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House Fiscal Cliff Bills Would Increase Child Poverty
Ed Walz (Former Staff)Children of Immigrants Health Poverty & Family Economics Tax Policy
(202) 657-0685 (office)
The bipartisan children’s advocacy organization First Focus sent members of the U.S. House of Representatives an analysis today of the Permanent Tax Relief for Families and Small Businesses Act and the Spending Reduction Act of 2012 (H.R. 6684), both slated for a House floor vote. The analysis observed that the tax legislation does not extend two important family tax provisions and that H.R. 6684 would make deep cuts in investments for kids.
“One-in-five children lives in poverty today, and there are millions more living in families that are just barely getting by, so this is the worst possible time to cut initiatives that protect children from poverty,” said First Focus President Bruce Lesley.
The First Focus analysis finds that the Permanent Tax Relief for Families and Small Businesses Act does not extend improvements to the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) enacted as part of the 2009 economic stimulus law. Together, the 2009 EITC and CTC improvements lift one million children out of poverty. Failing to extend the EITC provision would result in a tax liability $500 higher for 6.5 million families with children. Failing to extend the CTC provision would result in a tax liability $800 higher for 12 million families with children.
The Spending Reduction Act would also cut the Child Tax Credit. A provision of that bill would deny the CTC to as many as 5.5 million children whose parents file federal tax returns with an Individual Taxpayer Identification Number. Families affected by this provision earn an average of $21,000 per year. The federal poverty line for a family of four is just over $23,000.
H.R. 6684 would also cut billions from federal initiatives that meet children’s basic needs:
- Repeals current law protecting children from state budget cuts that would undermine Medicaid and the Children’s Health Insurance Program (CHIP). These cuts could deny health insurance to more than 300,000 children.
- Cuts $36 billion from the Supplementation Nutrition Assistance Program (SNAP, formerly Food Stamps), which provides milk, vegetables, and other groceries to more than 20 million children. The U.S. Census Bureau reports that SNAP reduced the number of children in poverty by 1.7 million. Under H.R. 6684, 280,000 children receiving SNAP would also lose automatic eligibility for the National School Lunch Program.
- Eliminates the Social Services Block Grant (SSBG), which funds state efforts to meet critical needs for 11 million children. SSBG makes child care more affordable for the parents of 4 million children, funds child abuse prevention and response efforts that protect 1.7 million children, and finances foster care for 451,000 children victimized by abuse or neglect.
In addition, H.R. 6684 would require $19 billion in cuts to federal fiscal year 2013 non-defense discretionary initiatives. It would also maintain sequestration budget cuts to such initiatives for federal fiscal years 2014 through 2022. This budget category includes a wide range of initiatives that benefit children. Examples include child abuse and neglect prevention and response, education for children with disabilities, mental health services for troubled children, assistance for homeless children, nutrition for pregnant women, new mothers, and babies, and immunizations and community health centers.
The First Focus analysis is based on nationwide data, and proponents of the House legislation have not released state-by-state or district-specific data on the legislation’s impact on children.
“We urge Members of Congress to fully understand the impact any budget proposal will have on children and make kids’ and our nation’s future a top priority as this debate continues,” said Lesley.