Sen. Cory Booker (D-N.J.) said he’s engaged in high-level discussions about making permanent the temporary expansion to the child tax credit brought about by the American Rescue Plan that President Joe Biden has signed into law.
Speaking at a press conference on March 12, Booker hailed the $1.9 trillion relief bill—which Republicans panned as wasteful and excessive—as “in your lifetime … the biggest investment made in working Americans” and repeatedly touted it as a “massive, multi-billion dollar investment” in various priority areas, including American families, state and local governments, and unions.
Booker turned to the bill’s expansion of the child tax credit (CTC), saying that 90 percent of families would see a benefit.
“We know that the child tax credit is going to directly affect 1.6 million New Jersey kids and their families, and every dollar that we invest in every New Jersey child going above the poverty line returns $7 to our communities,” Booker said.
He added that he’s talking to the White House and business leaders about making the CTC permanent.
“I’ve tried to help coordinate a full-court press in America to make the child tax credit and the Earned Income Tax Credit changes permanent in the United States of America, so we can join our industrial peers and invest in America’s children,” he said.
The American Rescue Plan expands the CTC benefit to as much as $3,600 per child annually from $2,000, and includes more low-income households. According to an analysis from the Center on Budget and Policy Priorities, the expanded CTC is expected to lift some 9.9 million children above or closer to the poverty line, including lifting 1.1 million children out of “deep poverty.”
According to the Tax Foundation, since the American Rescue Plan allows the full credit for low-income households, it “raises marginal tax rates on these filers as they are no longer provided the credit as income rises” and this “introduces a new disincentive to work for low-income earners.”
The American Enterprise Institute, a conservative think tank, examined the role of child allowances in poverty reduction and found that such policies carry the risk of increasing the number of single-parent families in which no one is employed, which “would potentially worsen entrenched poverty in the long run, reversing gains the nation has made since the welfare reforms of the 1990s.”
Booker, in a March 10 radio interview on WNYC, said he’s talking to top lawmakers and is “having active conversations with the White House about doing some kind of game-changing legislation” that would further fight child poverty.
His remarks focused on his “baby bonds” proposal (pdf), which would create a federally funded savings account for every newborn in the United States, an idea he first proposed several years ago and reintroduced at the beginning of February.
Under the proposal, which Booker introduced with Rep. Ayanna Pressley (D-Mass.), the federal government would open a $1,000 savings account for every American child at birth, with additional deposits of up to $2,000 a year. When recipients turn 18, they could begin withdrawing the money.
“The money can be used for wealth-building things, going to college, starting a business, buying a home,” Booker said during an Instagram Live event with Pressley. “It is an effort to create generations of wealth, and the powerful thing about this is that [it] would have an incredible effect to leveling the economic playing field.”
Booker told WNYC that he’s seeking to breathe new life into the “baby bonds” program, which he promoted during his failed 2020 presidential primary run, and which didn’t gain traction in Congress when he originally proposed it.