Is the Expanded Harris Child Tax Credit Worth It?

Kalina Dougherty, a Milwaukee mother, knows what it would be like to receive the expanded child tax credit that Vice President Kamala Harris has proposed and is supported by some Republicans. She lived it.

In 2021, Congress expanded the federal credit, increasing payments based on the child’s age to $3,000 to $3,600 per child, up from the previous flat $2,000 per child. Congress also expanded the number of people eligible to receive aid, focusing on the poorest Americans. And the credit can be provided in monthly payments instead of the annual lump sum that families received in the past.

For Ms. Dougherty, the big tax break was a lifeline. She paid off her bills without taking on more credit card debt and student loans. Most importantly, she said, she will be able to spend more time with her 12-year-old son — something she couldn’t do while working three jobs and earning a master’s degree in public administration.

“It was the greatest thing,” Ms. Dougherty, 39, said. “I really miss this.”

But the same benefit that Ms. Dougherty saw in the law—the ability to spend less time working—was seen as a disadvantage in the eyes of critics. They worry that expanded tax breaks will reduce incentives to look for work, hurting the economy. They also argue that expanding credit would cost too much, leading to an increase in already high government deficits.

The child tax credit “is a costly transfer program for taxpayers with children who don’t need government handouts,” said the Cato Institute, a libertarian think tank.

In 2022, a year later, Congress allowed the expanded child tax credit to expire.

Without extended credit and after years of high inflation, Ms. Dougherty said she was now struggling. She holds down two jobs—one in social work, the other in a restaurant—and carefully balances her finances with her partner.

“We rely on credit cards and deciding what bill to put aside,” she said. “For example, the water bill doesn’t affect your credit, so I don’t have to pay it right now.”

But she still can’t cover everything; she couldn’t buy school supplies this year. She is pregnant and will give birth to a daughter this month. She and her partner saved some money to prepare for this moment, but unexpected medical bills came up related to pregnancy and hernia surgery.

Ms. Dougherty is not alone. Research has shown that while it worked, the expanded child tax credit cut child poverty in the United States by nearly half. In 2023, the child poverty rate in the United States was 13.7 percent. If the expanded credit were still in effect, the rate would be 8.6 percent, according to the Center on Poverty and Social Policy at Columbia University.

Ms. Dougherty’s hometown of Milwaukee will especially benefit from the help, she said. It has one of the highest child poverty rates in the country, at 30 percent. As a social worker, Ms. Dougherty said she sees much of this suffering first-hand.

She cited, in particular, the lack of affordable and quality child care. She recalled one incident when her son was 3 years old: She dropped him off at daycare (which cost $1,200 a month and was paid for with student loans) only to find her son sitting outside alone when she followed him. up. “The cost of daycare does not equate to quality,” she said.

Ms. Harris said she would restore the larger credit and add an additional supplement for newborns of up to $6,000. Her plan would cost $1.2 trillion over 10 years, nearly five times the cost of her proposal to support affordable housing, according to the Committee for a Responsible Federal Budget. J.D. Vance, Donald Trump’s vice presidential running mate, has said he also favors expanding the child tax credit, although he wouldn’t give specifics.

Once credit expands again, Ms. Dougherty said she will be able to meet her family’s basic needs, from rent to groceries, without relying on credit cards and other loans.

“It’s such a privilege to be able to raise children without struggle,” she said, adding, “With the cost of living going up, it’s just really difficult.”