‘I knew they were hungry’: the stimulus feature that lifts millions of US kids out of poverty

A few months into the pandemic the tooth fairy didn’t show up. Mary Beth Cochran was caring for her six-year-old grandson, Howie, in the small town of Canton, North Carolina, and having lost her Kmart job and with it more than half her income, she couldn’t afford food let alone a dollar under the pillow.

Howie woke that morning and shouted out to his grandmother: “Memaw, my tooth’s still here, what happened?” He frantically scoured the bedding for a note or coins, then slumped to the floor and cried.

Related: The California mothers fighting for a home in a pandemic – photo essay

Cochran was tempted to say to the boy: “Tooth fairy couldn’t come because she’s run out of money.” But she didn’t. “You know, sometimes tooth fairy can’t get to all the children,” she said.

Cochran, 52, is no stranger to the hardships that living in poverty in the United States can bring. She has had to put her marriage on hold because she can’t afford it – living together with her husband would cost them hundreds of dollars in lost benefits.

But the Covid-19 crisis has pushed her to new extremes that have tested her ability to provide for Howie and his sister Annie, 11. Cochran has cared for the children over the past five years after her eldest daughter, their mother, fell into drug addiction and homelessness. Howie and Annie’s two other siblings are looked after by another of Cochran’s daughters who lives nearby.

With $814 a month in disability pay and $236 in child support, from which she must subtract $600 in rent, Cochran has $450 a month and food stamps to feed and clothe the two children in her care.

As weeks of the pandemic passed by and resources tightened, necessities started to peel away. Clothes and shoes that Cochran used to buy for the kids from thrift stores and bargain basements now became strictly second-hand.

When even cast-off shoes for the rapidly growing Howie became beyond her reach, Cochran skipped buying the medicines she takes for her own chronic back problem and bipolar disorder.

The toughest part has been the knowledge that there have been nights when the children have gone to bed hungry. “It breaks my heart,” she said. “I know it’s not my fault, but I wish things could be different. I wish I could give them everything they need.”

•••

Now Cochran has a chance to give her young charges everything they need. Joe Biden’s $1.9tn pandemic relief package, the American Rescue Plan, signed into law by the president earlier this month, contains a relatively unheeded feature that could radically improve the lives of Annie and Howie and millions of other American children like them trapped in poverty.

The provision, known as the child tax credit, is so much more than the cold, bureaucratic transaction suggested by its title. It will transform the way that welfare is addressed in the US, bringing it into line with European and other wealthier countries by discarding the old shibboleth of deserving and undeserving poor that has dogged America’s approach for a quarter of a century.

Most significantly, it will have the potential to cut child poverty in the country in half by lifting more than 5 million American kids out of its iron grip.

“Millions of children will benefit,” said Kathryn Edin, professor of sociology at Princeton. “It’s amazing. It’s dignifying, it doesn’t stigmatize, it no longer segregates poor children but tells them they are important and allows them to live as part of society.”

Under the new provision, families will receive $3,600 a year for each child under six, and $3,000 a year for each older child. The money will be paid monthly, rather than the current annual lump sum, easing the burden throughout the year, and it will no longer be tied to any work requirements.

Its impact will spread far and wide. A family like Cochran’s will benefit with $500 a month, no strings attached, doubling her available cash for her grandkids.

Almost 70 million children will be included in the scheme – that’s more than 90% of all American kids. And the impact, social scientists believe, will be transformative.

The Center on Poverty and Social Policy at Columbia University has calculated that about 5.5 million children will be lifted out of poverty – more than half those currently plagued by it. The injection of cash support will have a stunning effect especially in communities of color.

One in five Black children are currently locked into poverty in America; they are projected to see a 55% drop in poverty rates. Hispanic children too are expected to see a boost, with 53% lifted out of poverty.

“This would be the biggest poverty reduction legislation since the introduction of social security [in the 1930s],” said Zachary Parolin, one of the Columbia authors. “We could look back on this moment, and this legislation, as an historic turning point in the development of the US welfare state.”

So what does all this mean to the actual kids – to the Howies and Annies of America?

Edin has a strong take on that question, having helped focus public attention on the crisis of child poverty in America with her 2015 book, $2 a Day. It delivered the gut-wrenching news that there were 1.5 million families in the US – including 3 million children – eking out a virtually cashless existence on no more than $2 a person a day.

Edin began studying poverty in the early 1990s, and had a front-row seat on the 1996 welfare reforms that dramatically changed the way the US interacted with its poor. The move scrapped cash aid for low-income families with children and replaced it with a work requirement that meant that those without a job were disconnected from state help.

The sociologist watched aghast as more and more families – especially those which were African American, Hispanic or headed by a single mother – were forced into direst need by a diabolical catch-22. Many of them were too poor to work, and because they weren’t in work they were deemed undeserving of benefits.

“In $2 a Day we told the story of the woman who couldn’t work because she couldn’t put gas in her car. Once you end up in that kind of spiral it’s very hard to get out of, and it puts your kids at risk.”

As a result of what Edin calls the “toxic alchemy” of the 1996 welfare reforms, by the mid-2000s one in five single mothers were neither working nor receiving any welfare benefits. They were dependent on food stamps and living essentially cashless in the richest nation on Earth.

The terrible hardship that Edin watched unfolding is prevalent today. A separate 2019 Columbia University study found that more than one in three children in the US are penalized because their families earn too little to be fully eligible for benefits.

That includes 23 million children who are too poor to receive state aid.

This hard-edged approach has separated the US from many other high-income nations such as Canada, the UK and Australia, which offer large swaths of their populations a guaranteed income to rear their children. The work-related path taken by the US essentially abandoned its most vulnerable children to the vagaries of food insecurity, eviction and all the mental and physical health problems that flow from being poor.

You can see what those harsh winds can do through the experiences of the Cochrans during the pandemic. Every month when Mary Beth received her disability money, Annie, a nervous child racked by anxiety instilled by her unstable early childhood, would approach her.

“Memaw, are you OK?” she would say. “Do we have enough food to last this month?”

The honest answer was, no. By the third week in the month the cash was gone, the food stamps dried up. Cochran stopped buying fresh salad – Annie’s favorite – because it was too expensive, turning to less healthy packaged foods such as hotdogs and burgers.

Even then, there was not enough to feed the children. By the end of the month there was no way out of it. Cochran, who doesn’t own a car, would have to beg a lift to the soup kitchen.

“It hurts so much,” she said. “I feel like I’m letting them down. I knew they were hungry, and there was nothing I could do to change it.”

•••

The devastating shift in 1996 away from cash aid to work-related tax credits was founded upon the view that poverty is a moral deficiency, a form of victim blaming that stems back generations in America. It was signed into law by a Democratic president, Bill Clinton, and received strong backing from Biden, then a US senator from Delaware.

Biden tried to justify the reform’s tough work requirements by arguing at the time that “too many welfare recipients spend far too long on welfare and do far too little in exchange for their benefits”.

Today, Biden finds himself at the forefront of a movement that is beginning to undo some of the damage wrought by that legislation he supported 25 years ago. But his about-turn hasn’t come without a shove.

Until relatively recently, Biden remained agnostic about the idea of addressing child poverty amid the destruction of the pandemic. It took the energetic intervention of a Democratic congresswoman to force the child allowance on to his coronavirus relief package.

That congresswoman was Rosa DeLauro of Connecticut, who has been striving to get subsidies for children on to the statute books for almost two decades. In 2003 she introduced her first “advancement of the child” bill, re-entering it every two years only to see it die repeatedly for lack of political support.

These were the lonely years in the wilderness when child poverty was considered insignificant. “It wasn’t a question of opposition, it was a question of indifference,” she told the Guardian. “So for a while, yes, I was a lone voice.”

But she kept her eyes doggedly on the prize, driven by her deep understanding of children in need based on her own personal experiences. When she was nine, her family in New Haven fell on hard times and were evicted from their home.

She went to live, like Annie and Howie, with her grandmother. “My family struggled financially for most of my parents’ lives. My own background inspires me to keep pushing,” she said.

Now all those years of effort have paid dividends. “For the US this is historic,” she said of the new child allowance. “It’s akin to what Franklin Roosevelt did with the New Deal through social security which lifted 90% of seniors out of poverty – President Biden is lifting millions of children out of poverty.”

So what changed? What led the US to pull back from 25 years of a policy that, at best, could be described as tough love, at worst looks like cruelty towards its most defenseless children?

DeLauro ascribes the shifting mood to the pandemic, which she says has “shone a bright light on the health and economic inequities and the racial disparities in our system”.

Edin agrees that if it hadn’t been for the pandemic we might not be here. Such glaring hardship for so many Americans has made it impossible to continue to victim-blame the “undeserving” poor.

“The undeserving-deserving divide breaks down when people who do deserving things don’t get what society has promised them. The labor market is so fragile, and so many people feel on the edge, you really don’t have two groups any more.”

The other great driving force behind the new provisions has been race. The eruption of racial justice protests last summer following the death in police custody of George Floyd has led to a renewed focus on police brutality and the treatment of Black communities within the criminal justice system.

But it has also put new vigor in movements to challenge the growing inequality between racial groups in the US and push back against the white supremacist narrative unleashed by Donald Trump. One of the beneficiaries of this new energy has been the cause of child poverty.

The Rev Dr Starsky Wilson is himself an example of the links between the struggle for racial justice and the battle to lift children out of poverty. He was co-chair of the Ferguson Commission, an independent review of the impediments to racial equality convened in the wake of the 2014 police killing in Ferguson, Missouri, of the unarmed Black teenager Michael Brown.

Today Wilson is president of the Children’s Defense Fund, a leading US advocacy group whose mission is to make sure every child in America has what they need to thrive. He views the new child allowances as a corrective to generations of public policy skewed against communities of color, which resulted in the vast 90% wealth gap between African American families and their white counterparts.

“The movement for racial justice, starting in Ferguson and culminating in the largest racial justice mobilization in history in 2020, has absolutely changed our ability to talk about public responsibility to respond to racial inequality,” he said.

Wilson evoked a young child living in Lower St Louis where he used to pastor, and pondered what the new $300-a-month allowance for their family would mean for them. “It’s going to mean food on the table in July when they are out of school and there is no summer feeding programs. It is going to mean the child feeling settled and safe, each and every day.”

The challenge now for Wilson and all the others who have campaigned for so long for a better deal for America’s children is to make this victory last. Under the pandemic relief package, the new allowances will be in place for one year only, but the hope is that they will prove so popular that Congress will be obliged to make them permanent.

Mary Beth Cochran would certainly welcome that. Once she starts receiving the $500-a-month checks this summer she plans to pay off her bills and then maybe buy a used car. She won’t have to skip her meds any more or go to the soup kitchen, and when the pandemic lifts she plans to drive to the Smoky Mountains of Tennessee so Annie and Howie can play in the rivers.

And the tooth fairy will be back.

• This article was amended on 27 March 2021 to convey that social security was introduced in the 1930s.