Clinton proposes plan that would lift millions out of poverty

She would help some of the country’s most destitute.

By Bryce Covert – – – – –

During a news cycle swirling around comments Donald Trump made describing sexual assault and the political fallout he’s now suffering, a new policy proposal that Democratic nominee Hillary Clinton put forward didn’t get much attention.

But her plan to expand a tax credit available to people with children and tweak it slightly to make it available to the poorest Americans could dramatically reduce poverty.

Clinton announced that as president she would seek to expand the Child Tax Credit, doubling the maximum a family can receive from the government from $1,000 to $2,000 for each child up to age four.

She would also expand the refundability of the credit so it kicks in at the first dollar a family earns — a technical way to make sure that low-income Americans who make too little to owe federal income taxes can still receive the benefit. Right now, families earning $3,000 or less don’t get the Child Tax Credit at all, while only those who make more than about $10,000 can get the full amount.

Clinton’s changes would provide big rewards for poor Americans. The Center on Budget and Policy Priorities estimates that more than 14 million families would get some increased income from Clinton’s plan. And those who would benefit the most are the people who have the least: 5.2 million people living in deep poverty, defined as earning an income below half the poverty line or about $10,000 for a family of three, would see more money.

In the end, this proposed expansion of the Child Tax Credit alone would lift 1.5 million people above the poverty line and push another 9.4 million closer to it.

The fact that her plan would greatly impact some of the most destitute is significant especially given Clinton’s role in welfare reform. In 1996, according to her own telling, she helped round up votes to pass the Personal Responsibility and Work Opportunity Reconciliation Act — legislation that significantly changed the country’s cash assistance welfare program and pushed many people off the rolls.

Clinton has defended that bill. But one of the important fallouts from it has been an increase in hardship among people at the very bottom. The number of families living at below half the poverty line is higher now than when welfare reform passed. Researchers have recently found that the share of people who live in extreme poverty, or survive on $2 a day per person, increased 159 percent since it passed.

Clinton’s plan, then, would be a partial response to this sharp increase in need, sending more assistance to families in deep poverty. But the Child Tax Credit is only available to families with income. Those who for whatever reason can’t find or keep a job would be left out.

Most other developed countries have universal child allowances, which give parents, no matter their circumstances, some amount of money for their children. The U.S. could do something similar to reach everyone in need, whether or not they’re employed. According to The Century Foundation, enacting a child allowance that gives parents $2,500 for each child under the age of six would lift 3.2 million children out of poverty — nearly double the 1.7 million currently lifted by the Child Tax Credit — and cost about $17.7 billion.

The more the country is willing to spend, the more poverty would come down. If the country spent $200 billion each year on child allowances, child poverty would be cut in half.

Those are big numbers, but it’s all relative. Republican presidential nominee Donald Trump has put forward a tax plan that would cost $6.2 trillion over a decade, with the largest benefits flowing overwhemingly to the country’s richest, giving the poorest fifth of the country just $120 more on average over a decade, compared to $1.5 million for the top 0.1 percent.

Clinton’s plans look like a mirror image. Hers would raise taxes on the richest fifth of Americans to pay for her priorities, including the expanded Child Tax Credit.

Clinton has laid out other ways she would seek to help low-income Americans. She has promised to increase spending on affordable housing development, double spending on Early Head Start for low-income families with young children, increase the minimum wage, guarantee paid family leave and childcare assistance, and invest in jobs.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: