America’s poorest families are using new child benefits in large measure to climb out of debt, much of it likely accumulated during the pandemic.
U.S. Census Bureau
The payments of $250 to $300 per child, part of President Joe Biden’s
There’s evidence from earlier in the pandemic that people used stimulus payments to reduce their dependence on high-cost debt like payday loans, according to Alex Horowitz at Pew Charitable Trusts, who’s
That’s probably happening again, Horowitz said. “I don’t know if that was one of the goals of the child tax credit, but it is likely to be one of its benefits.”
Medical bills
In Duluth, Georgia, Tanzida Zaman said she steered her $300-a-month payments toward medical bills that accrued since last year, a result of “a lack of ownership between my two insurance providers.”
Zaman, a project manager who considers herself middle income, uses anything left over for child care for her 13-month-old daughter. She’s also used previous federal relief money on medical bills, she said.
“The stimulus and child tax credit have been a very welcoming addition,” she said.
The monthly payments had an immediate economic impact, data show. Personal incomes
But it may not last. Remaining pandemic relief programs are winding down and a wave of
The percentage of families citing food insufficiency
The grocery industry is poised to benefit. The sector could see an $8 billion lift from the child tax credits in the second half, according to Cowen Inc. analyst Oliver Chen.
Jamie Sizemore, who oversees the Feeding America, Kentucky’s Heartland food bank in central Kentucky, said she has seen lines at food pantries shrink since the first credit payments. She’s concerned people will load up on cheap, highly-processed food.
“If you’re trying to stretch your dollar, you’re not going to go to the fresh produce area,” Sizemore said.
Briana Daniels, 26, had stopped by a food pantry in Clarkston, Georgia, in mid-August, her 10-month-old daughter in the back seat. Her $300 monthly tax credit payment will only cover a week’s worth of child care, which runs $200, and maybe a bit of food.
“It goes pretty quick,” she said.