The Child Tax Credit Changes in H.R. 1 Fail Children and Families
The Child Tax Credit will be less generous per child than it was more than two decades ago and continues to shortchange the millions of children and families who need it the most.
Congress passed and President Trump signed into law H.R. 1, the sprawling, enormous budget package that proponents are touting as a benefit to American families. Yet for numerous reasons, children are repeatedly failed and betrayed by this enormous package.
Supporters are pointed to an increase in the Child Tax Credit from $2,000 to $2,200 as a “step forward.” At first glance, that may seem helpful, but compared to what?
As conservative scholar Ramesh Ponnuru explains, the Child Tax Credit in H.R. 1 provides a more limited credit to children and families than:
Past levels of the Child Tax Credit, including the amount in 2004, 2017, and 2021.
Politicians often offer promising talk but limited to no action in addressing the needs of children, despite overwhelming support from the American people on children’s issues such as the Child Tax Credit. This includes:
Campaign promises made to families during the 2024 presidential campaign.
The policy proposed on a bipartisan basis by members of the Bipartisan Commission on Children back in 1991.
Let’s examine how H.R. 1 stacks up to these comparisons.
H.R. 1’s Child Tax Credit: Shortchanging Children and Families Compared to the Past
First, despite proponents of H.R. 1 touting the increase of the Child Tax Credit from $2,000 to $2,200 in the bill (which was signed into law by President Trump on July 4, 2025), the uncomfortable truth is that children and families will be receiving less of a benefit from H.R. 1 on an inflation-adjusted basis than they did in the past.
Ponnuru foretold this result in an article he wrote for the Washington Post this past April, before H.R. 1 was passed. He wrote:
Tax benefits for parents have been shrinking for most of the 2000s. They are smaller than they were seven years ago, during Donald Trump’s first term. They’re smaller, too, than they were 20 years ago, during George W. Bush’s presidency.
Ponnuru explains that in 2004, during the Bush Administration, the combined value of the dependent exemption and the Child Tax Credit “meant that each child reduced a middle-income family’s tax liability by $2,510…in current dollars.”
He then examined the impact of the Tax Cuts and Jobs Act (TCJA) that was signed into law by President Trump in 2017. Under that bill, the Child Tax Credit was doubled to $2,000, but the dependent exemption – part of tax law since the 1940s – was eliminated. Ponnuru estimates that the value of the benefit in the 2017 law at “$2,560 in today’s dollars.”
Furthermore, in 2021, President Biden signed into law an expansion of the Child Tax Credit to $3,600 for kids age 0-to-6 and to $3,000 for all other children up to age 18.
All of these prior policies were more generous than the $2,200 Child Tax Credit in H.R. 1.
If Congress and President Trump truly want to support families, one might expect the benefit to grow in value rather than shrink. Instead, as Ponnuru points out:
Even the inflation-adjusted numbers arguably understate how much the economic value of child benefits has declined. Under the Truman-era dependent exemption, the tax benefit for each child amounted to 4% of the median household’s income. It’s now down to 2.4%.
Before passage of H.R. 1, Ponnuru wrote:
Parents, and especially parents of large families, are paying a larger share of the federal tax burden than they were two decades ago. As Republicans try to rewrite the tax code this year, the question to ask is not whether they have become a working-class party willing to go further than ever before to help families. It’s whether they’re going to be stingier with families than their Bush-era predecessors were.
We now know the answer. For children and families, the tax code has become “much stingier.”
What Politicians Talked About in the 2024 Presidential Campaign
When it came to the presidential campaign, there was hope that children and families would receive a major increase in the Child Tax Credit, regardless of who won.
However, the $2,200 included in H.R. 1 falls far short of the $5,000 per child that Vice President J.D. Vance promoted during the presidential campaign, or the $5,000 baby bonus that President Donald Trump floated earlier this year.
In contrast, Democratic candidate Kamala Harris proposed making the Child Tax Credit a Day 1 priority with $6,000 for a newborn, $3,600 for kids up to age 6, and $3,000 for all other children in her campaign.
Both campaigns sought to make the case to voters that they were more “family friendly” and competing Child Tax Credit proposals was a centerpiece of that debate.
However, H.R. 1 falls nowhere close to what the two presidential campaigns were discussing during the 2024 presidential campaign. In the case of Vice President Vance’s proposed $5,000 credit, H.R. 1 cuts that amount by 56%.
Politicians know that the American public believe we should be investing more, and not less, in children on every single policy issue of importance to children.
This is overwhelmingly the case for expanding the Child Tax Credit.
Yet, in a system driving by extreme levels of political money and influence, children are often left behind.
Social construction theory explains why politicians are less like to deliver tangible benefit to groups like children and low-income families. For one, lawmakers do not perceive political power or positive “feedback” to themselves (e.g., votes, campaign contributions, etc.) from certain groups. Consequently, although children are perceived as one of the most “deserving” groups in society, they lack the political power necessary to receive the support they need.[1]
For child advocates, H.R. 1 proves to be yet another chapter of a long history in which politicians, such as President Trump and Vice President Vance, know the public supports increased investments in children and so feign support, but repeatedly fail to deliver.
Landmark Bipartisan Commissions Repeatedly Call for a Full Refundable Child Tax Credit
Even more important than how much the Child Tax Credit provides is who it reaches. Unfortunately, the current structure of the credit shortchanges 17 million children whose parents earn “too little” to qualify for the full benefit.
This policy does not just ignore child poverty – it promotes it.
As the 2019 National Academy of Sciences, Engineering, and Medicine (NASEM) report on how to cut child poverty found, by simply making the Child Tax Credit fully refundable, the U.S. could cut child poverty by nearly half.
In 2021, Congress did just that by passing the American Rescue Plan Act (ARPA). That legislation expanded and made the Child Tax Credit fully refundable on a temporary one-year basis. However, that change, in conjunction with other policies, cut child poverty by more than half to a record low 5.2%.
Unfortunately, the improved Child Tax Credit expired at the close of 2021, and child poverty more than doubled to 13.7% or 10 million children in 2023.
A fully refundable Child Tax Credit, such as that proposed by the American Family Act (S. 1393/H.R. 2763) by Sen. Michael Bennet (D-CO) and Rep. Rosa DeLauro (D-CT), expands upon the 2021 Child Tax Credit and reflects a set of values that we should help all children in need rather than punish those in low-income families.
The American Family Act reflects bipartisan recommendations made 34 years ago by the National Commission on Children. In a report issued to President George Bush in 1991, the National Commission on Children noted:
The United States is the only Western industrialized nation that does not have a child allowance policy or some other universal, public benefit for families raising children…. Other nations that have adopted child allowance policies regard such subsidies as an investment in their children’s health and development and in their nation’s future strength and productivity.
To improve the lives, well-being, and future of children, the National Commission on Children’s report, Beyond Rhetoric: A New American Agenda for Children and Families, recommended that the Child Tax Credit go to all families with children and not be withheld in whole or in part from its poorest children and families.
The Commission proposed:
Because it would assist all families with children, the refundable child tax credit would not be a relief payment, nor would it categorize children according to their “welfare” or “nonwelfare” status. In addition, because it would not be lost when parents enter the work force, as welfare benefits are, the refundable child tax credit could provide a bridge for families striving to enter the economic mainstream. It would substantially benefit hard-pressed single and married parents raising children. It could also help middle-income, employed parents struggling to afford high-quality child care. Moreover, because it is neutral toward family structure and mothers’ employment, it would not discourage the formation of two-parent families or of single-earner families in which one parent chooses to stay at home and care for the children.
A fully refundable Child Tax Credit — as recommended by the National Commission on Children in 1991 and reaffirmed by the National Academy of Sciences in 2019 — was finally enacted, for one year, in the American Rescue Plan Act of 2021.
For that single year, the harmful exclusions that normally penalize babies and children were lifted. Children were no longer punished simply because their families faced hardship, including:
Having a mother who loses income during pregnancy, childbirth, and postpartum, so no longer qualifies for the full credit for their baby and the baby’s siblings.
Living through a natural disaster with an accompanying loss of household income
Experiencing the death of a parent.
Suffering as a victim of violence or abuse and a related loss of household income.
Dealing with a parent who suffers from an illness, such as cancer, or has a disability that reduces household income.
Having a parent serve as a caregiver for a child, their other parent, or other family member.
Living with a parent who loses a job and income, even on a temporary basis.
H.R. 1 Expands “Baby and Child Penalties”
Unfortunately, H.R. 1 expands these “baby and child penalties” by adding a new provision that denies the Child Tax Credit to an estimated 2.6 million U.S. citizen children simply because their parents are not citizens. These are children who will be shortchanged – many of whom will be pushed into poverty by that decision – and yet will be asked to pay for the Social Security and Medicare benefits for many of the lawmakers and voters who denied them access to the Child Tax Credit throughout their childhood.
Moreover, by failing to eliminate or take steps to mitigate the harm of “baby and child penalties” for low-income children and families, Columbia University’s Center on Poverty and Social Policy (CPSP) finds that a married couple with a single child would have to earn an additional $3,500 — from $33,000 under current law to $36,500 due to passage of H.R. 1 — and that a married couple with four children would have to earn an additional $6,000 — from $45,500 to $51,500 — to qualify for the full credit.
The consequences, according to Columbia CPSP, is that:
…the share of children ineligible for the full federal Child Tax Credit because their family incomes are too low to qualify fully increases under the Senate-passed amendment to H.R.1 from 25% to 28%, or from roughly 17 million to more than 19 million children left behind.
Again, child poverty is a policy choice.
Columbia CPSP finds that these children “left behind” are disproportionately kids in single-parent households, rural children, kids in larger families, children of color, and young children.
Through this policy, the proponents of H.R. 1 in the House and Senate are telling children that their basic worth or “deservingness” depends entirely on her parent’s earnings or circumstances. That’s the moral scandal baked into our tax code.
What Kind of Nation Are We?
Children can’t vote. They can’t hire lobbyists or bankroll campaigns. That’s why it falls to us – parents, neighbors, advocates, and citizens – to make sure lawmakers hear what kids cannot say for themselves.
H.R. 1 was a chance to rebuild the foundation of support for families with children and fix the glaring holes that leave millions of children behind. It could have, at the very least, restored the level of commitment we showed families twenty years ago.
Instead, Congress chose to offer families a little less help than they used to get, all while continuing to provide those children most in need with the least.
We must demand better, such as:
A fully refundable Child Tax Credit that doesn’t leave out the most vulnerable.
A tax code that recognizes children as the greatest investment we can make for their NOW and both their and our collective FUTURE.
At the end of the day, a nation’s priorities are revealed by how it treats its children. And right now, we’re falling far short.
A fully refundable and more robust Child Tax Credit, as the American Family Act by Sen. Bennet (S. 1393) with 44 cosponsors and Rep. DeLauro (H.R. 2763) with 210 cosponsors, would reflect a fundamental moral value that every child – regardless of income, circumstance, or zip code – deserves the opportunity to thrive.
ENDNOTE
[1] Ingram, H., Schneider, A., & DeLeon, P. (2007). Social Construction and Policy Design. In P. A. Sabatier, Theories of Policy Process. Boulder, CO: Westview Press; Schneider, A. L., & Ingram, H. M. (2019, May). Social Constructions, Anticipatory Feedback Strategies, and Deceptive Public Policy. Policy Studies Journal, 47(2), pp. 206-236; Kreitzer, R. J., & Smith, C. W. (2018). Reproducible and Replicable: An Empirical Assessment of the Social Construction of Politically Relevant Target Groups. PS: Political Science & Politics, 51(4), 768-774; Kreitzer, R. J., Maltby, E. A., & Smith, C. W. (2022). Fifty shades of deservingness: an analysis of state-level variation and effect of social constructions on policy outcomes. Journal of Public Policy, 42, 436-464.
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