In 2021, Congress temporarily expanded the child tax credit (CTC) as a pandemic relief measure. This expansion also served as a large-scale test of a near-universal child benefit—delivered through the tax code, mostly as monthly payments, and including the lowest-income children. The outcome was historic: Child poverty fell to its lowest level ever recorded.
At the Urban Institute’s Cash Assistance for Children: Research Roundup and the Policy Future event, speakers from a range of backgrounds and perspectives reviewed the latest evidence on the CTC—at federal and state levels—and issued a challenge: Use the best data and research to drive lasting success for children and families.
A call for evidence and expertise
Urban Institute president Sarah Rosen Wartell, opened the event—highlighting years of collaborative research between Urban, the Berkeley Opportunity Lab, and philanthropic partners including the Doris Duke Foundation.
She recalled how bipartisan momentum around unconditional cash assistance had stalled since the 2021 CTC expansion expired. But she noted there is still much to learn from successes and limits of that effort—and strengthened trust in evidence-based policymaking remains a critical foundation for future reform.
Sam Gill, president of the Doris Duke Foundation, praised the Urban–Berkeley partnership for doing just that, and demonstrating how science can strengthen democracy. “The primacy of reason, evidence, and facts,” he said, “is a value that must outlast party or ideology.” He challenged researchers to continue to defend expertise and remain open to revising preferred policies when data demand it.
Utah’s pragmatic playbook
Utah’s Department of Health and Human Services director Tracy Gruber described how her state cut its child poverty rate nearly in half, from 15 percent in 2012 to 8.6 percent in 2024.
Utah’s strategy, Gruber explained, blends conservative values with data-driven problem-solving. Its Intergenerational Poverty Initiative integrates data from multiple agencies to track progress in early childhood, education, health, and economic stability.
A newly enacted state child tax credit builds on that foundation, offering targeted relief to moderate-income families with young children. The bipartisan approach, Gruber said, relies on accountability and opportunity: Measure outcomes, invest in what works, and “pivot when something doesn’t.”
Research shows the CTC and EITC are effective anti-poverty tools
A panel moderated by Hilary Hoynes of UC Berkeley—with Jane Waldfogel of the Columbia University School of Social Work, Jacob Bastian of Rutgers University, and Pamela Herd of the University of Michigan—summarized decades of findings on income supports.
Hoynes shared the data: In 2024, child poverty stood at 13.4 percent, affecting 9.7 million children – and would be far worse without the EITC and CTC. The 2021 CTC expansion briefly cut the child poverty rate to 5.2 percent. “The impact was immediate, measurable, and entirely reversible,” she said. “When the credit expired, poverty doubled.”
Waldfogel highlighted international research that finds families use cash benefits to pay for essentials like food, rent, and education, not indulgences. In both short and long terms, cash benefits improve children’s health, education, and lifetime earnings.
Her message was unequivocal: “When you give families the resources to meet children’s basic needs, the payoff lasts a lifetime.”
Bastian drilled down on those long-term returns. Children whose families receive refundable credits are born healthier, do better in school, and earn more as adults. They are also less likely to rely on public assistance, commit crimes, or die prematurely. “Even if you don’t care about poor families,” he quipped, “this is a smart investment—it pays society back.”
But administrative barriers, noted Herd, keep many families from claiming benefits. Roughly 70 percent of Medicaid disenrollments during the post-pandemic “unwinding” stemmed from paperwork errors, not ineligibility. Similar friction hampers tax credits. Streamlining the process through automation and data-sharing could dramatically increase CTC and EITC participation.
“If you make people prove they’re eligible five times in five different ways,” Herd said, “you guarantee that those most in need will fall through the cracks.”
Panelists also addressed new experimental studies, such as Baby’s First Years, that found only modest short-term effects. Waldfogel and Bastian cautioned that interpreting those results is complicated by the fact that many families in the “control” group also received pandemic-era aid. “Context and dosage matter,” Waldfogel said. “Small studies can’t overturn decades of evidence that cash reduces hardship.”
Their conclusion: Tax credits are not mere transfers, they are investments in human capital that deliver intergenerational returns.
Maryland’s “Whole-of-Community” model
In a conversation with journalist Catherine Rampell, Maryland Governor Wes Moore (D) discussed how the Family Prosperity Act of 2023 permanently expanded Maryland’s EITC and created a new state CTC for families with children under six.
Moore emphasized delivery as much as design. Maryland’s new unified benefits screener allows residents to check eligibility for Medicaid, SNAP, and tax credits through a single online portal. The state is working with the Urban Institute to identify non-filers who qualify for credits but never claim them.
“No single agency can grow a child,” Moore said. “If we align our systems around families—not the other way around—we can make poverty rare and brief.”
Tax credits and fiscal reality
Doug Holtz-Eakin, president of the American Action Forum and former CBO director, joined Elaine Maag, senior fellow at TPC and codirector of the Urban Institute’s Innovations in Cash Assistance for Children project, to explore both bipartisan support for tax credits and the tensions over how to sustain them.
Holtz-Eakin praised the 2021 expansion as “a powerful demonstration of what policy can do” but warned against ignoring fiscal balance. “We can’t measure compassion by how much we spend,” he said. “We have to measure it by whether the spending works.”
He urged targeting refundable credits to low-income families and offsetting costs elsewhere—perhaps by revisiting subsidies for older Americans. Implementation, he added, matters: the IRS’s ability to deliver monthly payments was “an extraordinary achievement,” but not one to repeat without adequate resources.
Maag agreed that simplification and sustainability are key, but noted the efficiency with which the tax code delivered benefits. “The EITC and CTC reach families automatically, through systems that already exist,” she said. “That’s what makes them so powerful.”
She also noted that 16 states now supplement the federal CTC, offering laboratories for testing different benefit levels and delivery methods.
Both agreed that future reforms should preserve the credits’ work incentives while expanding their reach to families with little or no earnings. These are the families who gained most during 2021 and lost the most when the expansion expired.
Investing in children is growth policy
Cecilia Rouse, president of the Brookings Institution and former chair of the Council of Economic Advisers during the Biden Administration, reframed child tax credits not as welfare, but as infrastructure. “Every credible study shows that dollars spent early yield the highest returns,” she said. “This isn’t generosity—it’s growth policy.”
Rouse argued that supporting children is as critical to long-term productivity as roads or bridges. “Human capital is what makes an economy resilient,” she said, citing research showing the 2021 CTC expansion reduced food insecurity and parental stress while increasing parents’ ability to work. “The question isn’t whether we can afford to invest in kids—it’s whether we can afford not to.”
She recalled Milton Friedman’s reminder that policy change happens when “the politically impossible becomes politically inevitable.”
In turn, researchers should keep developing evidence-based policy options and be ready to put them forward when the opportunity arises.
