The budget includes measures ranging from a commitment to end childhood hunger by 2015, to increased funding for the Low Income Home Energy Assistance Program, to extending aid for veterans at risk of homelessness.

Click here to read Moses’ article, “Helping Those Most in Need.”

Poverty and Early Childhood Development (pdf)

The Child Tax Credit is a federal tax credit of up to $1000 for children under age 17. For higher-income families, the credit reduces the amount they pay in taxes. For families with little or no tax liability, the current credit is partially “refundable,” that is, if the credit amount is greater than the family’s tax liability, the family can receive the difference in a direct payment. However, under current rules, the credit provides little or no help to very low-income earners. That is because the refundable credit is set at 15 percent of the amount by which a family’s earnings exceed a “threshold” — $8500 in 2008. So, for example, if a family has earnings of $8600, the family qualifies for a $15 credit (15 percent of $8600 minus $8500). But, if the family has earnings of less than $8500, the family qualifies for no credit at all. The poorest working families are completely left out, as are families without earnings.

As a result, the current child tax credit actually increases inequalities among families with children. In 2008, families with incomes below $20,000 made up 17.4 percent of tax units with children, but received only 5.5 percent of the benefits of the child tax credit. Working families with incomes below $10,000 received 0.1 percent of the benefits of the credit.

The bill now being considered by the House would — for the next two years — eliminate the earnings threshold, so that low-earning families could qualify for at least a small credit, based on 15 percent of all earnings. For example, a family with earnings of $5000 could qualify for a $750 credit, and a full-time minimum wage earner with two children would qualify for a $1000 credit for each child.  The Urban-Brookings Tax Policy Center estimates that these changes would result in 3.7 million children newly benefiting from the credit. The Center on Budget and Policy Priorities estimates that in addition, approximately 9.6 million additional children would be in families receiving larger credits due to the change.

The improved credit will be a valuable contribution to the nation’s recovery effort. Providing additional help to low-earning families helps the economy because they are likely to spend the funds quickly on basic necessities, so the spending has a strong “multiplier” effect as the spent funds circulate through the economy. In contrast, higher-income families will be more likely to save funds they receive, which may make a great deal of sense for the family, but will do less to stimulate the economy.

The expanded child credit, even on a temporary basis, is also good policy, because it ends exclusion of the poorest working families from a credit intended to broadly benefit families with children.

Even with this change, some families with children are still left out from the benefits of the child credit — families without earnings due to age, illness, disability, caretaking, or other reasons for unemployment. Modeling from the Urban Institute for CAP’s Task Force on Poverty had estimated that if the full Child Tax Credit was made available to all low-income families with children, it could reduce child poverty in the United States by 20 percent.

Still, the change being proposed in the House would be a major improvement in the Child Tax Credit, and make an important contribution to the recovery. And, it would give low-income children in working families greater access to food, clothing, school supplies, and other essential resources that can help prepare them to become America’s next generation of wage earners.

In 1999, U.K. Prime Minister Tony Blair announced a target to eliminate child poverty within a generation. Nearly 10 years later, a raft of policy initiatives have been introduced, and significant progress has been achieved on cutting poverty. The political discourse has moved from one where poverty was barely acknowledged to one in which tackling child poverty is a widely accepted goal. Challenges remain if the government is to hit even its interim target of halving child poverty by 2010, but the United Kingdom’s experience shows that setting an ambitious goal can inspire radical action.

The British government’s strategy to tackle poverty rested on three main prongs:

*Increasing income for families: The government substantially increased levels of financial support for children, with a particular focus on a child’s first year of life.

*Promoting employment: The government has taken measures to encourage, but not compel, parents into the workforce, including increased financial incentives through the National Minimum Wage and a tax credit for low-income workers, employment programs to help single parents returns to work, expanded child care, and help for families in balancing work and family life.

*Improving services for families: The government has introduced policies to narrow gaps in educational attainment, promote the participation of young people in education or training, improve housing, and encourage financial inclusion.

The United Kingdom uses a measure of relative poverty, which counts as poor those living in a household whose income is below 60 percent of median income before housing costs. On this measure, child poverty fell between 1998–99 and 2006–07 by 3.8 percentage points, from 26.1 percent (or 3.4 million children) in 1998 to 22.3 percent (or 2.9 million children) in 2006. Unrounded figures show that almost 600,000 fewer children are now living in relative poverty. Child poverty on this measure needs to fall to 1.7 million by 2010–11 in order to meet the interim target of cutting child poverty in half.

Success has also been achieved on a measure of “absolute” child poverty, which counts all those living in households whose income is below 60 percent of 1998–99 median income. Absolute child poverty has been halved, falling from 26.1 percent (3.4 million children) in 1998 to 13.1 percent (or 1.7 million children) in 2006, meaning that 1.7 million fewer children are now living in absolute poverty.

Equally impressive has been the changed political consensus on the importance of tackling child poverty. When the goal was first announced, opposition parties were skeptical and the Labour government was reluctant to talk about the goal; now child poverty is at the center of political discourse.

Yet substantial challenges remain. Looking at the U.K. experience suggests that:

The child poverty target has been pivotal in focusing policy attention.

*The politics of poverty can move—but this requires leadership.

*Increases in employment do not require tough sanctions.

*Financial support helps both working and workless families.

*Policy delivery matters and change takes time.

*Depth and incidence of poverty are both important.

*Attention must be paid to job retention and in-work poverty.

The U.K. has not discovered a silver bullet to end childhood hardship, and there is a long way to go before the promise to eliminate child poverty within a generation can be realized. But the target has shown that in setting a clear goal progress can be made, and hundreds of thousands of children are better off as a result.

Read the full report.

The Harlem Children’s Zone is America’s most ambitious and closely watched effort to break the cycle of intergenerational poverty. HCZ aims to create a “conveyor belt” for Harlem’s poor children, a series of rich and effective supports-from a “Baby College” for parents, to an all-day pre-kindergarten and extended-day charter schools, to health clinics and community centers, all the way to help in succeeding in college. Together, these efforts aim to give poor children the stimulation and the opportunities that most kids growing up in middle-class neighborhoods receive from birth. This year, HCZ will serve 8,000 children living in the 97 block Zone. The initiative has been featured on 60 Minutes, the Oprah Winfrey Show, and in the New York Times Magazine.

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Policymakers have long talked about the lessons of HCZ for anti-poverty policy nationwide, and now there are proposals to replicate the HCZ model nationally. This panel, moderated by Center for American Progress Senior Fellow Robert Gordon, brought together Geoffrey Canada, HCZ’s President and Chief Executive Officer; Roland Fryer, a Harvard economics professor and the founder of Harvard’s new Education Innovation Laboratory, a major effort to identify and evaluate promising approaches to closing the achievement gap; and Paul Tough, a New York Times Magazine editor and the author of the new book, Whatever It Takes, a critically acclaimed look at HCZ in the broader context of American poverty and education policy, to discuss HCZ’s experience to date and its implications for national policy.

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