures stunted.
Policy is a mirror of our values. And OBBB tells children they come last.
The Choices Politicians Make (or Fail to Make)
Columbia CPSP makes it clear:
OBBB leaves poverty stuck at 13.3%.
AFA cuts child poverty nearly in half, to 8.8%.
That is not a marginal difference: it is the difference between hunger and a full meal, between instability and security, between despair and possibility.
The truth is simple: OBBBA does not, with all due respect to Yang, result in “fewer poor kids.” It does the opposite.
The Child Tax Credit leaves children and families worse off in real terms than they were in 2017 (and even 2005, as Ponnuru demonstrates). It excludes millions of citizen children in mixed-status families. And OBBB imposes cuts to Medicaid, CHIP, SNAP, and school meals that will harm millions of children even further.
Yet some public voices, such as Andrew Yang and Humanity Forward, have portrayed OBBBA as a “permanent win” and even a doubling of the credit. That narrative misleads. The credit was already $2,000 in 2017; $2,200 is not a doubling, it is less than inflation. Columbia’s analysis shows no reduction in poverty. Exclusions and program cuts mean children will actually lose more than they gain.
The reality is plain: what is being celebrated as a win is, in fact, a major step backward for children. Even worse than being inaccurate, calling it a “win” implies Congress can check the box and move on, which will permanently:
Leave 19 million children behind because their parents make “too little”
Leave another 2.7 million U.S. citizen children without a Child Tax Credit because their parents are immigrants
Place millions of additional children in harm’s way due to the more than $1 trillion in cuts to Medicaid, CHIP, SNAP, and school meals
The bill increases child poverty, threatens child health and nutrition, and more. These are tragic consequences that demand change – not celebration.
Kids cannot wait. We must demand better for them from our policymakers.
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Sources
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