Stimulus Update: Bernie Sanders Not Giving Up on Child Tax Credit Extension
- Last year, parents got a world of relief thanks to the enhanced Child Tax Credit.
- Though it's been off the table this year, Bernie Sanders is pushing for an extension.
Could the boosted credit come back?
In March of 2021, the American Rescue Plan was signed into law at a time when unemployment was rampant. Not only did the massive relief bill authorize a third round of stimulus checks, but it also boosted the Child Tax Credit and changed the way it was paid.
The Child Tax Credit's normal maximum value is $2,000 per child. The boosted version raised that to $3,600 for children under the age of 6 and $3,000 for those aged 6 to 17. The enhanced version also included monthly installment payments of the credit that hit recipients' bank accounts from July through December of 2021.
It was that extra money, and those monthly payments, that helped so many people shore up their savings and make ends meet at a time when job loss was still high and living costs were starting to rise due to supply chain backlogs. But this year, as American consumers have grappled with record inflation, there's been no stimulus aid on the table. And the Child Tax Credit has reverted to its former maximum $2,000 value, with monthly installment payments no longer being an option.
But one lawmaker is not giving up on the boosted Child Tax Credit. Vermont Senator Bernie Sanders still has it on his radar, and he's not letting it go without a fight.
Parents need that lifeline
Studies have shown that the boosted Child Tax Credit helped reduce child poverty rates and decrease food insecurity among families with children. But in the absence of that boost, a lot of the progress that was made in 2021 has already been reversed.
Meanwhile, inflation has been soaring this year, forcing consumers to raid their savings and rack up credit card debt just to cover the cost of essentials. And as we head toward the start of a new school year, many parents will no doubt face difficulties as they attempt to stock up on the items their children need without any sort of aid.
Recognizing the hardships so many families are facing, Bernie Sanders recently announced plans to introduce an amendment to expand the Child Tax Credit for the next five years. If successful, the credit would retain the maximum value of $3,600 a year, or $300 a month, that applied in 2021. Sanders intends to pay for the credit by raising the top corporate tax rate from 21% to 28%.
Some states are stepping up
As Americans struggle in the absence of the boosted Child Tax Credit and federal stimulus checks, some states are sending rebate payments to residents -- an option that became available thanks to excess funds in their respective budgets. Most states, however, are not dishing out stimulus aid, which means consumers might continue to struggle until inflation cools down.
In July, the rate of inflation dropped compared to where it stood in June, and that was encouraging. But July's rate was still notably high. And until inflation slows to a more notable degree, consumers could, unfortunately, be in for a continuous struggle.
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