By Katie Fleischer
Broadcast version by Emily Scott
Reporting for the Ms. Magazine -Arkansas News Service Collaboration
It's no secret that extra cash can reduce stress and allow people to do things they've been putting off-like buying a few treats, going to the doctor or paying off debts. But new evidence suggests that receiving monthly payments doesn't just impact the mental health of parents, but also the brains and futures of their children.
A recent study compared two sets of low-income families, one group who received $20/month and another who received $333/month starting at their baby's birth. After a year, researchers found that the infants whose families received $333/month had more high-frequency brain activity-which is associated with the development of cognitive processing skills and increased memory.
This experiment concludes what low-income people have always known-that poverty and the stress associated with it has a negative impact on children's health. However, it also reveals the effects of childhood poverty linger throughout someone's life, affecting their cognitive development and impacting their future education or career. While this result will need to be confirmed with further research, the study helps demonstrate that early financial interventions in infants' lives can have a measurable impact on their health and help set them up for future success.
Throughout 2021, many low-income children were receiving these cognitive and developmental benefits, thanks to the expanded child tax credit (CTC). As part of President Biden's American Rescue Plan, parents received $3,000 to $3,600 per child for 2021, split up into six monthly payments and a larger lump sum during tax season in 2022.
During the six months the program was active, child poverty was reduced by 30 percent. The payments reached more than 36 million households, keeping 3.7 million children out of poverty in December. Now, the CTC has expired, putting millions of low-income families in precarious financial positions once again.
For Sequaya, a low-income Black mom who lost her job during the pandemic, the CTC helped keep her family afloat:
"The new child tax credit payments have helped me a lot, especially since I've just gone from getting paid every week to having zero income. It's helped to put shoes on my daughter's feet and food in the fridge until my SNAP benefits come through. It's a big relief to wake up and just know, 'Okay, I'm not going to have to borrow money today because I have that extra help coming in.' It's very helpful."
Now that the monthly CTC payments have ended, moms like Sequaya are losing the financial stability they relied on. But a similar policy, guaranteed income, is another option to ensure that low-income infants can achieve the same level of cognitive development as more privileged children.
Just like the CTC, guaranteed income provides low-income families with unrestricted cash payments, giving them the flexibility to keep up with monthly costs and invest in their children's futures. To guaranteed income proponents, this new research proves that providing unrestricted monthly payments-instead of complex welfare systems that require parents to jump through confusing hoops-will benefit low-income families across the U.S.
The Magnolia Mother's Trust (MMT) is one example of how guaranteed income can have a huge impact on marginalized families. By providing Black mothers living in extreme poverty with $1,000 per month for a year, MMT has demonstrated that unrestricted financial benefits can have extremely powerful effects on children-and they plan to use the evidence from their pilot program to advocate for a federal guaranteed income policy for all low-income families.
After a year of receiving guaranteed income, the percentage of MMT participants able to pay all their bills without additional support jumped from 37 percent to 80 percent. MMT mothers were 20 percent more likely to have children performing at or above grade level, and were 27 percent more likely to seek needed medical care than other moms not receiving guaranteed income. Many of the moms found that guaranteed income allowed them to focus on their children's education and health in ways that were previously out of reach.
For example, one MMT recipient Sabrina (last name withheld), a mother of three who was laid off from her retail job at the beginning of the pandemic, was able to enroll her son in a school designed to help him with his dyslexia. Another, Elsie, who works with the disabled, could afford to pay for the uniforms and fees necessary for her children to participate in the choir and marching band at school.
And single mom Chephirah shared:
"[MMT] has really helped me in preparing for [my daughter's] school. The money has also helped me cover my monthly bills, and get caught up on some old debts. It also helps to pay for things like my daughter's school books. And it's helped me in preparing for college. My hope for her right now is to be the first one in our family to graduate from high school-my brothers and I all left school early. I want her to have a real high school diploma, not a GED. I want her to go to college, and to just know that whatever she wants to strive for, I'm gonna be right there behind her to support her 100 percent."
For many of the moms, having more consistent access to money meant they could finally stop living paycheck-to-paycheck and focus on not just physical health, but the mental health of themselves and their kids as well.
Amber, a mother of two who works as a call center operator, reflected:
"My goal with my kids is to be an all-around support system for them in all aspects of their life, especially for their mental health because I think that's a really important issue in the Black community. I want to make sure they are given the proper tools to protect their mental and physical health in order to progress in life. I'm thinking about counseling for my kids-they haven't shown any signs of the pandemic wearing on them, but it's something I worry about."
Erica works at an elementary school and dreams of opening a counseling center for kids.
"Getting to be part of the Mother's Trust this year did a lot for me and my family," she wrote. "There's the financial part that's so important, but it also helped me show up better for my kids. I don't think I ever let them down before, but I used to have to work four or five jobs to make ends meet. Having the income coming in on top of my wages from work gave me more time to spend with them since I didn't have to work extra hours to make sure they had what they needed. It just helped me build myself up-financially, mentally, emotionally-everything you need to really build yourself up."
A common story among the MMT moms is how guaranteed income gives them a financial buffer, allowing them to relax and spend more time focused on their families and themselves instead of worrying about monthly bills. For their children, it lets them avoid the perpetual stress that comes with poverty, freeing up mental space to focus on school. In the long-term, that financial stability will likely enable more low-income children to go to college and achieve higher-paying careers.
Clearly, MMT-and other guaranteed income programs across the country-reveal the huge impact that consistent financial assistance has for low-income children, providing their parents with the resources they need to prioritize their long-term needs and set their children up for future success and happiness.
A federal guaranteed income policy would enable marginalized parents to support their children's education, invest in their family's future and live their lives without the constant mental burdens of debt and living paycheck-to-paycheck. Providing unrestricted cash to those who need it most would be a transformational policy for struggling Americans, and would help low-income children escape from crushing cycles of debt and poverty.
Mother of two and guaranteed income recipient Annette agrees.
"Thanks to the new child tax credit expansion coming monthly and the Magnolia Mother's Trust, I've been able to do more for my kids and not have to worry if I can afford a school uniform or school supplies," she wrote. "If I were able to sit down with our country's leaders, I would tell them how important a program like the Trust is. The money has helped me in pursuing a better future for me and my kids, and it helps low-income women like myself better ourselves."
This story was originally reported and written by Katie Fleischer for Ms. Magazine .
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By Wesley Brown for the Arkansas Delta Informer.
Broadcast version by Freda Ross for Arkansas News Service reporting for The Arkansas Delta Informer-Winthrop Rockefeller Foundation-Public News Service Collaboration.
As ALICE families in Arkansas prepare for the 2025 tax season with the anticipation of healthy refunds, a federal tax proposal that offers substantial financial relief is currently at risk for low-and middle-income wage earners.
In Washington, D.C., Congressional Republicans may soon release a budget resolution that will set the terms of the national tax debate, including the expected extension of President Trump's signature 2017 Tax Cut and Jobs Cut law, including its changes to the Child Tax Credit (CTC). If Congress funds President Trump's ambitious budget bill, American taxpayers could also be on the hook for $5 trillion, several experts told the Arkansas Delta Informer.
And despite Vice President J.D. Vance's statements during the November election that he would like to see the federal CTC expanded to $5,000 per year, uncertainty still looms as Congress discusses whether to continue, alter, or end its provisions.
According to the Institute on Taxation and Economic Policy, that ongoing debate will significantly impact ALICE (Asset Limited, Income Constrained, Employed) households earning above the federal poverty level but less than what's needed to survive in the current economy.
Peter Gess, economic policy analyst at Arkansas Advocates for Families and Children (AAFC), agrees. He said that with the impact of rising inflation, ALICE households will be worse off if Congress decides not to expand or extend the 8-year-old tax policy.
"And so, if nothing happens, then that tax credit reverts to $1,000. And, you know, I did a quick look at inflation, and that's like 25% less value from where it was before the tax cuts in 2017," he said. "So, without keeping up with inflation, just being reverting to $1000 it'll be a lot less for families even than what it was before."
As noted, in his first term, the President pushed Congress to pass the $1.8 trillion Tax Cuts and Jobs Act (TCJA) in 2017, which made substantial permanent cuts to corporate and business taxes. That tax policy-changing law also raised the federal child tax credit from $1,000 to $2,000 and made it available to families earning up to $400,000 instead of $110,000.
When President Biden took office in 2021, he significantly expanded the child tax credit under the $1.9 trillion American Rescue Plan. Under that law, families received a $3,000 annual benefit per child ages six to 17 and $3,600 per child under six as a monthly payment for the 2021 tax year.
According to the U.S. Census Bureau, the payments ranged from $250 to $300, expanding the child tax credit to nearly 35 million U.S. families. However, those payments expired in January 2022 after Congress failed to renew the Biden-era program.
Likewise, unless Congress renews or expands the program under the Tax Cuts and Jobs Act, the federal CTC will revert to $1,000 per qualifying child in 2026. Additionally, the age limit for eligible children would decrease to 16.
ALICE families nervous about possible CTC changes
Athea Townsend of Little Rock hopes Congress will expand the tax credit closer to the $3600 maximum paid to families during the pandemic. However, she says letting it expire would be far worse for families struggling with inflation, high grocery bills, and childcare expenses.
Townsend says the expanded tax credit in 2021 helped her with expenses when she had only one child, Zen, a bright and energetic eight-year-old in the third grade. "You know, he is a growing boy, so it did help with essential things like clothes and food and help with the bills," said Townsend.
Today, however, Zen has a one-year-old brother, Zi, and the CTC has since reverted to 2017 levels of $2,000 per child annually. If Congress lets the CTC expire at the end of the year, it will impact thousands of ALICE households like hers, predicted Townsend, a marketing and graphic design professional.
"For working (single parents) and others like me, it is very much needed," she said.
In October 2014, new data from the ALICE in the Crosscurrents: An Update on Financial Hardship in Arkansas report showed that nearly 11,000 more Arkansas households like Townsend were still struggling to make ends meet in 2022 compared to the previous year.
That brings the total number of households living paycheck to paycheck across Arkansas to 562,879, representing 47% of the state's population, according to the latest update from ALICE in Arkansas, in partnership with United For ALICE.
This includes 195,972 Arkansas households in poverty and another 366,907 defined as ALICE (Asset Limited, Income Constrained, Employed), earning above the federal poverty level but less than what's needed to survive in the current economy. ALICE households include individuals and families working low-wage jobs with little or no savings and one emergency from poverty.
However, a recent report by the U.S. Census Bureau shows that the enhanced federal child tax credit during the pandemic pulled 2.9 million children across the U.S. out of poverty. This underscores the potential positive impact of the tax credit on struggling families.
New CTC proposal part of Trump budget talks
And that President Trump has ascended to the White House a second time with Republicans in control of both chambers of Congress, one of the incoming President's key economic goals is to lock in or extend parts of the law they couldn't in 2017 due to the Senate's budget reconciliation rules.
Next year, nearly all of the individual provisions of the 2017 Tax Cuts and Jobs Act (TCJA) will expire unless Congress acts. The Congressional Budget Office has estimated that fully extending the TCJA would cost $4.6 trillion over ten years. With interest
Gess and other federal CTC proponents hope that Congress will expand the popular tax provision and tweak the law to make the credit work for more families below the federal poverty line.
According to the Center on Budget and Policy Priorities (CBPP) analysis, a bipartisan and more modest expansion of the federal CTC could be a ray of hope. This proposal, developed by Senate Finance Committee Chair Ron Wyden and former House Ways and Means Committee Chair Jason Smith, aims to assist approximately 19 million children who currently receive partial credit or none due to their families' low incomes. The bill would increase the refundable tax credit to a maximum of $2,500, offering a brighter future for these families.
That bill would also make families with low or no earnings eligible for the full credit, tie benefits to the number of children in a family, adjust the credit amount annually with inflation to ensure that it does not erode over time, and provide the credit in monthly installments.
"The last thing families need is to see Washington slashing their child tax credit in half," Smith said in a Jan. 16 committee hearing, which repeatedly addressed the expiring tax break.
In a CPBB research note of Feb. 5, Kris Cox, deputy director of the progressive Washington, D.C.-based think tank, said fixing flaws in the 2017 law would deliver a more meaningful tax benefit to single parents and working-class families.
"This should mean delivering a meaningful income boost to children in families who are struggling economically, even if any extension of the 2017 tax law would, as a whole, be costly and skewed to the wealthy," said Cox.
According to Gess, suppose the Wyden Smith bill passes in its current form. In that case, ADCF estimates that 191,000 children in Arkansas, or one out of every four currently left out of the full $2,000 credit, would benefit in the first year. "The credit would especially help children in Arkansas who are Black, Indigenous and Other People of Color (BIPOC), whose parents are more likely to hold low-paying jobs, due to historical and ongoing discrimination and barriers to prosperity," he said
"So, you're getting people who make lots of money the full credit, and you're getting people that don't make very much money, who really need it, aren't getting the full credit," Gess concluded.
And despite support from the House Ways and Means Committee and the vice president, many believe that expanding or keeping the CTC from expiring will be challenging, even with bipartisan backing.
ITEP Senior Policy Analyst Joe Hughes told the Arkansas Delta Informer that upbeat statements made by Vance and others during the election season are not part of ongoing budget talks. Also, the current proposal congressional Republicans are debating to extend the Trump-era tax cuts comes with a hefty price tag of up to $5.5 trillion over the next decade, based on a Jan. 10 report by the U.S. Treasury Department,
Hughes predicts that if the new proposal keeps most of the business provisions, including the slashing of the corporate tax cuts from 39% to 21%, most benefits will flow to wealthy individuals and businesses. He said that would leave everyone else with a token tax cut and saddle the nation with a massive national debt increase.
"Last year, we found that extending the 2017 law would direct more than two-thirds of the benefits to the richest 20% of households. A family making $20,000 a year would see a modest tax cut of a hundred dollars, while a millionaire would receive tens of thousands," Hughes said in a Feb. 5 research note. "This approach is designed to offer small tax cuts to working families as political cover while delivering massive benefits to the wealthiest Americans - at the cost of a ballooning federal deficit."
New state-level CTC bill introduced to Arkansas legislature
While Congress discusses the future of the Trump-era CTC policy, state legislatures are expanding child tax credits. According to ITEP, states with fully refundable Child Tax Credits in 2024 are California, Colorado, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oregon, and Vermont. Idaho, Oklahoma, and Utah.
Arkansas does not offer state-level CTC going into the 2025 legislation session, but Rep. Denise Garner, D-Little Rock, has filed a bill that would provide a $300 refundable income tax credit for qualifying taxpayers who provide support to certain dependents.
Under House Bill 1015, the credit would be available for an individual taxpayer with net income up to $100,000 or taxpayers filing jointly with net income up to $200,000. Married taxpayers who meet the income thresholds for the credit and file separately on the same return may each claim a $150 credit against the tax due on the return of each spouse.
The bill, originally filed in November, also requires the Department of Finance and Administration (DFA) to make an annual cost-of-living adjustment to the credit amount. A DFA fiscal impact study estimates that general revenues would decrease by $238 million in fiscal 2026 and $245 million in fiscal 2027.
The DFA study shows that in tax year 2022, 618,000 taxpayers with 793,000 dependents would qualify for the credit. Approximately 370,000 Arkansas taxpayers would realize an overall reduction in tax liability at a cost of $134 million, and some 250,000 taxpayers would receive a refundable credit totaling $83 million.
Nationally, AACF data shows that 90% of Arkansas families, or 661,000 children, received monthly payments of $250 to $300 under the expanded CTC program during the pandemic. Gess said the proposed new expansion of the federal CTC before Congress would boost the family finances of around 191,000 Arkansas children at tax time this year.
An updated version of HB 1015 was submitted to the House Tax and Revenue on Jan. 15, but no hearing for the bill is on the panel's calendar. That amendment added Little Rock lawmakers, Reps. Andrew Collins and Joy Springs, as co-sponsors of the bill.
Wesley Brown wrote this article for the Arkansas Delta Informer.
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Recent federal executive orders have left many organizations in Ohio navigating uncertainty, particularly when it comes to funding for essential services.
Food banks, which serve as a critical safety net for families in need, are feeling the strain.
Joree Novotny, executive director of the Ohio Association of Foodbanks, said demand has been surging across the state as economic pressures grow, leaving local organizations struggling to keep up.
"We can do a lot with a little, but we can't do it all," Novotny pointed out. "We do rely and count on our partners in local, state and federal government to be another leg on the stool of what it takes to make sure that when people are in need and facing crisis, they can turn to us for basic help with food."
The strain comes as Gov. Mike DeWine's newly proposed state budget would reduce food bank funding by 23%, cutting it from $32 million in the last cycle to $24.5 million.
While the previous budget included a one-time $7.5 million boost, Novotny warned the reduction comes at a time when food banks are experiencing record-high demand.
Beyond government funding, food banks also face challenges in managing supply and demand. With more Ohio families turning to assistance programs, organizations are being forced to stretch resources even further.
"I just talked to someone yesterday who had a distribution in one of their local communities," Novotny noted. "They generally see 175 to 200 families come to that particular distribution for help. They had 300 families come that they were able to serve and then they had to turn another 65 away."
While organizations like the Ohio Association of Foodbanks remain committed to their mission, they are calling on policymakers to provide clarity on future funding.
Federal programs like Emergency Food Assistance Program, the Commodity Supplemental Food Program, and the Local Food Purchase Assistance Program provide about 25% of the food banks' resources, while state-funded programs like The Ohio Agricultural Clearance Program and the Ohio Food Program contribute another 20%.
Nearly half of the food distributed across Ohio's 88 counties comes from state and federal support, highlighting how crucial government funding is to hunger relief efforts.
Disclosure: The Ohio Association of Foodbanks contributes to our fund for reporting on Budget Policy and Priorities, Hunger/Food/Nutrition, Livable Wages/Working Families, and Poverty Issues. If you would like to help support news in the public interest,
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