Child poverty is at a historic low, according to the Census Bureau Experts say the federal child tax credit was a big reason for the drop. The expanded child tax credit ended in December, just as inflation was starting to climb to historic highs.

Child poverty is at a historic low, according to the Census Bureau

Child poverty is at a historic low, according to the Census Bureau

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Experts say the federal child tax credit was a big reason for the drop. The expanded child tax credit ended in December, just as inflation was starting to climb to historic highs.

A MARTINEZ, HOST:

New data from the Census Bureau indicates that fewer children in the U.S. are living in poverty. But as NPR's Jennifer Ludden reports, that good news might not last.

JENNIFER LUDDEN, BYLINE: Child poverty dropped nearly in half in 2020 to just 5.2%. Census officials say that's thanks to federal pandemic aid, especially the child tax credit. Last year, Congress boosted that and expanded it to millions more lower-income parents and some who were not working. That included Susan Kiralis, a single mom in central Maine. She's a student, and her small business selling Indigenous crafts took a hit during the pandemic. She used the child tax credit to catch up on bills and fix up her car so she could get it insured.

SUSAN KIRALIS: I needed tires (laughter). I needed four new tires. I needed to get a new windshield 'cause my windshield had a big line in it. And I needed to get one headlight.

LUDDEN: Research shows most low-income parents used the tax credit for basic needs like housing and food and to pay fees for school and sports. Sharon Parrott with the Center for Budget and Policy Priorities (ph) says that kind of support has long-term benefits for children.

SHARON PARROTT: They do better in school. Their health is better. And they are better equipped as adults to get jobs and support their families.

LUDDEN: But those monthly payments ended last year, and Parrott says unless that changes, the poverty rate will go back up sharply.

PARROTT: You know, it really shows that the high rates of child poverty that this nation has had for decades is a policy choice. It is not an inevitability.

LUDDEN: The Biden administration and many Democrats want to make the expanded child tax credit permanent, but a proposal stalled in the Senate. Several Republican senators have proposed more limited ways to expand it.

ANGELA RACHIDI: What we don't know is the trade-offs.

LUDDEN: Angela Rachidi is a senior fellow at the American Enterprise Institute and says it's an open question how much pandemic aid and the spending from it played into the dramatic rise in inflation.

RACHIDI: There's many economists who believe that some of that transfer income contributed to the inflation problems we're seeing now. So there's inflation, and then there's other longer-term outcomes that we need to be aware of.

LUDDEN: She says evidence suggests a permanent expanded child tax credit might lead some people to leave the workforce and reduce employment, another key factor in the nation's poverty rate.

Jennifer Ludden, NPR News, Washington.

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