How the US slashed child poverty: Lessons for Israel

• Published date: 27 September 2021
• Author: SHLOMO MAITAL
• Publication title: Jerusalem Post, The: Web Edition Articles (Israel)

For Israel, according to the National Council for the Child, nearly one in three Israeli children was living in poverty in 2020. And this has been true for many years. In comparison, the average for OECD countries [38 developed nations] is one child in every eight lives in poverty.

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But Israel and the US differ in one key respect. Israel has neglected its poor children for decades, while in recent months, in one fell swoop, the US has slashed child poverty by 40% or more. How did the US do this? And what can Israel learn from it?

First, the bare facts, how one piece of legislation slashed US child poverty. Then, the story of the handful of people who made it happen.

The Bare Facts:

Many Western nations have paid child allowances to families for decades. I grew up in Regina, Saskatchewan, Canada, and recall my parents receiving monthly child allowance checks 70 years ago. This was true of many European nations as well, including the UK and Sweden. But not the US. America spends only 0.6% of GDP on child and family benefits compared with the OECD average of 2.1%.

Only in 1997 did the United States do what other civilized nations have done for years – tackle decades-long massive underinvestment in kids, with a child tax credit that reduced family tax liability annually. The amounts involved were expanded seven times over time.

But the new expanded child tax credit, mandated by the American Rescue Plan Act of March 2021, is paid out in advance, monthly; payments began on July 15. Parents don't have to owe taxes to receive it. Payments are made by the Internal Revenue Service and amount to $250 per child under age 18 or $300 per child under age 6. And they have already slashed child poverty.

Three major changes were implemented in March. Payments are now monthly, not annual. They were increased by 50%. And families no longer had to qualify by earning enough to pay taxes – extending benefits to one-third of previously ineligible poor children.

How did this happen, in a dysfunctional US political system rife with partisanship, where the Trump tax cut of 2017 (still in force) shoveled an estimated $2.3 trillion over 10 years from middle-income to top-income tycoons?

The answer is: An effective coalition emerged, combing a dogged Congresswoman, clever senators and a research institution. Call it evidence-based politics.

The People:

The Congresswoman is named Rosa (Rosie) DeLauro. Rosie's mother was a garment worker, who worked hard in a sweatshop. Her father sold insurance. They were very poor. One day she came home from school, age 10, and found "all our furniture out on the street."

But DeLauro studied hard, went to the London School of Economics, and entered politics. She won a House of Representatives seat in Connecticut's Third District, mainly New Haven, a district that houses Yale University and many poor children.

She began promoting the expanded Child Tax Credit (CTC) in 2003. But George Bush, a...