Biden calls for child care cost-cutting, extending CTC payments during State of the Union address
Biden says 'no one has to raise a family in poverty'
At his State of the Union address on March 1, President Joe Biden called for extending Child Tax Credit payments and reducing child care costs. (iStock)
President Joe Biden advocated for an extension of the expanded Child Tax Credit (CTC) and a reduction of child care costs during his State of the Union address on March 1.
Biden described slashing the cost of child care as one component of his plan to combat inflation while discussing the economic and financial state of the country. The expanded CTC also expired in December 2021, prompting some Senate Democrats to write a letter to the president urging him to reinstate them through the Build Back Better Act.
"Middle-class and working families shouldn’t have to pay more than 7% of their income for care of young children," Biden said during his address. In fact, surging child care costs resulted in families taking on side gigs, borrowing money from family and even moving, according to a study conducted by The Penny Hoarder.
Families who are in need of extra cash and trying to reduce their monthly expenses amid rising inflation could consider taking out a personal loan at a lower interest rate. Head to Credible to compare rates and lenders and find a timeline that works for you.
HALF OF AMERICANS EXPECT LOWER TAX REFUNDS THIS YEAR, SURVEY SAYS
Biden calls for slashing child care costs: 'Cut the cost in half for most families'
During his speech to Congress, Biden stated that he wants to change the standard of living for the working class by cutting child care costs, adding that many American families pay up to $14,000 each year per child.
"My plan will cut the cost in half for most families and help parents, including millions of women, who left the workforce during the pandemic because they couldn’t afford child care, to be able to get back to work," the president said.
The Penny Hoarder study also noted that the majority of parents (84%) reported feeling overwhelmed by the cost of child care, and 44% of respondents said that they pay $1,000 or more per month in expenses. Biden added that his cost-cutting plan will include home, long-term care and affordable housing.
"Middle-class and working families shouldn’t have to pay more than 7% of their income for care of young children," he said.
If you're looking to reduce your monthly expenses and pay off outstanding debt amid rising child care costs, you could consider a debt consolidation loan. Visit Credible to compare multiple lenders at once and choose the one with the best interest rate for you.
14 MILLION AMERICANS HAVE OVER $10K IN CREDIT CARD DEBT, SURVEY SAYS: 3 WAYS TO PAY IT DOWN QUICKLY
Democrats push for extension of Child Tax Credit payments
Senate Democrats have urged Biden to reinstate monthly Child Tax Credit payments, which they say were projected to lower the poverty rate among children by 40%. Those expanded payments expired in December 2021, and the lawmakers noted in their January letter, citing U.S. Census Bureau data, that nearly all the families receiving the payments used them for necessities like housing and groceries.
"The CTC’s monthly payments, which averaged $444 for participating families in December, have helped families cope with pandemic-induced price increases – and will continue to do so as families receive the second half of their expanded tax credit this spring," the letter stated.
The expanded payments were paid out by the Internal Revenue Service in monthly advance payments of $250 per qualifying child aged six to 17 and $300 per child for those younger than six. The remainder of the full credit of the expanded child tax credit payments was set to be distributed to eligible taxpayers with the 2022 income tax return.
The total CTC was increased from $2,000 to $3,000 for each child ages six to 17, and $3,600 per child under the age of six for the 2021 tax year.
Families who have been affected by the stoppage of expanded CTC payments could consider consolidating high-interest credit card debt into a personal loan as a way to save money. Contact Credible to speak to a loan expert and get all of your questions answered.
Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.