Reviving the Child Tax Credit Is a Winning Campaign Message for Democrats This Coming Midterms

With the November midterm elections fast approaching, the path the United States government will take over the next two years is looking very uncertain. Recent polling shows that control of both the Senate and the House of Representatives is up for grabs between Democrats and Republicans. To maintain control of both chambers - and possibly expand their majority in the Senate - Democrats will need to take advantage of any edge they can find to bring in more support.

The impact of the policy was monumental: the program lifted 3.7 million children out of poverty, decreased food insufficiency for families with children by an estimated 26%, and led to the lowest rate of childhood poverty in U.S. history.

Fortunately for Democratic candidates, there's a way to gain an electoral edge while simultaneously supporting highly effective social policy: campaigning on the expanded Child Tax Credit (CTC).

The expanded CTC was enacted as part of President Biden's American Rescue Plan in early 2021. It augmented the existing Child Tax Credit to provide substantially larger payments to families with children, delivered monthly, while making low-income families eligible for the full benefits. For example, while a middle-class family with a 4-year-old and 7-year-old would previously have received a one-time payment of $4,000, the expanded CTC provided them with $550 per month, totalling $6,600 for the year. At the same time, 23 million families became eligible to receive the credit for the first time.

The impact of the policy was monumental: the program lifted 3.7 million children out of poverty, decreased food insufficiency for families with children by an estimated 26%, and led to the lowest rate of childhood poverty in U.S. history. Last week, Biden described the policy as "one of the most effective programs we've ever seen."

Yet despite its incredible success, Congress has not yet renewed the expanded CTC beyond its original one-year duration. While the Biden administration pushed to make the program permanent in its Build Back Better legislative package, the effort was derailed in the Senate by uniform opposition from Republicans as well as from Democratic Sen. Joe Manchin (WV). While many of the programs from Build Back Better were later enacted through the Inflation Reduction Act, passed in August, the expanded CTC was not among them. As a result, since the program lapsed in January 2022, millions of children have fallen back into poverty.

Congressional opposition to continuing the expanded CTC was bolstered by early polling after the program's enactment showing that Americans didn't have a favorable view of continuing the expanded credit beyond its one-year duration. While the conventional wisdom at the time was that the policy wasn't generally popular, recent evidence challenges this conclusion.

A messaging experiment conducted in August 2022 for the advocacy group Economic Security Project Action found that political ads that focused on the expanded CTC received a net positive response from potential voters, and were actually among the most persuasive this election cycle, shifting voter choice by up to 15 points from Republican to Democratic candidates. These results bolster the conclusion of a June 2022 survey by Democracy Corps, which identified the expanded CTC as a powerful motivating policy for voters this November. The new results suggest that the earlier tepid reception to the expanded CTC may have been due to its novelty and not yet having time to appreciate its impact. Now that families have had a chance to better understand the policy--and directly benefit from it--they view it far more favorably.

These results present a highly compelling argument for why Democratic candidates should focus on the expanded CTC in their campaigns. But the question that then arises is: now that the Inflation Reduction Act has been passed, how can the program be extended?

The most likely answer lies in a year-end bill called "tax extenders," which is most often used to renew the corporate research and development tax credit. The renewal has broad support from both Democrats and Republicans, but multiple Senate Democrats have drawn a line in the sand, saying they will only vote for the bill if it includes a continuation of the expanded CTC. Sen. Sherrod Brown (D-Ohio) went so far as to say he would "lay down in front of a bulldozer" to prevent corporate tax credits from moving ahead without the expanded CTC.

While it's unclear if these senators currently have enough leverage to push the continuation through, given that it would require 10 GOP senators to overcome a Senate filibuster, a strong showing by Democrats in the midterms could significantly strengthen their position. And, if they maintain control of the House of Representative and expand their majority in the Senate, it would also open the possibility of passing the policy in 2023 through budget reconciliation, which would not require Republican support.

For now, the choice for Democratic candidates couldn't be clearer: campaign on renewing the expanded Child Tax Credit. It will help their chances at the polls in November and bring the country closer to reviving the most impactful anti-poverty program in a generation.