"When the American Rescue Plan passed, proponents argued, based on a 2019 National Academies of Sciences report, that the child allowance would reduce poverty without meaningfully discouraging parental employment. Opponents, including me ( director of poverty studies and a senior fellow at the American Enterprise Institute), argued that the allowance’s short-term effects on poverty would be at least partly reversed in the long run because the allowance would lead some parents to stop working and would discourage marriage.... Federal statistics indicate that in 2021, when child allowance checks were sent out for the last six months of the year, child poverty fell from the previous year’s 9.7 percent to just 5.2 percent — the lowest rate on record. Census Bureau researchers have estimated that more than a third of that reduction was a result of the expanded child tax credit...A University of Chicago study from October 2021, led by the economists Kevin Corinth and Bruce Meyer, concluded that if the child allowance was made permanent, 1.5 million parents would stop working. As a result, rather than child poverty falling by one-third, the decline would be 22 percent.
Comment: Fiscal conservatives will always be excited to use projected data to counteract the now well proven benefits of economic support for poor families. They will forever love tax benefits for the wealthy without evaluating negative social or productivity effects.