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Benefits of Expanding Child Tax Credit Outweigh Small Employment Effects

Part of the Resource Collection: Maximizing Federal Relief Funds Report
By: Center on Budget and Policy Priorities March 1, 2021
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The American Rescue Plan will temporarily increase the Child Tax Credit and make the full Child Tax Credit available to all children except those in families with the highest incomes. This proposal would markedly reduce the number of children in families with incomes below the poverty line while narrowing the gap in poverty rates between white children and Black and Latino children. Some have raised concerns that proposals to expand the Child Tax Credit and make the full credit available to all children in families with low income, including those in which a parent is out of work, will discourage work. This article, from the Center on Budget and Policy Priorities, makes the case that the strong benefits of the proposal far outweigh any potential reduction in employment.

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Financing Highlights

Report November 1, 2023

PDG B-5 Planning and Renewal Grants are being used by states across a wide range of content areas in the early childhood care and education system, and in a variety of ways. The federal funding provides a systems framework and seeks to offer flexibility within that framework. States are using the federal funding to build capacity, create infrastructure, provide direct services, and pilot work that is new for them. This work is occurring within a broad framework provided by the federal government. This brief explores the choices that PDG B-5 grantees plan for the use of the financing provided, which has impact on the overall ECCE systems that they are building and implementing. Within PDG B-5, states had to demonstrate how they would allocate the financial resources available across required and discretionary activity categories. We can learn about their priorities from a look at the choices that they made.