With Biden’s spending plan in peril, Philly families set to lose $1 billion in benefits

Tom Stanley and his family.

Tom Stanley and his family. (Courtesy of Tom Stanley)

When U.S. Senator Joe Manchin (D-WV) told Fox News “I cannot vote” for the Build Back Better Act on Sunday morning, it threw the Biden administration’s social agenda into peril.

It also threw into doubt whether Philadelphia, long among the poorest big cities in the United States, will reap the benefits of proposals aimed at alleviating poverty and shoring up the stability of the middle class.

Combined with an expansion of the earned income tax credit, the expanded child tax credit could put more than $1 billion in Philadelphians’ pockets in 2022, according to the Mayor’s Policy Office, by continuing benefits launched in the American Rescue Plan Act. That’s nearly one-fifth of the total city budget.

Those tax policy changes also had the potential to lift 75,000 Philadelphians out of poverty, and cut the child poverty rate by a third, according to the Office.

  • WHYY thanks our sponsors — become a WHYY sponsor

While local data is not yet available, the expanded child tax credit kept 3.8 million U.S. children out of poverty in November, according to Columbia University’s Center on Poverty and Social Policy.

“It’s really just confounding to me that … we would just stop and we would go backwards and push all of those families back into poverty again in 2022,” said Beth McConnell, director of policy for Philadelphia’s Office of Community Empowerment and Opportunity (CEO).

The political future of Build Back Better remains in flux as Democrats’ razor-thin majority in the Senate demands full consensus of its members. Sen. Chuck Shumer (D-NY) vowed to bring the bill to a vote anyway. Manchin presented his own $1.8 trillion package to the White House last week, which included funding for universal pre-K and climate change, but did not extend the expansion to the child tax credit, the Washington Post reported.

Manchin has questioned the overall cost of Biden’s plan amid rising inflation, while also reportedly expressing concerns about if Americans would spend the tax credit money responsibly, according to the Huffington Post. Federal survey data shows parents receiving the benefit used it most for food and essential bills, according to an analysis of Census Bureau’s’ Pulse Survey.

  • WHYY thanks our sponsors — become a WHYY sponsor

“Democrats have just one option, and that is to move forward. We cannot be deterred when Pennsylvania families are counting on us to lower costs and help them get back to work,” said Sen. Bob Casey (D-PA).

In a statement, Casey said he was “especially concerned” about a lapse in the expanded child tax credit.

“This fall, I spoke with a mother in Allentown who told me that she had never felt seen by the government until she began to receive the child tax credit following the American Rescue Plan,” he said. “I am going to keep fighting for her, and for all of the Pennsylvanians who rely on these dollars to make ends meet.”

The expanded child tax credit was created through the American Rescue Plan Act, which increased the amount of the credit, split it into monthly payments, and eliminated minimum income requirements. Half of the payments, which total $3,000 for kids 6 and up, and $3,600 for younger children, will be disbursed when parents file for taxes in 2022.

Without renewal, the last monthly payment went out on December 15.

Organizations that work with low-income families say ending those checks will have swift and devastating effects.

“The payments have been a lifeline for the families CLS represents, and they’ve especially helped disabled parents support their children as the prices of groceries and clothing have risen,” said Kristen Dama, managing attorney with Community Legal Services of Philadelphia.

“I’m thinking in particular about one client who will no longer be able to keep up with rent for her family,” she continued.

Across Pennsylvania, where 2.3 million children benefit from the program, parents who didn’t opt out of the payments describe them as a help.

​​Tom Stanley, who lives in Montgomery County, said he was “very disappointed” to hear that Build Back Better seemed poised to falter. His family had been using the tax credit money to help cover child care expenses.

“The child tax credit payments became a standard piece of our budget over the last six months,” he said. Along with the tax credits, the expansion of free pre-K proposed in Biden’s plan would help his family’s finances.

Rather than focus on Manchin, though, Stanley blames the GOP for the bill’s lack of support.

“At least we have a chance to replace one of those ‘no’ votes here in Pennsylvania,” he said, referring to the retiring Republican U.S. Senator Pat Toomey.

Saturdays just got more interesting.

Want a digest of WHYY’s programs, events & stories? Sign up for our weekly newsletter.

Together we can reach 100% of WHYY’s fiscal year goal