The $250 Difference: A Lifeline for Working Families May Disappear this December

Most U.S. welfare programs are either targeted or means-tested — the Child Tax Credit breaks this mold.

Bryce Covert

Children from the KU Kids Deanwood Childcare Center complete a mural celebrating the launch of the Child Tax Credit on July 14, 2021, in Washington, DC. Photo by Jemal Countess/Getty Images for Community Change

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PHILADELPHIA —Alisha Gillespie’s three children call her a gentle giant” because of her height and demeanor. She’s had a difficult life. Her mother disowned her after Gillespie had a child at 17, and she spent some time unhoused. Before she landed her most recent job in the dietary department of a hospital (lost during the pandemic), her children would pump gas, unbeknownst to her, to have enough to eat.

'I didn’t have to jump through hoops just to get something.'

I’ve been on countless programs,” Gillespie says with a laugh. It’s been a revolving door.” But no government program gave her enough support to offer any stability. To get cash benefits from Temporary Assistance for Needy Families (TANF), Gillespie was required to repeatedly prove she met persnickety eligibility requirements, such as taking multiple courses on résumé building. After five years, she was no longer eligible to receive benefits if she was attending school — even though education was her ticket off of the program. 

It was about what somebody else thinks we should have,” Gillespie says. No one ever asked her what she needed. 

In July, Gillespie received a $750 child tax credit (CTC) payment after Democrats increased the benefit and offered it to more families. The money didn’t stretch far, but Gillespie used it for bills and toiletries, back-to-school supplies and a haircut. 

Most importantly, Gillespie says, I didn’t have to jump through hoops just to get something.” 

The CTC payments are already having a marked impact for poor parents. The program pushed 3 million children out of poverty and reduced hunger by 3 percentage points in its first month alone. For those in constant financial upheaval, the payments provide some stability,” says Chuck Marr, senior director of federal tax policy at the Center on Budget and Policy Priorities, especially as the funds roll into bank accounts every month.

The new credit marks a major policy departure for the United States. Congress established the cash benefit program known as Aid to Families with Dependent Children as part of the New Deal, but in the 1980s, conservatives (most prominently President Ronald Reagan) ginned up the idea that welfare queens” were taking advantage of it. 

Even some Democrats promoted the idea that the money made poor people lazy. In 1996, President Bill Clinton signed the Personal Responsibility and Work Opportunity Act, which took the promise of cash assistance for those who qualified and turned it into an obstacle course of requirements and restrictions in an attempt to ferret out who is and is not deserving.”

After that, the conversation has been very much about what do you do to push parents — force them, in some ways — to act a certain way,” says LaDonna Pavetti, vice president for family income support policy at the Center on Budget and Policy Priorities. Enrollment in TANF has since fallen to less than a quarter of eligible families. 

Until now, the underlying idea driving policymaking has continued to be that poor people need to be threatened into working. But that’s just so not how human beings operate,” Marr says. Research is clear that the stress of poverty — of constantly worrying about how to pay for basics— leads people to perform worse in life and work. 

Through the end of the year, the new CTC payments give over 90 percent of American families with children — including, for the first time, those with little to no earnings — up to $300 a month for every child younger than 6, and $250 for those 6 – 17. Most other U.S. antipoverty programs are targeted — food stamps for hunger, Medicaid for healthcare. But every family situation is different,” Marr says. What cash does is to recognize that and to allow people to really take control and to adjust to their particular circumstances.” 

Marr also cautions, This is no panacea for people under those circumstances.” 

For Gillespie, the money is nowhere near what she needs. That’s not enough money to feed anybody or to do anything or to even prepare for the future,” she says. 

When Gillespie had her hospital job, she had some financial stability. But now she is unemployed. She’s also been homeschooling out of fear of the coronavirus. She hopes to eventually save enough to move, as her current house is so deteriorated she has to fill buckets with water to bathe, but she hasn’t been able to put any money away. 

With the CTC ending soon (although an extension is currently in the reconciliation infrastructure bill), Gillespie wants Congress to increase the benefit and make it permanent. 

That would give people enough of an option to do what they need to do,” Gillespie says.

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Bryce Covert is an independent journalist writing about the economy. She is a contributing writer at The Nation. Her writing can be found in the New York Times, Time Magazine, The New Republic, the Washington Post, the New York Daily News, New York Magazine and Slate. She has also appeared on ABC, CBS, MSNBC and NPR. She won a 2016 Exceptional Merit in Media Award from the National Women’s Political Caucus.

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