By Andrea Shalal and Trevor Hunnicutt
Some 35 million American families have started receiving their first monthly payout from the U.S. government in an expanded income-support program that President Joe Biden said on Thursday could help end child poverty.
Under the Child Tax Credit program that was broadened under Biden’s COVID-19 stimulus, eligible families collect an initial monthly payment of up to $300 for each child under six years old and up to $250 for each older child.
Payouts made to families, covering nearly 60 million eligible children, totaled about $15 billion for July. The payments are automatic for many U.S. taxpayers, while others need to sign up.
Biden wants to extend expanded, monthly benefits for years to come as part of a $3.5 trillion spending plan being considered by Senate Democrats, who expect strong Republican opposition to the full bill.
“It’s our effort to make another giant step toward ending child poverty in America,” Biden said in a speech. “This can be life changing for so many families.”
The Child Tax Credit is being likened to a universal basic income for children, although it has income limits. It is expected to help people meet monthly expenses from rent to food and daycare.
The Center on Poverty and Social Policy at Columbia University estimates the expansion can reduce the U.S. child poverty rate by up to 45%.
Critics say the expanded credit is expensive and may discourage people from working. Some experts say it may not reach some of the poorest Americans who are not in the tax system.
The Democrat-backed $1.9 trillion COVID-19 legislation known as the American Rescue Plan enacted in March increased how much is paid to families under the program.
The law made half of the tax credit for the 2021 tax year payable in advance by the Internal Revenue Service in monthly installments from July through December this year.
Biden proposed making the monthly advance payments permanent and maintaining expanded benefits through 2025 at least.