I won't lie. Families are working hard, too often in an uphill battle, to make ends meet.
The numbers are bleak. Having a baby in our nation right now triggers a domino effect for many working families that leads to poverty. The added cost of a new child, along with the loss of income that comes with taking unpaid time off when the new baby arrives, as most people have to do, often causes serious financial problems with rippling consequences. The next domino falls because this underwater moment comes at the exact same time as family expenses rise steeply: Childcare now costs more than college in most states in our nation. And access to affordable, high quality childcare is essential. Record numbers of moms -- three-quarters -- are now either the primary or co-breadwinner for their families. Suffice it to say that parents need safe, enriching places for their children to be so they can go to work; and children need safe, enriching places to be so they can thrive.
This domino effect, started when a new baby arrives, adds up over time. It now costs an average of $200,000 to raise a child from birth to age eighteen, not including college. With that average price tag, it's not surprising that nearly a quarter of young families are living in poverty, or that nearly 1 in 5 children in our nation don't get enough nutritious food to eat because of family budget limitations.
It doesn't take a mathematician to see that we can, and we must, do better for working families, our nation and our economy.
The situation for families in our nation certainly doesn't come as a surprise. We hear every day about how hard things are for families in this country. Our presidential candidates and other politicians are continually decrying the dissolution of the middle class and talking about how important it is to keep more families from sliding into poverty.
What might be a surprise is that solutions are possible.
For example, there are pro-work tax credits that are already helping to keep many families from sliding into poverty, helping millions of working moms and dads get ahead, and boosting our economy -- but key aspects of these tax credits will expire if Congress doesn't act.
Twenty-one million moms in working families in this country receive the the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC). By offsetting payroll and income taxes, these tax credits encourage and reward hard work, boost wages, reduce poverty, and also boost our economy. The EITC and Child Tax Credit provide money that helps families afford rent, gas for cars, new shoes for children, medicine, and other necessities -- and this spending by families on basic necessities in turn also boosts our consumer-fueled economy.
The EITC and CTC make a significant difference for millions of moms and dads, including Sandra, a MomsRising member, who writes:
"I raised my son on my own. He's starting his junior year at Harvard on a full scholarship! The EITC and Child Tax Credit helped me to maintain my house, to pay for repairs, buy fuel to stay warm, help keep my car on the road so I could work and drive my son to school and community events. All this allowed me to provide a stable home life for my son while he was growing up. This stability freed him up to be a kid so he could do well in school. He's a smart kid and earned his way in to the best college in the country if not the world. The EITC and Child Tax Credit helped me afford a home to bring my son up in."
Local economies and businesses are also boosted by the EITC and Child Tax Credit. This isn't a small boost to the economy. A Brookings Institute study on EITC in San Antonio found that for each additional dollar received, $1.58 in local economic activity was generated. In fact, two-thirds of working family tax credits are spent fairly immediately, boosting the local economy. In addition, one additional permanent job would be created for each $37,000 claimed in EITC.
A program that boosts household budgets and local economies at the same time is an incredible success story on its own, but there is more: Evidence also shows that the EITC and Child Tax Credit have long-term benefits for kids too. Children whose families receive tax credits perform better in school, are healthier, and are more likely to go to college than their counterparts who do not.
Pro-economy. Pro-family. Pro-work. And anti-poverty. These are all words that describe the EITC and Child Tax Credit. In addition, these programs have received bi-partisan support for over thirty years.
Which is why it's deeply concerning that these important working family tax credits could shrink or disappear for 50 million people, including 1 million military and veteran families, if Congress doesn't take action soon. In fact, unless Congress acts, millions of moms and kids will lose some or all of the important benefits they receive from the EITC and Child Tax Credit when key provisions of the programs expire in 2017. That's just around the corner. This matters not just for families, but also for our national economy. After all, about 70 percent of our nation's GDP is now based on consumer spending and women and moms make the vast majority of those consumer purchasing decisions each day. So when families don't have funds to spend, our entire economy takes a hit.
The EITC and Child Tax Credit help stop the falling dominoes that add up to poverty by going directly to moms and dads who are working hard and spending their hard earned cash right in their local communities, giving local businesses and the economy a big boost. Congress needs to stand up for working families -- they need to make permanent key provisions of the EITC and Child Tax Credit and stop them from expiring, and they need to do it now.
Families are working hard. It's up to us to make sure our country works for families.