Commentary

Making child care more affordable in Alaska is a win-win — the federal Child Tax Credit can help

Families would benefit if tax credits available for six months in 2021 were extended into the future

January 19, 2023 5:27 pm

For a six-month period in 2021, American families started receiving automatic monthly payments of as much as $300 per child to use for whatever they needed. (Getty Images)

During my time in service to the people of Alaska, I was mystified year after year that the debate around our support for children and families could often erupt into controversy. My experience showed me that the debates were around the edges when the sound discussions could have been in the middle. It is in the middle where most can agree and policies can be crafted that effectuate the support we all want to see. 

At the federal level, I have watched a similar pattern transpire with Republican and Democratic members of the U.S. House and Senate fighting hard on the edges and not pulling together where American families need them most. 

For a brief, six-month period in 2021, something life-changing happened for tens of millions of American families: They started receiving automatic monthly payments of as much as $300 per child to use for whatever they needed. The tax credit was temporarily made fully refundable, allowing the lowest-income families to receive the full value of the credit even if they did not owe taxes. Before this change such families could not receive the full value of the credit that was available. 

With the average cost of $11,300 per year to raise a child in Alaska, it provided tremendous relief for working families throughout our state, and in many cases literally lifted children out of poverty. 

But Congress allowed the payments to expire in January, ending an expanded child tax credit that could have been a source of financial stability as inflation makes almost everything more expensive.

Whether the 2021 rules will be reenacted remains in flux as of this writing. Current policy proposals to amend the Child Tax Credit (CTC) in meaningful ways are before Congress right now that could benefit so many families. If the 2021 changes to the credit were in place in a typical year, experts predict that child poverty could be reduced by 40% and income fluctuations could be smoothed somewhat—and both results could have significant implications for improving health, development, and later life prospects for the beneficiaries of the Child Tax Credit.

Lifting families out of poverty should not be a partisan issue.

Democrats in Congress have been in favor of including the enhanced child tax credit in legislation. It’s important for both parties to act now that control of the House has changed hands. When the child tax credit was expanded in 2021, it was part of the American Rescue Plan pandemic relief bill that passed without a single Republican vote. Lifting families out of poverty should not be a partisan issue. 

Its not outside the realm of possibility for some conservatives to join forces on an expanded child benefit. The initial CTC proposal came from the National Commission on Children, established under the waning years of the Reagan administration. Using the tax code to support at-risk families could garner bipartisan support at a time of greater emphasis on family values and effective government intervention. This challenges the GOP to make good on its newfound self-conception as a multi-ethnic, working-class party – one whose economic and political interests would be ill-suited by objecting to putting more money in the pockets of working-class parents.

Clearly, the proposal to address the financial burdens facing working families will save money down the road – something that fiscal conservatives and moderates in Congress should appreciate.

In an increasingly competitive global economy, we need all of our children to reach their full potential so they are prepared for the jobs of tomorrow. Research shows that when children grow up experiencing poverty, they tend to grow up less healthy, complete less formal schooling and earn less as adults. But when we help families make ends meet, and enable parents to work, our childrens outcomes improve, and their futures brighten. Thats not just good for kids; its imperative for our overall economy, particularly here in Alaska. We also need Alaskan parents to be able to work, so they can support their families and grow our economy.

Making child care more affordable is a win-win. Our children and our families are Alaska’s most valuable resource. 

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