Cash Tax Credits
So Much More Than a Check
03. 07. 2023
Lessons Learned in the Fight for the Child Tax Credit
What We Learned
The two years ESP and our allies spent championing the expanded Child Tax Credit did not succeed, this time, in establishing a permanent new generational investment in American families. But we made huge strides on these issues — advancing leaps and bounds from where the original tax credit began nearly 25 years ago. We’ve brought the movement to the brink of a new era on these issues.
But the real success of the last two years ultimately depends on how we process the insights from this campaign and adapt our strategy in the years ahead. Let’s start by establishing some key learnings from the Child Tax Credit campaign:
- Cash is winnable.
Starting with the emergency stimulus checks during COVID and playing out through the monthly advance payments under the expanded Child Tax Credit as the economy recovered, sending cash directly to Americans has emerged as a sensible, highly effective policy choice. In fact, these programs proved to be popular among recipients and non-recipients alike — with strong favorables even crossing party lines.
- Monthly payments are an undeniable success.
The monthly nature of the expanded Child Tax Credit ended up being a game-changer. These automatic payments aligned naturally with the way many families budget — and the reliability reduced household stress and enabled parents to work, plan, and provide for their children and communities. A Columbia University study found that monthly payments lift one-third more children above the poverty line each month on average than annual payments.
- The federal government gets credit when programs are direct, visible, and regular.
Despite the lack of a cohesive marketing strategy, and despite the fact that it lasted just six months, the expanded Child Tax Credit broke through and was felt in the lives of millions of parents—and they credited the government for it. While many social programs get lost in the muddle (the “submerged-state” phenomenon that leads to protests like “Keep your government hands off my Medicare”), these payments were broadly understood and attributed to the federal government, even though it may have taken some time. With more aggressive implementation and messaging, we could use this capital to make further political and policy advances.
- Go big and take credit — you gotta do both.
The more data we get, the more we can demonstrate the historic policy success of the expanded Child Tax Credit. For six months, it was truly transformative. Leaders need to use the bully pulpit more aggressively in moments like this. Unfortunately, the Child Tax Credit never benefited from the degree of executive branch barnstorming that other successes like the infrastructure law did, or from even the more modest but concerted government outreach and visibility that the vaccine drive enjoyed. One way to force that function in the future would be to bake in more outreach marketing funding into the legislation — similar to how the Affordable Care Act has large marketing budgets baked into each of its enrollment periods — creating even more opportunity for officials to tout the program and its success, and in turn raise the awareness and popularity of the program.
- This fight is very much a long game.
There’s little doubt that the only reason an expanded Child Tax Credit came to pass in the first place is that allies in Congress and in advocacy organizations had spent more than two decades working on this exact question. When the legislative window to advance this policy arose, the community was ready for it. Despite the eventual setback, we made progress on building support for the Child Tax Credit and have established deeply committed congressional allies and coalition members ready to build on this success in the future.
- There’s still work to do to build a stronger political constituency to prioritize renewing and strengthening the Child Tax Credit.
While our coalition was impressive in size and scope, we didn’t fully succeed in assembling a political army around the Child Tax Credit, legislatively or politically. The Child Tax Credit is not yet a top priority within labor, netroots, or political organizing organizations. That provides obvious low-hanging fruit for the strategy moving forward. Furthermore, many potential allies saw the program as unpopular, failing to recognize its deep popularity among Black and Latino communities, parents, and even among many white working-class voters of both parties. And after the program wasn’t extended, many of its supporters did not feel emboldened to claim political credit for the policy’s success — an omission that reduced the credit’s visibility throughout last year.
- We need to refine our messages to engage and navigate deep-seated values and identities.
We must deepen our understanding of core audiences, understand what will build trust among them, and connect the Child Tax Credit to their values. It’s critical to recognize how long-standing misperceptions, perpetuated by political opponents, present messaging hurdles in reaching certain groups. Whether these misperceptions are related to the impacts of the credit on people’s desire to work, or on inflation; or whether they’re rooted in pervasive or race-based notions of deservedness, it is important that we find ways to reach these audiences without sacrificing our structural analysis of today’s economy, our progress on racial justice, and the moral imperative to create more economic security for Americans. We acknowledge a tension exists between arguments celebrating the anti-poverty effects of the policy (a popular positioning from progressive champions) and arguments that focus on supporting working families and building the middle class, and this tension meant that an otherwise well-coordinated coalition never truly aligned on a core message. In the next fight, it’s not only essential to identify the messages that are most persuasive among a wide swath of voters — it’s mission critical that champions and partners, regardless of ideology, align and sing from the same hymnal.
- Six months is just the start.
Implementing the expansion of the Child Tax Credit was a complex operational, policy, and political endeavor. Building a politically formidable constituency around a heretofore unheralded provision of the tax code remains similarly challenging. Six months of checks were certainly noticed by parents, but that proved to be too little time for families to truly rely on the payments. To have the program expire as a contentious national election was getting underway did not help our cause. Consequently, we may now be only at the “end of the beginning” of our effort. Patience and persistence is key. It took many decades, and several hard-fought attempts to build the environment in which the Affordable Care Act would eventually (and narrowly) get passed into law. The progress we’ve made in the last few years on the Child Tax Credit is undeniable, and our momentum going forward is real. If we capitalize on this momentum by continuing to invest in the advocacy ecosystem pushing for the Child Tax Credit, we will be in a position to win this fight down the road.
The 2021 expansion of the Child Tax Credit was a dramatic demonstration of how policy can directly and immediately change lives for the better. In the midst of an unprecedented public health crisis that plunged the economy into freefall, the expanded Child Tax Credit allowed its recipients to defy gravity—providing powerful, reliable resources, in the form of monthly checks for nearly all American families with children. It enabled parents to get back to work and provide for their children and communities; it improved families’ well being and reduced their stress; and it created stability in the face of chaos. We still have not fathomed the full extent of the positive effects of this milestone legislation.
And yet, despite its undeniable public good, helping millions of children and working parents to thrive, the expanded Child Tax Credit was not renewed by Congress, joining the pantheon of other popular, effective pro-family policies—such as gun safety measures, paid leave, child and elder care support, and so many others—that our legislature has failed to rally behind.
Despite Congress’s lapse, Economic Security Project is proud to have led a robust and still-growing coalition in a two-year fight to pass, implement, and extend the expanded Child Tax Credit, building on the work of many leaders and organizations. The expanded tax credit, even as a temporary measure, represents a leap forward. Effectively a six-month trial of direct cash payments, the expanded Child Tax Credit is helping us redefine the 21st century social contract into one that trusts people and empowers them to contribute to their families and communities. It’s an approach that prioritizes the freedom and economic security of working people through public investment and public goods, creating the conditions in which families can prosper. Now that the dust has settled, we find ourselves in the early days of a new era of policy making to support working families and children.
How we got here matters. And how well we learn the lessons of this battle will determine how quickly we move on from this setback into the next phase of the fight.
This report sets out to explain how this unlikely experiment came to be; to understand the specific political climate in which these events played out; to catalog the efforts to champion the program so we can build on them; and to grapple with lessons learned so that we may more fully achieve our goals in the future. We’re reminded that Social Security, as we know it today, took decades of prolonged advocacy to realize and to earn the trust of the American people. The same can be said of modern health care reform. We submit a thorough, honest accounting of this fight — both to underscore the value that the investments made in this campaign have already returned, and to make the case for continued investments in the leaders championing the Child Tax Credit. Our coalition is strong and ready for action. If we learn the right lessons from this fight, this setback will be momentary, and we can begin our next campaigns—at both the state and federal levels—without delay and with the confidence that we can achieve the historic victories American families deserve.
This report draws lessons that we believe are applicable across the CTC movement, but primarily pulls from work that ESP, and the coalitions we ran, were most involved in. The movement for an expanded Child Tax Credit was only as robust and successful as it was due to the contributions of many partners from a range of different backgrounds and perspectives. We want to specifically recognize:
- Racial justice and civil rights organizations that did essential public education and inside advocacy, including NAACP, National Urban League, UnidosUS, Color of Change, and the Leadership Conference for Civil and Human Rights.
- The most engaged and effective participants in the Child Tax Credit public campaign working group, Cash War Room, and Keep Families Afloat, including: Bread for the World; Center for American Progress; Center on Budget and Policy Priorities; Children’s Health Watch; Community Change; Coalition on Humanity Forward; Friends Committee on National Legislation; Human Needs; Mayors for a Guaranteed Income, MomsRising; Network Lobby; ParentsTogether; People’s Action; Progressive Change Campaign Committee; RESULTS; and the ABC Coalition (led by Children’s Defense Fund and Center for the Study of Social Policy), which provided a home for the public campaign working group and convened and coordinated policy response.
- Organizations doing critically important research such as Columbia University Center on Poverty and Social Policy; Urban-Brookings Tax Policy Center; the Institute on Taxation and Economic Policy; Niskanen Center; and the Joint Economic Committee.
- The most engaged state partners, such as Maine People’s Alliance; Economic Security Illinois; the West Virginia Citizens Action Group; SPACEs In Action; and Income Movement. Common Sense Media did invaluable work in Arizona, and has served as a national partner throughout this fight.
- Insightful advisers like Seiji Carpenter, David Binder, Celinda Lake, Dylan Hewitt, Adrienne Elrod, Sachin Chheda, Katrina Gamble and Sojourn Strategies, the teams at SKDK, Bully Pulpit Interactive, and Stan Greenberg, who partnered with us on invaluable public opinion research; and Fighting Chance for Families, a project of Groundwork Collaborative and Data for Progress, who produced especially voluminous research, in particular an essential tracking poll that served as the first data on the political implications of the expanded Child Tax Credit.
- And, of course, the vaunted “CTC Six” congressional champions (Sens. Michael Bennet, Sherrod Brown, and Cory Booker, and Reps. Rosa DeLauro, Suzan DelBene, and Ritchie Torres), as well as the White House and Treasury team led by Gene Sperling.
- Important groups engaged in the fight for a care economy that prioritized the CTC, coordinated by Care in Action.