American Rescue Plan Not Only Impacts Family Finances, it Impacts Developing Brains

This is big news for the United States. With the passage of the American Rescue Plan on March 11, 2021, for the first time ever this country is moving toward a policy shift with tangible financial benefits for families with children. And policies that decrease child poverty, which this plan aims to do, are policies that increase children’s health, both emotional and cognitive. It’s a game changer – just ask any social worker or school principal.


I know child poverty is a nasty little subject, but one that I have seen in abundance over the years. I’ve spent a lot of time working in schools where low-income students on the reduced or free-lunch program far outnumber the kids whose parents can afford ballet and gymnastics lessons. And believe me, going without socks has never been a trend among 2nd graders. Why is this important? Because coming to school hungry and living with financially stressed parents decreases a child’s ability to learn by a lot.


The sad part is, kids have absolutely no blame in this. A second grader I had in a class – I’ll call him Marty – left for the afternoon bus without his “backpack program” supply of food for the weekend. The program provides easy-to-prepare foods for children who are most at-risk of food insecurity. When another little boy in the class saw the full sack sitting on a table, he became alarmed. “Marty forgot his food!” he said. “He needs it! He immediately asked permission to run the sack out to the bus before it left. I could barely restrain my tears. He’d made it just in time. The boy’s empathy for his friend taught me the degree to which even young children are aware of human need. My question is, why are so many adults reluctant to do anything about it?


One of the ARP’s benefits is the expansion of the child tax credit. (It’s not a tax deduction, which would only be a percentage of family income.) It’s a credit available even to low-wage earners that “will increase the amount from $2,000 to $3,600 for children under age 6 and to $3,000 for children ages 6 to 17. Kids that were 17 at the end of the 2020 tax year also now qualify (they were previously excluded).”


Who qualifies for the new child tax credit expansion? According to Forbes, “You may qualify for the new child tax credit expansion if your modified adjusted gross income (MAGI) is $75,000 or lower for single filers (up to $150,000 for married couples). If you earn more than these amounts, you will see a reduced credit, or you may not get a credit at all.”


In addition, “For the first time in history, families will qualify to receive the child tax credit as a monthly stipend. These monthly payments will provide up to $300 per child starting this July through the end of the year (the remaining credit can be claimed on your 2021 tax return).”


And this, say supporters of Biden’s plan say, will keep families from having to make tough financial decisions like, “Are we going to fix the car or buy the kids’ new school shoes?”


Getting families on back their feet after dealing with lay-offs and company closures due to COVID-19 should be our first concern. But there’s also the residual impact of parents being stuck in low-wage jobs, single-parent families living on one income, the high cost of child care, the lack of paid family leave, and a general lack of family support in a highly mobile society.


The ARP isn’t a panacea. It’s a hand-up. The cost will be billions on the front end. But the savings at the back end, we’re betting, will justify the expense. Financial stability for at-risk families, including the monthly stipends and greater food security though an increase in SNAP benefits – also included in Biden’s package – will also increase the emotional well-being of children. And emotional well-being is essential for the healthy development of young children’s brains and bodies. It’s chronic stress that hurts them the most. (Bessel Van der Kolk, The Body Keeps the Score)


So let’s reassess those corporate taxes and put them back up where they should be. Experts are saying that any losses to the economy will be short-lived. After that, with billions allocated for jobs – green energy jobs – boom! FFG

Comments are closed.