How Will Biden’s Fix for Child Poverty Affect Kids’ Health?

Note: This transcript has been created with a combination of machine ears and human eyes. There may be small differences between this document and the audio version, which is one of many reasons we encourage you to listen to the episode!

Dan Gorenstein: Some people are calling it historic.President Biden’s coronavirus relief bill includes major changes to the Child Tax Credit…changes that could raise millions of kids out of poverty.

It’ll cost $110 billion dollars. And it’s only going to last a year but Democrats are banking on the plan being so popular, they’ll have the votes to make it permanent.

Today, poverty’s effects on kids’ health. And how cash could help them live longer.

From the studio at the Leonard Davis Institute at the University of Pennsylvania, I’m Dan Gorenstein and this is Tradeoffs. 

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DG: When Juell Frazier was a kid growing up in Boston life was hard. Her mother worked the occasional small job. 

Juell Frazier: You know, there were some days where she had to pay rent or she had to pay gas. There were some times where we didn’t have gas or electricity.

DG: Juell did her best to pretend she wasn’t poor. She remembers coming up with a plan in eighth grade to prove it to her classmates.

JF: I asked my mom to bring some lunch for me at school, to cook some macaroni and some chicken for me and my friends. My mom said she was going to come. 

DG: Juell bragged her mom was a great cook. 

JF: So I can impress my friends. And in my mind it’s like, yeah, we’re really not poor, you know, my mom’s showing up, she’s bringing food.

DG: But her mom didn’t always show up when she said she would. As it got closer to lunch time, Juell called. No answer. 

She called again. Nothing. 

JF: I’m ashamed. Now I’m embarrassed in front of my friends because people kind of joke, ‘”You’re probably on welfare, you don’t have no food. Where’s your mom at? Why your mom didn’t show up?” And the fact that my mom didn’t show up, you know, it’s just like, oh, boy.

DG: That’s the day Juell says…she knew. 

JF: That time for me really, really sticks out because it was just things that I try to mask, just not being poor or looking poor or acting poor, if you will. But at that very moment, I just knew, like, alight, there’s no more masking or covering or hiding you’re poor.

DG: Juell’s mom didn’t show up because she had an accident, falling and breaking her ankle.  

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DG:Soon after that, her mom had an issue with their landlord. The family was evicted…moved into a shelter for a while…losing the few things they brought with them.

More than 10 million kids in the U.S. live below the poverty line today…that’s about $28,000 for a family of four in an average cost city.

President Biden plans to cut that number almost in half for this year.

News clip: It appears that the House has just passed President Biden’s $1.9 trillion Covid relief package…

News clip: Help is on the way. Half of America’s children who are in poverty will not be in poverty because of this bill. Help is on the way.

DG: The expanded child tax credit passed this week by Congress will go a long way towards doing that. The expansion represents a major change.

Currently you don’t get any benefit until you hit a certain income threshold. Then…the more you make, the more you get…up to a point.

The max is $2000 per kid. Higher income families get the credit as a tax reduction. Poor families who don’t make enough can get some of that money as a refund.

Today, 27 million kids get a partial credit or no credit at all says Chuck Marr, who we spoke to by phone. 

Chuck Marr: So roughly half of the Black children in the country, roughly half of the Latino children in the country, roughly half of children living in rural areas don’t receive the full amount because their parents don’t make enough money.

DG: Chuck is at the Center on Budget and Policy Priorities, a left-leaning think tank in Washington. He’s one of the people calling this moment historic.

CM: This is a major, major reduction in child poverty.

DG: That’s because the expanded child tax credit is no longer tied to work. No job requirements. No income thresholds. And it turns a once-a-year tax credit into a monthly check.  $300 for every kid under 6, $250 for kids aged 6 to 17.

Researchers at Columbia University project these changes to the child tax credit will lift more than 4 million kids above the poverty line. 

We know a lot about the effects poverty has on health. Researchers have shown living in poverty can cause cognitive and physical harm. 

A groundbreaking 2016 paper from Stanford found the richest men live 15 years longer than the poorest men in the U.S. while the richest American women live 10 years longer than the poorest women. 

Many lasting effects occur early in life — one of the biggest culprits: a lack of healthy food. 

Deborah Frank says the first three years of a child’s life are a uniquely vulnerable time. 

Deborah Frank: Think about a baby, they’re all head.

DG: Deborah is the founding director of the Grow Clinic at Boston Medical Center, a clinic for malnourished kids, and she’s a retired professor of child health and well-being at the Boston University School of Medicine. 

DF: Their brain goes to two-thirds of an adult size in the first year of life. And so the rapidly growing part of the organism is the most vulnerable part of the organism.  

DG: Deborah explains brains can’t store calories. They need a constant supply of nutrients to build all the connections that help us function. A hungry brain has a hard time regulating things like behavior, emotion and attention. When these kids grow up, she says, the evidence is clear that they face all sorts of problems.

DF: Everything you can name, okay.

DG: Heart disease. Diabetes. Hypertension. Learning disabilities. Attention deficit. Depression.

Poverty hurts. Deborah saw it all the time. In the mom who couldn’t afford shampoo for her child’s lice. In the mom who couldn’t afford to wash the bedbugs out of sheets.

DF: I remember once a mom had come into the office to talk to the social worker, and I said, oh, well, the you know, the two boys can sit out here for a little bit, and then the little one started to cry and I went out and the older one was sort of sitting there looking like he didn’t know the kid.

DG: She thought she knew what had just happened, the older brother popped his younger brother.

DF: And I went over and I put my arm around the little kid and I said, “What’s the matter?” And he just said, “I’m so hungry.” And the big kid was even more embarrassed. It wasn’t that he’d hit the kid. It’s that little kid didn’t have the restraint not to share the family secret.    

DG: An estimated 13 million  kids may face hunger because of the pandemic, according to the national food bank Feeding America. Biden’s relief package also boosts benefits to the Supplemental Nutrition Assistance Program, or SNAP, through September.

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DG: When Juell lost her job as a residential counselor at a therapeutic school for girls, she was a single mom of an 18-month old. She fast-learned how to stretch her $150 a month in SNAP benefits.

JF: I didn’t personally like hot dogs, but, if that’s what my daughter liked and I thought it was good enough for her at that moment…I made a meal that was rice and hamburger. That’s not what I typically like to eat, but that’s something that you create and you put together when you go into a struggle to stretch meals.

DG: Juell got good at the stretch-it meals. But $150 a month for food meant everything had to line up right to make it through the month.

JF: Towards the end of the month, you know, you lose food…you know, you may have a day where your family comes over and you cook what you have for everyone and that leaves you with less. Lots of people go through what I went through.

DG: Those months, dinners might just be a peanut butter and jelly sandwich. Whatever there was…Juell made her daughter the priority.

JF: It could be there was sometimes where if there just wasn’t enough, you know, maybe sometimes I wouldn’t eat so long as I made sure that my child ate was all I was concerned about.

DG: When we come back…what the research says about whether cash improves health…toxic stress and Juell’s housing crisis. 

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DG: Growing up poor is bad for a kid’s health. 

Starting from Day 1, low-income kids are more likely to be born at low birth weights, die in their first year of life or require medical attention. Berkeley economist Hilary Hoynes says decades worth of evidence shows that this expanded child tax credit is a good antidote.

Hilary Hoynes: There’s been a real accumulated amount of evidence that shows that greater resources lead to meaningful and important improvements in health and economic well-being in the longer term.

DG: Hilary co-authored a seminal 2019 study from the National Academies of Sciences, Engineering and Medicine that found, in part, cash has improved child well-being. She admits some of their findings seem like common sense.

HH: You know what? When children eat better, they end up healthier, and if you were to say that to your mother, she’d be like, “That’s what you spend all day working on, honey? No offense, darling, but that seems pretty obvious.” And she’s right. It is obvious. But we didn’t know this.

DG: The list of what we now know is impressive. And long. 

Giving cash improves the mental and physical health of moms and kids. Increases the chance of finishing high school and going to college. And it may lower the rates of chronic conditions down the road like heart disease, diabetes and hypertension.

HH: We do have a small number of research studies that show that more resources in childhood leads to lower chronic conditions in adulthood.

DG: For example, poor children with asthma in the U.S. were more likely to be in poor health five years later compared to children from wealthier families over that same time period.

The country as a whole spends more than half a trillion dollars every year treating diabetes, hypertension and heart disease according to the Centers for Disease Control. Hilary says it’s an important new area of study.

HH: But it all points in the direction of having meaningful reductions in chronic conditions. But we still have more to learn.

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DG: Tara Hayes agrees with the goals of a revamped child tax credit. She wants to see fewer children grow up in poverty. But she says the surest way to improve child health: pour it into moms and babies.

Tara Hayes: The earlier that we do all that we can to improve the health of the child, the better. And so really, that starts in the womb.

DG: Tara is with the right-leaning American Action Forum and like many conservative critics, she’s troubled by the idea of cutting monthly checks to parents with no strings attached. It’s a policy, she believes, that risks leaving people satisfied with the status quo — either out of work, or locked in low-wage, dead-end jobs. 

TH: It really is increasing self-reliance and self-sufficiency, that is what drives people out of poverty. 

DG: Tara prefers the earned income tax credit program, where the size of the benefit grows the more a person earns. 

TH: Ultimately, I don’t think many people really just sit and try to figure out how to not work but I just think having programs that push people in that direction can be beneficial.

DG: Evidence shows the earned income tax credit has driven more single mothers into the labor market, though researchers found little effect on men and a small drop in the number of married mothers who worked.

At the same time, researchers in Canada found no decrease in employment after implementing a nearly identical plan to Biden’s back in 2016…and recent experiments with cash payments in the U.S. have shown no effect and even a boost to employment. 

Berkeley economist Hilary Hoynes marvels at how much we’ve learned about the importance of more financial resources on kids health, especially early in life. Twenty, thirty years ago…that research didn’t exist.

Hilary Hoynes: I think there was one study that showed that greater cash benefits led to reductions in low birth weight.

DG: One critical advancement: financial security can help treat what’s called toxic stress. Newer research has shown people who live in a near constant state of worry over things like employment, safety or money are more likely to have health problems.

That means you are more likely to develop chronic conditions and die sooner. Hilary says a 2014 paper found a bump in income actually led people’s health to improve.  

HH: Which suggests that these chronic stress physiological conditions can, in fact, be improved with greater resources.

DG: Housing concerns took up a lot of Juell Frazier’s time this past year. She’s now 36 and living with her two teenage girls in Boston.

Juell was laid off from her temp job at Beth Israel Deaconess Medical Center just as COVID hit. She has a Section 8 housing voucher.

And she sent in all her paperwork to the housing office, explaining she’d lost her income and needed her rent adjusted. But she says she couldn’t get a hold of anyone.

JF: Finally, I received an eviction notice. I do what I’m supposed to do and I’m in jeopardy of losing housing in a pandemic with two kids and I’m just like, no, this just can’t be. 

DG: Juell says it took 11 months to sort out. 

It was the kind of stress that makes it almost impossible to think about anything else. Make plans. Enjoy time with the kids.

Under the expanded child tax credit, Juell’s going to have a bit more cushion. She’s eligible to get $500 a month starting in July.

DG: How do you think it would affect your mental and your physical health if you’ve got less money stress?

JF: Oh my goodness, I mean, less money, stress. I think you could be normal, if you will.

You know, I just think that people who are in poverty or, you know, just doesn’t have enough, you’re in a certain type of space. You know, you just feel like you’re always scrounging around to try to make it work. You got to rob you got to rob Peter to pay Paul. You know, it’s just, it’s a lot. So I think you would feel a little normal. You won’t feel so worried. You won’t feel so scared. You won’t feel so stressed. 

DG: Juell’s not sure how she’ll spend the money. She’s back at work, another health care job. Maybe she’ll start a college account for her daughters, a savings account for emergencies…or use it as a downpayment to launch her own business. 

Whatever she does, Juell says, it’ll be an investment in them.

JF: Life is really all about…it’s all about you but when you have kids, it becomes all about them and making sure that, you know, their future is going to be bright.

DG: I’m Dan Gorenstein and this is Tradeoffs.