While many of the bill’s supporters claim that children and other vulnerable populations will not be harmed by the changes made in reconciliation, this is just not true. It is impossible to achieve the level of funding cuts set forth in the bill without causing direct and indirect impacts to the health and well-being of children and families. 

The House reconciliation bill singles out programs that disproportionately benefit children for cuts. Only 8.87% of total federal spending goes to kids, but the programs targeted by the bill devote a much larger share to children. For example, 20% of Medicaid funding goes to children, 100% of the funding in the Children’s Health Insurance Program (CHIP) goes to children and pregnant women, and 43% of SNAP dollars go to families with children. These three programs rank among the top 10 largest federal investments in children and are targeted for more than $1 trillion in cuts. 

These programs work alongside one another to support our nation’s kids. Any of the individual cuts included in this bill would be considered a loss for children, and when taken together, this bill is a disaster for kids. For example, 14 million children depend on both Medicaid and SNAP. This “double jeopardy” risks their access to both food and health insurance. In addition, enrollment in certain benefit programs makes it easier for children to receive other supports. For instance, SNAP recipients automatically qualify for free school meals and child care subsidies. If children are not enrolled in SNAP or Medicaid, they are also likely to experience reduced participation in these other programs that qualify for automatic eligibility. 

Medicaid, SNAP, and tax policy are essential to keeping kids fed, healthy, and cared for. As the House bill moves to the Senate, Congress still has an opportunity to choose babies over billionaires. First Focus Campaign for Children calls on lawmakers to protect children by stopping this bill. 

Child Health

Every child deserves a healthy start and the opportunity to thrive, but policies that undermine access to essential health care put the well-being, development, and future of millions of children at risk. The proposed budget reconciliation bill includes several provisions that would significantly alter Medicaid and CHIP, jeopardizing health care access for over 37 million children who rely on the programs. 

Moratorium on Rule that Simplifies Enrollment and Eligibility

The House bill would place a moratorium on the Centers for Medicare & Medicaid Services’ (CMS) “Streamlining Medicaid, CHIP, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes” rule, which was designed to reduce red tape and make it easier for eligible children to enroll and stay enrolled in Medicaid and CHIP. The rule also included important protections for CHIP by prohibiting states from imposing:

• Waiting periods: This is an outdated mechanism imposed on children after they voluntarily disenroll from a group health insurance plan, such as a parent’s employer-sponsored plan. When CHIP was established in 1997, states were required to make sure that CHIP did not substitute for group health insurance. One method that states used was to impose a period of time a child must remain uninsured before enrolling in CHIP. Many states ended waiting periods after the Affordable Care Act limited them to 90 days. However, as of February 2024, nine states still required children to remain uninsured for a period of time before they could sign on to CHIP. The final rule helped to ensure that no child eligible for CHIP will be forced to go without coverage, preventing critical gaps in their health care.

• Lock-out periods: Under the final rule, states are prohibited from imposing mandatory “lock-out” periods on children whose families cannot keep up with their state’s CHIP premium payments. Prior to the final rule, a dozen states used these lock-out periods to keep children from re-enrolling in CHIP for a certain period of time after they lost coverage due to non-payment of premiums. The child could be forced to go without coverage until the end of the lock-out period, even when the family could afford to pay the overdue premiums.

• Annual/Lifetime Benefit Caps: States have several options for how they implement CHIP. States can choose 1) to expand Medicaid coverage for children (funded with CHIP dollars; a.k.a M-CHIP); 2) design a separate CHIP; or 3) use a combination approach. Most states use a combination approach. For kids enrolled in M-CHIP, a state must follow Medicaid rules. For separate CHIPs, states have greater flexibility in designing benefit packages, a policy that has led some states to limit certain benefits and services, such as dental and mental health care, including imposing annual and lifetime caps. Medicaid does not allow annual or lifetime limits, and the Affordable Care Act extended these protections to other populations. The final rule meant that states could no longer impose these limits on specific benefits that children who are enrolled in separate CHIPs need.

Reducing Retroactive Coverage

Retroactive Medicaid coverage allows medical bills incurred up to 90 days before application approval to be covered. The House bill would reduce this vital coverage from 90 days to 30 days. Retroactive coverage is crucial for newborns, children with sudden illnesses, and families facing emergencies, ensuring they are not left with unaffordable medical debt while their application is processed. Without this protection, families will be forced to delay or forgo crucial medical care for their children due to cost concerns, leading to preventable hospitalizations and worsening chronic conditions.

Penalizing States that Provide Coverage to Immigrants

The reconciliation package would penalize the federal matching rate (FMAP) for adults in Medicaid expansion states, reducing it from 90% to 80%, if the state provides financial assistance or “comprehensive health benefits” to residents ineligible for Medicaid due to immigration status. Currently, 14 states and the District of Columbia have chosen to use state dollars (not federal Medicaid funds) to extend some form of comprehensive health coverage to all children, regardless of immigration status. Two states also provide coverage to pregnant women regardless of immigration status.

This penalty effectively doubles the state’s cost of maintaining Medicaid expansion and also represents an unprecedented federal intrusion into state policy decisions about how to use state-only funds. This provision will force states to choose between maintaining coverage for immigrants, disproportionately children and pregnant women, and preserving federal Medicaid expansion funding. The provision would likely result in thousands of immigrant children losing access to preventive care, chronic disease management, and treatment for acute conditions. This loss of coverage could lead to worsened health outcomes, increased emergency department utilization, and higher long-term health care costs for families and the communities in which they live.

Moratorium on Provider Taxes

A provision to limit states’ flexibility to finance their Medicaid programs through provider taxes would have far-reaching consequences for pediatric care. These taxes on hospitals and other health care providers generate revenue that helps states support their Medicaid programs. Restricting state ability to use this financing mechanism would:

• Force cuts to services, eligibility, or provider payments that directly affect children.
• Create significant financial pressure on children’s hospitals and pediatric specialty providers that depend heavily on Medicaid.
• Threaten school-based health services that rely on support from Medicaid.
• Jeopardize mental health and developmental services for children, which are often financially vulnerable.
• Hit hardest in states with limited tax bases that rely on provider taxes to maintain their programs.

Children’s hospitals, community clinics, and pediatric specialists often operate on thin margins while serving a high proportion of Medicaid patients. Financial instability in these critical institutions would have immediate consequences for children’s access to care, including specialty care, particularly in underserved areas.

Banning Use of Federal Dollars for Gender-Affirming Care

The budget reconciliation bill includes a provision that would prohibit use of federal Medicaid/CHIP funding for gender affirming care for all individuals, including children and youth. This legislative move would have significant negative consequences for the health and well-being of transgender and gender-diverse youth.

Banning federal funding for gender affirming care means that transgender youth in families with low-incomes would lose access to guideline-directed, medically necessary health care interventions. These interventions may include puberty blockers, hormone therapy, and related mental health services, which are recognized by major medical organizations as critical components of care for gender dysphoria in youth. Without coverage, many families would be unable to afford these treatments out-of-pocket.

Research consistently shows that access to gender affirming care is associated with improved mental health, reduced rates of depression and anxiety, and lower risk of suicide among transgender youth. Denying this care can lead to increased psychological distress, feelings of rejection, and a higher incidence of self-harm and suicide attempts. 

Work Requirements

The House bill would require certain adults on Medicaid to work or participate in work-related activities for at least 80 hours per month, with some exemptions for parents and caregivers of small children. Despite these exemptions, imposing work requirements on Medicaid poses significant risks to children’s health. When parents or other adults in a child’s household lose Medicaid coverage due to work requirements — often because of complex paperwork or administrative hurdles — children are less likely to receive the care they need. This is because children’s health and development are closely tied to the health and stability of their parents and caregivers. Loss of coverage for adults can lead to increased family stress, reduced access to health care, and greater financial hardship, all of which negatively affect children’s well-being and development.

Additionally, work requirements create more bureaucratic barriers for families, leading to eligible children losing coverage due to missed paperwork or confusing processes. Past experience, such as in Arkansas, showed that thousands lost coverage for procedural reasons, not because they were actually ineligible. When children lose Medicaid, they lose access to essential services — including preventive care, mental health, and developmental screenings — that are critical for healthy growth, especially for those with special health needs.

Affordable Care Act Marketplace 

More than 2 million children are currently enrolled in Marketplace plans. The reconciliation package includes revisions to Marketplace policies, including special enrollment periods, income verification, auto re-enrollment, and other items that will increase costs for Marketplace enrollees or make it harder to stay covered, which will lead to more uninsured individuals, including children. 

A last-minute change to the House bill will provide funding for special payments called cost-sharing reductions (CSRs), which help lower out-of-pocket costs like deductibles and copays for people with low incomes who buy what are known as Silver plans in the Marketplace. In the past, the government stopped paying these CSRs, but insurers still had to offer the reductions, so they raised the prices of Silver plans to make up the difference—a move known as “Silver Loading.” This actually helped some families get more financial help to pay their premiums for other types of Marketplace plans (e.g., Bronze or Gold). Now that the government will start paying CSRs again, insurers won’t need to “Silver Load,” but this change will have the consequence of raising health insurance premiums for families insured through the Marketplace, making it harder for them to afford coverage and possibly leaving them uninsured.

Potentially even more impactful on Marketplace coverage is what the reconciliation bill fails to do. Under the Affordable Care Act, individuals and families can receive advance premium tax credits (APTCs), based on their income, to help lower their monthly premium cost for purchasing a plan on the Marketplace. The American Rescue Plan Act (ARPA) made “enhancements” to the APTCs, providing even more assistance to lower the cost of premiums. The House bill fails to extend the enhanced APTC levels, which expire at the end of 2025. While the base level of APTCs remain in statute, the additional assistance provided under ARPA significantly improved costs for families enrolling in Marketplace coverage, helping millions more individuals, including children, becoming insured. Since 2020, enrollment in the Marketplace more than doubled from 11 million individuals to over 24 million in 2025. By allowing the enhanced level of APTCs to expire, the Congressional Budget Office estimates that over 4 million people will lose their health insurance.

Nutrition

As the nation’s largest federal food assistance program, the Supplemental Nutrition Assistance Program (SNAP) is the first line of defense against hunger and food insecurity for low-income children. More than 15 million children — representing close to 40% of the program’s participants — rely on SNAP for consistent, healthy meals. In 2023, SNAP lifted more than 1.3 million children out of poverty, and countless studies show that SNAP participation improves food security, health, educational, and long-term economic outcomes for children. First Focus Campaign for Children is deeply concerned that the changes contained in the budget reconciliation bill will increase the number of children who experience hunger or food insecurity. 

Transfer of Cost to States

The federal government has historically fully funded the food benefit costs of SNAP. In this bill, Congress backs away from that commitment and mandates that states cover at least 5% of the food benefit cost. While 5% may seem like a low percentage, this translates to billions of dollars for some states. Moreover, states could be required to pay much more than 5%, with Congress proposing increased responsibility to states based on error rates within the program. In some instances, this provision could lead to states being responsible for up to 25% of the cost. Because error rates are calculated annually, states could fall into different categories of funding responsibility from year-to-year. In addition to the food benefit cost transfer, the budget reconciliation bill also restructures the funding balance so that states will be responsible for 75% of the administrative costs. Currently, the federal and state governments share administrative costs 50%-50%. 

These cost transfers place many states in an unfeasible position. The potential variability of a state’s cost share also makes it extremely difficult for states to plan for program continuation or prepare budgets for future years. Analysts anticipate that, if confirmed, these transfers will force states to reduce benefits, limit eligibility, or, in some cases, even end their SNAP programs. These pressures would lead to a reality where the government assists hungry children in some states and leaves them behind in others. 

Work Requirements

Currently, SNAP exempts households with children from work requirements. The House bill would exempt only families with children under the age of 7. Proponents of the provision reason that children over the age of 7 are in school during the day, allowing guardians to work. This change shows a complete misunderstanding of school schedules, ignoring summer and seasonal breaks and the fact that the hours of a school day are shorter than conventional work hours. It also represents a disregard for the costs and challenges of finding after-school child care. But most concerning, this provision communicates a willingness to risk the health and well-being of children over the age of 7. Adults who care for dependent children with disabilities also are not exempt from work requirements under this bill. Work requirements in SNAP are especially dangerous as they reduce the household’s overall benefits leading to less money for groceries and ultimately diminishing the amount of food the household has for children. Estimates place at least 4 million children living in households at risk of losing some or all of their benefits as a result of the new work requirements. 

Thrifty Food Plan 

The Thrifty Food Plan is the national standard by which the government determines the cost of buying food to maintain a healthy diet and subsequently sets SNAP benefit amounts based on that calculation. The plan was adjusted by the Department of Agriculture (USDA) in 2021 to modernize the standards and take into account the latest nutritional guidelines and food prices. This evaluation led to a slight benefit increase for SNAP recipients, with most households receiving an increase of $12-14 a month. The 2021 adjustment is credited with lifting 1 million children out of poverty. The House budget reconciliation bill would cancel future benefit adjustments, jeopardizing families’ ability to afford the basic necessities and components of a healthy diet. As grocery prices continue to rise, Congress should be taking steps to protect SNAP users from this fluctuation, not jeopardizing child nutrition further by ending future adjustments. 

Cascading Effect onto School Meals

Although the budget reconciliation bill does not specifically mention school meals, its provisions will directly impact the way schools address child hunger. Children who participate in SNAP currently are automatically enrolled in free school meals. If states are forced to limit the number of children covered by SNAP, students could lose their enrollment in free school meals due to administrative burdens, even if they are still qualified. In addition, fewer schools are expected to participate in the Community Eligibility Provision (CEP), which allows them to provide free school meals to the entire student body, if states have to limit their SNAP participation. The two programs are intertwined, with CEP reimbursement rates linked to the percentage of students that a school has enrolled in SNAP. Children cannot afford to lose the nutrition support they receive through schools at any time, but to not have safeguards for school meal enrollment at a time when SNAP cuts are endangering food at home is especially cruel. 

Economic Security

The tax code offers one of the most powerful tools for improving the lives of children, with the Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC) among the top 10 programs contributing to federal investments in kids. In 2023, the CTC and EITC combined lifted 3.4 million children out of poverty. That number would have been even greater — as high as 7 million children — if lawmakers had renewed the historic 2021 improvements to the CTC, according to Columbia University’s Center on Poverty and Social Policy. 

The House reconciliation bill goes in the opposite direction. The bill would make permanent tax cuts benefiting the ultra- wealthy, including a boost to the estate tax exemption and the increase in the business passthrough deduction while also extending the weakened alternative minimum tax. The measure also would revive a trio of business deductions and together all these tax policies account for over 60% of the measure’s overall $3.8 trillion estimate of lost revenue through 2025-2034.

The tax provisions in the reconciliation bill represent a massive giveaway to the richest Americans. Under the bill, in 2026, the bottom 20% of earners (annual income below $27,000) would receive only 1% of tax savings (about $140) while the top 1% of earners (annual income above $900,000) would receive 21% of the tax breaks, amounting to an average tax break of nearly $70,000. The fact that the wealthiest will get permanent tax cuts while families with the lowest incomes will have their taxes increase over time — and will lose access to basic needs programs — threatens the future of millions of kids.

In addition, although the CTC maximum is increased from $2,000 to $2,500, the reconciliation bill simultaneously leaves behind 20 million children whose parents make too little to qualify for the full CTC. It also disqualifies 4.5 million U.S. citizen babies and children because their parents don’t have a Social Security number. Millions of other children will be hurt by changes to the EITC. Despite an overwhelming body of literature documenting that expanding the CTC is one of the best ways to help families with rising costs, this bill sharply limits who can access the credit and how much of it they can claim. 

A more unequal CTC

This budget bill prevents 20 million of the nation’s poorest kids from receiving the full credit — 2.5 million more low-income kids than previously. Right now, 17 million kids — one-in-four — are excluded from the full $2,000 CTC because their family income is too low. Instead of righting this wrong, the reconciliation provisions would increase the maximum CTC from $2,000 to $2,500 but leave in place the inequitable cap on the credit’s refundable portion. Meanwhile, families earning up to $400,000 would qualify for a larger credit. This change will widen the gap between families who are well-off and those who are struggling to provide basic, everyday needs for their children.

Children who will be disproportionately “left behind” by this bill are: babies and toddlers; children in larger families; rural children; children of color; and children in single-parent households. The bill punishes babies and mothers who lose income with a reduced credit when mothers earnings decrease during pregnancy, childbirth, and postpartum, when a child and family are vicitms of a natural disaster, when a child loses a parent due to death, when a parent reduces work to provide caregiving, or when a parent loses a job. For children and families who need the CTC the most, they get the least.

The CTC proposal also strips eligibility from 4.5 million American children because they live in households with mixed immigration status.. The poverty rate among U.S. citizen children in mixed-status families is 31.5% — more than three times that of citizen children in households where all members are citizens. The 2017 Tax Cuts and Jobs Act (TCJA), passed during the first Trump Administration, began denying the CTC to 1 million kids who did not have Social Security numbers.. Under the proposed tax provisions currently being considered, an additional 4.5 million kids, who have social security numbers, are US citizens or lawful permanent residents, and live with a parent without a social security number, would lose access to the credit, forcing many low-income families into, or deeper into, poverty. 

Hurdles to the EITC

The reconciliation bill also erects hurdles to the EITC, which has a long history of bipartisan support and a proven track record of lifting up working families. Research shows that families mostly use the credit to pay for basic needs such as groceries, rent, clothing, and school supplies. In 2023, the EITC kept 4 million people out of poverty as the poverty rate for children jumped to nearly 10 million from 3.8 million in 2021. Evidence has shown that the credit also produces significant lifetime benefits, such as better education outcomes, improved health, and higher lifetime earnings and a more secure retirement. 

Barriers to credit for health care premiums 

The Advance Premium Tax Credit (APTC) is a refundable tax credit available to families purchasing health care through the Affordable Care Act’s health insurance Marketplace, helping lower their monthly premium costs. In 2024, consumers eligible for a tax credit experienced an average yearly premium savings of approximately $700 due to enhanced premium tax credits, yet lawmakers did not extend them in the bill. A record 93% of Marketplace enrollees, or 19.3 million people, receive APTCs. Failure to renew this enhanced tax credit will raise health care costs for many families with children.

Education

Lawmakers have included in the reconciliation bill a version of the “Educational Choice for Children Act,” which would create a federal private school voucher program. School vouchers hurt students and schools by diverting public funds to private schools, discriminating freely against students, and not improving academic outcomes. School voucher programs are disproportionately harmful for students with disabilities. Voters continue to oppose private school voucher schemes: Every time one has come up for a vote, Republican, Democratic, and Independent voters have soundly rejected them.

While legislators claim vouchers help kids, they actually just benefit the wealthy. The bill provides an opportunity to avoid capital gains taxes by allowing donations of “marketable securities.” This provision would allow individuals to donate their appreciated corporate stocks and avoid paying capital gains tax on the appreciation, while also receiving a federal tax credit for the full market value of the donation. According to the Institute on Taxation and Economic Policy, this provision could lead to a “120 percent match or more for upper-income families” and disproportionately benefit wealthy Americans, while decreasing funding in state and federal budgets. In addition to the lost capital gains revenue, this would spend $5 billion a year in taxpayer funds, totaling $20 billion over a four-year period.

Environment

The reconciliation bill would claw back up to $16 million in grants from the Inflation Reduction Act to reduce air pollution and monitor and improve indoor air quality in schools. This provision would disproportionately affect children and schools in low-income, disadvantaged, and tribal communities who routinely report higher instances of asthma, lead poisoning, and obesity. 

Children are uniquely vulnerable to pollutants as they breathe more air in relation to their body weight than adults. A mountain of evidence suggests that properly managing indoor air quality in schools leads to better academic performance and attendance, protects children from airborne illnesses like COVID-19, and makes school buildings last longer while saving money. Estimates show that 57 million people attend or work in schools across the country and the reconciliation bill would put the air they breathe at risk. 

The post How the House-Passed Budget Reconciliation Bill Would Negatively Impact Children appeared first on First Focus on Children.

All children deserve to live happy, fulfilling lives. This means that all children should have their immediate health and safety needs met, and no child should be denied the chance for a bright future based on their family’s hardship.

Our country is failing our children in this regard. Child poverty is on the rise in the United States as households with children struggle with the high cost of food, rent, and other household expenses. The tax code offers one of the strongest tools for improving the lives of children by providing credits, deductions, and asset-building tools that reduce child poverty and promote family economic mobility.

According to First Focus on Children’s annual budget analysis, the Child Tax Credit, the Earned Income Tax Credit (EITC), and the Child and Dependent Care Tax Credit (CDCTC) are among the top 20 programs contributing to children’s spending in the federal budget. In FY 2022, when tax filers had access to the EITC and a fully refundable CTC and CDCTC, mandatory spending for the three credits accounted for nearly 28% of the share of federal investments in children.

In 2023, the refundable portion of the Child Tax Credit kept 1.34 million children out of poverty. This impact is significant but would have been even greater if the improvements made to the CTC in 2021 under the American Rescue Plan Act (ARPA) were still in place. Columbia University’s Center on Poverty and Social Policy found that if the ARPA improvements had continued in 2023, an additional 3.6 million children would have been spared poverty.

Currently, one-quarter of children in the United States live in families that don’t earn enough to qualify for the full $2,000 Child Tax Credit. Significant percentages of these children live in large families or rural communities. Children of color are also disproportionately left out, as are babies, whose mothers are more likely to be in and out of the workforce because of complications in pregnancy, labor and delivery, postpartum health issues, lack of paid family medical leave, and other reasons. Other examples of children left behind are those whose parents have passed away or who are victims of natural disasters.

The majority of adults caring for children work outside the home but many still struggle to make ends meet because wages for low-wage workers have not kept up with inflation. Parents and caregivers need reliable income to provide nutritious food, health care, diapers, school supplies, and other resources that improve their children’s development and achievement. The high cost of raising young children makes it more likely that families with babies will slide into poverty. The cost of full-time, center-based care for infants — which exceeds the price of in-state college tuition in most states — means that families can spend more than 10% of their income on child care alone. The high cost of raising kids continues through childhood: On average it costs more than $300,000 to raise one child from birth to age 18 (not including college).

Enhancing tax credits such as the Child Tax Credit, Earned Income Tax Credit, and Child and Dependent Care Tax Credit not only helps individual children and their families, but also benefits our country as a whole.

For example, improving the Child Tax Credit can strengthen local economies — the Niskanen Center found that extending the expanded Child Tax Credit for just one year would support the equivalent of 500,000 private-sector jobs.

The United States tax code is the government’s primary means of raising revenue to support a wide range of government functions, including the operation of numerous programs and services that benefit children and families throughout the country and abroad. Historically, the individual income tax has generated the most revenue. According to the Congressional Research Service, in FY 2021 the individual income tax contributed $2.0 trillion, or 50.5% of the federal government’s revenue. The corporate income tax contributed notably less, generating $212 billion in FY 2021, or 9.2% of total revenue.

Investing in children is one of the most cost-effective and impactful ways to shore up the nation’s future. Research shows that investments in children yield immense returns, not just for their lives but for the nation as a whole. Yet, our 2024 Children’s Budget finds that the share of U.S. federal spending on children fell to 8.87% in FY 2024, representing the third straight year of decline. Both mandatory and discretionary spending for children fell in FY 2024 as a share of the federal budget. Adjusted for inflation, U.S. investment in children declined nearly 6% from FY 2023. Our Babies in the Budget 2024 analysis shows that the federal share of spending on infants and toddlers is an alarmingly low 1.52%. This disinvestment in children isn’t just about numbers — it has realworld consequences for millions of young people. As federal support dwindles, children face increased risk to their health, well-being and future. Early in the 119th Congress, harmful cuts and policy changes have already been proposed to reduce our deficit and support tax reforms skewed toward the ultra-wealthy.

An approach to build a fairer tax code that includes revenue raisers could help to address our nation’s racial, gender, and economic inequities, which disproportionately affect children, and finance greater investment in our children and their families. In a report released in January 2025, the Treasury Department’s Office of Tax Analysis found that extending the expiring individual and estate tax provisions of the 2017 tax law would cost $4.2 trillion between 2026 and 2035, and the largest tax cuts would go to the highest-income families. More recently, an April 3, 2025, Joint Committee on Taxation analysis estimates the cost of extending the 2017 tax law at $5.5 trillion over ten years. This is money that research shows would be better spent on children. As lawmakers debate tax policy, they should raise more revenue from the wealthiest people and corporations to help support much-needed investments in our children, offset the extension or expansion of tax cuts under consideration, improve our fiscal outlook, and strengthen our economy. 

The Opportunity

Reforming tax policies to better support families and children is critical to building a more equitable society. Through reforms outlined below, these tax credits, deductions, savings accounts and other opportunities in the tax code would provide financial stability for families and lift millions of children out of poverty. First Focus on Children supports comprehensive tax reform. The policy recommendations below are divided into three sections: (1) Strengthen Tax Credits and Deductions, (2) Savings Accounts and Asset Building, and (3) Internal Revenue Service (IRS) Funding and Customer Services. These recommended tax strategies should not replace existing programs that provide direct assistance to support children’s health and well-being, and we would be remiss if we didn’t acknowledge that tax deductions and savings accounts typically favor high-income families, while refundable tax credits and investments in direct-support programs better meet the needs of low-income families. We also acknowledge the provisions included in this paper are not an exhaustive list of the parts of the tax code that benefit children and their families. This paper mostly focuses on tax policies that go directly to households with children, which have the largest impact on improving the lives of lower-income children.

Reforms to the tax code are a powerful way to develop a comprehensive policy approach to provide the best outcomes for children and families, especially those who face the biggest barriers to economic mobility. As Congress heads toward intense debates around extending provisions of the 2017 tax law, lawmakers must prioritize reforms that help struggling families meet basic living expenses, reduce child poverty, and promote economic mobility. The Child Tax Credit and Earned Income Tax Credit have been shown to deliver a tremendous return on investment, helping improve near- and long-term outcomes for children and making our country stronger.

The post Child And Family Tax Policy: Improving Lives appeared first on First Focus on Children.

Key members of Congress today introduced a bill that would permanently increase the amount of the Child Tax Credit and deliver it to families monthly, measures that would help children and their families manage the pressure of rising prices for food, rent, and other basic needs.

The American Family Act, introduced today by Rep. Rosa DeLauro (D-CT) and Sen. Michael Bennet (D-CO) along with more than 200 cosponsors, would offer families a tax credit of up to $4,320 per child for young children and $3,600 for children ages 6-17. The legislation also would allow families to receive the credit monthly — which is how most households pay bills — and would extend it to the 17 million children currently left behind because their parents make too littleto qualify. Similar measures helped lift 3 million children out of poverty during the COVID-19 pandemic and supported families through the financial strain of that emergency. The American Family Act also establishes a “baby bonus,” which could push the total credit to $6,360 in a child’s first year of life.

“The American Family Act delivers relief to America’s struggling children and families,” said Bruce Lesley, president of First Focus Campaign for Children. “The bill’s expanded, monthly Child Tax Credit will help lift children out of poverty and ensure that they have the food, diapers, clothing, education, stable housing and other basics they need to thrive. The bill also eliminates a grievous discrimination against 17 million of America’s babies and children currently left behind because their parents make too little to claim it — a ridiculous and poverty-promoting policy. Many of these children are the ones who need it the most — they are kids whose moms lose income due to having a baby, or have a parent who is sick, disabled, or deceased or has been laid off, or those who have suffered through a natural disaster.

We are grateful to Sen. Bennet, Reps. DeLauro, Suzan DelBene (D-WA), Richie Torres (D-NY), and the other lawmakers who have put these children and all of the nation’s kids first. The American Family Act offers a rare bright spot — and a necessary antidote — to the disastrous cuts Congress has proposed to children’s programs so they can fund more and bigger tax breaks for the ultra-wealthy.”

The improvements made to the Child Tax Credit during the COVID-19 pandemic demonstrated their ability to lift children out of poverty and also to support families in a way that more closely aligns to their needs and spending habits.

In 2021, the United States cut child poverty nearly in half largely due to improvements to the Child Tax Credit that delivered monthly cash payments to children most in need. The expiration of these improvements — and in particular their reach to the poorest children — has sent millions of children back into poverty and deprived millions more of the basic resources they need to thrive.

The pandemic-era improvements, now applied in the American Family Act, also narrowed the poverty gap between Black and white children, and Hispanic and white children. When these provisions expired, the impact disproportionately hit Black and Hispanic children, as well as young children, children in rural communities, and children in larger families.

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Excerpt from the letter:

The proposed budget cuts would have a disproportionate impact on the communities you represent. According to data from the Georgetown University Center for Children and Families, a significant percentage of children in your districts rely on Medicaid and CHIP for their healthcare needs.

Read the full letter here.

The post Letter: Protecting Medicaid and CHIP for America’s Children appeared first on First Focus on Children.

As families struggle with high rents, unaffordable child care, and the steep cost of everyday goods such as food and diapers, key assistance programs exist to supplement resources for families struggling to make ends meet. 

Weakening these assistance programs by imposing work requirements, funding cuts, unreasonable time limits, and other unnecessary bureaucratic barriers undermines access to benefits for low-income children and undercuts their opportunities. These actions often hurt children and youth with the greatest need, creating categories of deservedness that negatively impact their well-being and harm their short-term and long-term success.  Holding children back in this way has adverse consequences for our economy and doesn’t reflect the values of our nation. 

Rather than fostering economic mobility, work requirements often prevent parents and caretakers from accessing assistance programs and support, hindering healthy child development and putting additional burdens on struggling families. A 2019 nonpartisan study from the National Academy of Sciences found that “work requirements are at least as likely to increase as to decrease poverty.”2 

There are countless situations where work requirements punish children who live in families that face barriers to financial security or experience a disruption in income through no fault of their own. Just a few examples include children of parents with disabilities or siblings of children with disabilities, whose parents can only work part-time or who are forced to quit to care for their kids. These requirements can also affect children being cared for by grandparents on fixed incomes who are physically unable to work or children who have a parent with cancer or another serious medical condition that prevents them from working. Children in households that lose their home, job, or both due to a natural disaster, such as the recent hurricane in North Carolina or wildfires in California may also lose access. Work requirements also do not account for uncompensated childrearing and caretaking of family members, which is work that produces large benefits to the country as a whole. 

The reality is that the vast majority of households with children (92%) have at least one family member who is working.3 Rather than encouraging employment and upward mobility, work requirements just force families to document their existing employment, which is especially onerous for low-wage workers who often have no control over their schedules and whose hours may vary from week to week.4 Certain employers may be unwilling to provide a letter of employment verification. Furthermore, some parents are self-employed or may not have an employer easily available to verify their employment. 

To meet work requirements, caretakers often must find and pay for child care, which is already unaffordable and difficult to find. In 2023, the cost to a family of child care for two children in a child care center was more than annual mortgage payments in 45 states and the District of Columbia, and that cost was more than rent payments in all 50 states and the District of Columbia. The cost of child care for an infant at a center was more than in-state tuition at a public university in 39 states and D.C..5 Black, Hispanic, and low-income working parents find child care least affordable and accessible.6 

The racist roots of work requirements for benefit programs extend far back into our nation’s history, starting with the slave trade and continuing today, as racist stereotypes persist about the willingness of Black people and other people of color to work.7 For example, policymakers specifically designed the Temporary Assistance for Needy Families (TANF) program, which replaced Aid to Families with Dependent Children (AFDC) in 1996, to limit assistance to Black mothers and children. TANF places extremely arduous administrative burdens on participants, such as strict work requirements, family caps, and time limits, and provides meager cash assistance in many places. Nearly 30 years of evidence show that TANF’s work requirements have failed to improve employment outcomes for program participants, and it should not be a model for other assistance programs.8 

Some members of Congress are once again considering the imposition of work requirements,  funding cuts, and other harmful changes to assistance programs such as Medicaid and the Supplemental Nutrition Assistance Program (SNAP) that would have significant negative ramifications for children’s health and future success. When parents lose benefits, evidence shows that children do too, making policies such as these harmful to children’s health and development.9 Taking SNAP benefits away from adults results in fewer SNAP benefits for their entire household, meaning less food for children. Even proposals that claim to exempt families with children and only impact “Able-Bodied Adults Without Dependents (ABAWDs)” still harm children, who often depend on pooled resources such as SNAP benefits from family members who do not claim them as dependents.

We already underinvest in our children. As First Focus on Children’s annual Children’s Budget shows, children do not receive their fair share of government funds.10 Despite this inequity, programs that benefit children are at risk of deep cuts in Fiscal Year 2025, which would have grave consequences. For example, cuts to early learning programs would unfairly harm low-income children, who show positive, on-time post-secondary educational outcomes as a result of these programs, as well as improved cognitive development, emotional development, and academic achievement.11,12 As lawmakers negotiate spending levels for the FY 2025 budget, they must protect children’s programs along with those that benefit low-income seniors and adults. 

This document is an update to our 2023 and 2018 briefs, The Harmful Consequences of Work Requirements and Other Obstacles on Families with Children,13 and details the way work requirements would weaken assistance programs by increasing disparities for children in marginalized communities and undermining child health, nutrition, housing stability, economic security, and early childhood development. 

Child Health 

Medicaid and the Children’s Health Insurance Program (CHIP) cover more than 91 million  Americans, including children, pregnant women, seniors, individuals with disabilities, and low-income adults in the United States.14 Children account for more than 41 million Medicaid and CHIP enrollees.15 Imposing work requirements as a condition of receiving Medicaid harms children, pregnant women, and families and creates substantial losses in health coverage and access to care. Past implementation of work requirements has demonstrated that confusing rules, complex reporting systems, and other bureaucratic red tape cause children to lose their health coverage. For example, in Arkansas, 18,000 Medicaid enrollees lost their coverage within the first seven months of the state implementing work requirements before a court order halted the program.16 When parents lose benefits, evidence shows that children do too, making policies such as these harmful to children’s health and development.17 Moreover, the ramifications of losing coverage extend beyond health care to negatively impact financial security, employment, housing, and many other life factors for children. 

Imposing work requirements would exacerbate the loss of coverage that children have already experienced over the last two years as states ended continuous coverage protections established during the COVID-19 pandemic. From March 2020 until April 2023, states had been required to maintain enrollment of children and other individuals covered by Medicaid and CHIP.18 The pandemic-era requirement led to significant health coverage gains for children, driving the uninsurance rate for children down to 5.4%.19 Starting April 1, 2023, states were allowed to begin “unwinding” these protections and disenrolling children from Medicaid and CHIP.20 During the Medicaid unwinding, over 5.5 million children were disenrolled.21 The vast majority of these children were disenrolled for procedural issues — missing renewal forms, confusing notices, materials that are not in preferred languages, and other administrative errors —  rather than for actual determinations of ineligibility.22 Making families jump through additional bureaucratic hoops by imposing work requirements would cause even more eligible children to lose their Medicaid and CHIP coverage. 

When children lose coverage they lose access to critical health services, including Medicaid’s  Early Periodic Screening, Diagnostic and Treatment (EPSDT) benefit. EPSDT guarantees that children under age 21 have access to a comprehensive set of benefits that ensures they receive appropriate preventive, dental, mental health, developmental, and specialty services. Losing access to EPSDT would be harmful to children, especially those with special health care needs as Medicaid and CHIP serve as the sole source of coverage for more than 47% of such children.23 Losing coverage also impacts long-term outcomes for kids. Children covered by Medicaid during childhood have better health as adults with fewer hospitalizations and emergency room visits,24 are more likely to graduate high school and college,25 have higher wages and pay more in taxes.26 Causing families to lose health coverage by imposing work requirements risks the short-and long-term health and development of our nation’s children. 

Child Food Security and Nutrition

As the nation’s largest federal food assistance program, SNAP is the first line of defense against hunger and food insecurity for low-income children. More than 15 million children —  representing close to 40% of the program’s participants — rely on SNAP for consistent, healthy meals.27 In 2023, SNAP lifted more than 1.3 million children out of poverty,28 and countless studies show that SNAP participation improves food security, health, educational, and long-term economic outcomes for children.29 However, despite its proven effectiveness, SNAP is under threat from legislative proposals that will make it harder for low-income families and families experiencing poverty to put food on the table. 

The upcoming spending bills and Farm Bill negotiations will provide lawmakers an opportunity to impact funding and reauthorize nutrition programs, including SNAP. Some House lawmakers have suggested expanding SNAP’s work requirements to include parents and caretakers with school-age children (age 7-18),30 which could cause 4 million children to see reduced SNAP benefits.31 

Even if children’s SNAP benefits are not directly affected, work requirements could reduce the household’s overall SNAP benefits leading to less money for groceries when prices are on the rise, and ultimately diminishing the amount of food the household has to share with children. Parents and caretakers in some states could also face new restrictions on SNAP time limits,32 which were suspended during the pandemic, a change that will make retaining SNAP even harder for individuals struggling to find adequate employment. 

Proposals to increase SNAP restrictions for ABAWDs also unduly harm children in poverty. Children often depend on pooled resources (including SNAP benefits) from extended family members who do not claim them as dependents, such as a grandparent who watches children after school or a non-custodial parent. Stricter ABAWD time limits would also harm youth aging out of foster care and unaccompanied homeless youth over the age of 18, who already experience high rates of unemployment and poverty and face barriers to accessing public assistance programs.33 

Taking food off the table does not help families achieve economic mobility. Instead, lawmakers should pursue the wide variety of available policies that would strengthen and protect SNAP so that it can more effectively meet the needs of families who don’t have enough to eat. These policies include maintaining the increase in SNAP benefits from the recent update to the Thrifty Food Plan to better reflect modern food costs, making it easier for families to gain SNAP eligibility by limiting burdensome administrative requirements, protecting and replacing SNAP benefits for those who experienced ‘card skimming’, investing in nutrition education for SNAP participants, and ensuring vulnerable youth and young adults have access to food assistance.34 

Child Housing Stability 

Housing vouchers provide proven long-term benefits for children, including an increase in their earnings as adults.35 More than half of nondisabled, working-age households receiving rental assistance have at least one family member who is already working but still struggle to afford the high cost of rent.36 

Yet access to vouchers and other forms of housing assistance remains extremely limited and families with children are a decreasing share of subsidized housing recipients.37 Affordable housing remains one of the main barriers to economic stability for many families. One-third of all U.S. children live in households with a high housing cost burden,38 defined as spending more than 30% of the household’s monthly income on housing.  

Housing instability and homelessness are associated with an increased risk of poor child health,39 and cause trauma with severe negative implications for children’s healthy development. Child and youth homelessness is already high, with more than 1.4 million students identified as homeless by the U.S. Department of Education in the 2022-2023 school year.40 

Project 2025 proposes harmful changes that would further limit housing assistance for families with children, such as work requirements and time limits. Instead, lawmakers should expand access to vouchers for families with children, establish a national renters tax credit, reform federal homelessness assistance, expand access to civil legal services for families facing eviction and other housing disputes, and build upon partnerships between public housing authorities and public school systems designed to improve the educational outcomes of children living in subsidized housing.41 

Temporary Assistance for Needy Families (TANF)

TANF provides critical assistance to millions of children and families, through cash assistance as well as funding for child care, state tax credits, food banks, and other aid. TANF is a children’s program — more than 70% of TANF recipients are children.42 

While TANF cash assistance is a lifeline for struggling households — helping parents and caretakers afford food, rent, diapers, and other staples — it fails to reach many kids in need. Currently, fewer than 2 million children receive TANF basic assistance even though nearly 10 million children in the U.S. are living in poverty.

TANF has not received an increase in federal funding since its creation in 1996. As a fixed block grant, it is not indexed to inflation and therefore its value has decreased over time. TANF funding also does not automatically increase to meet greater need during times of economic crisis. 

House Republicans have proposed43 to further limit access to TANF through significant funding cuts and stricter work requirements. TANF’s rules already allow state officials to set narrow parameters for program eligibility and impose strict work requirements and arduous administrative burdens on program participation. The proposed cuts would eliminate the Contingency Fund, designed to respond during times of economic downturn, which would hurt families when they are in most need of support. In FY 2024, 15 states and the District of Columbia received TANF Contingency funds.44 

Instead, lawmakers should reform the TANF program and increase families’ access to cash assistance.45 Cash assistance has a two-generation effect in promoting economic mobility — in addition to supporting children, the assistance helps adults in the household afford child care, transportation to work, higher education, or job training programs that lead to steady employment and higher-paying jobs.

Child Tax Credit 

Extensive research shows that tax credits and cash transfers influence positive parent-child interactions, improve child development outcomes, and have a bigger impact than any other policy in reducing child poverty.46 The improvements to the Child Tax Credit in 2021 delivered dramatic, positive results, cutting U.S. child poverty nearly in half and narrowing the racial child poverty gap.47 It is hard to overstate the impact of the Child Tax Credit — the payments transformed the lives of tens of millions of children. 

Improvements to the Child Tax Credit greatly increased the amount of the credit, made payments available monthly for half of the year, and made children in families with little or no income eligible for the full credit for the first time. Analysis from Columbia University’s Center on Poverty and Social Policy found that children in the lowest income households who were ineligible for the Child Tax Credit before the 2021 enhancements — mainly Black and Hispanic children, young children, and children in single-parent, rural or large families — all experienced significant declines in child poverty in 2021.48 

Expanding the Child Tax Credit also significantly reduced material hardship and household food  insecurity with “no significant differences in the changes in employment between December  2020 and December 2021 for adults who received the payments and adults who did not receive  the payments.”49 In fact, the Child Tax Credit helps mothers, especially single mothers, increase their labor force participation50 by allowing them to afford child care, transportation, and other necessities that make it possible for them to work. 

With the expiration of the improvements to the Child Tax Credit at the end of 2021, nearly 4 million children immediately fell back into poverty in January 2022.51 By July 2022, the percentage of households with children that reported they could not afford enough food had increased by 25%.52  

The lesson of 2021 tells us that a monthly Child Tax Credit delivered to families without any employment or earnings requirements ensures a steady source of income that offers the best way to help children in need. Creating a fully refundable Child Tax Credit helped cut the child poverty rate in half and achieved a historic low. Congress must build on the success of the 2021 improvements and create a permanent, monthly child allowance program designed to reach all children in households with the greatest barriers to economic stability. 

Stability For Unaccompanied Homeless Youth and Youth Aging Out Of  Foster Care 

The transition to adulthood is always difficult, but it is even harder for unaccompanied homeless youth and youth aging out of the foster care system, who usually have little or no support to help them navigate higher education, housing, and employment.53  

Youth in foster care and unaccompanied homeless youth disproportionately experience significant barriers to obtaining a high school diploma, entering college, obtaining a driver’s license, accessing health insurance, maintaining housing stability, and obtaining steady employment. Surveys have found high rates of homelessness and hunger among college students, especially among community college students,54 and a disproportionate number of these students are former foster youth. Recognizing these barriers, the vast majority of states allow for the extension of foster care through age 21,55 and other states have extended services to support these young people as they age out of care. In addition, states have passed laws to support college students experiencing homelessness,56 but more needs to be done.57 

Medicaid and SNAP help youth obtain critical health care and nutritional support, and access to these and other programs allows foster youth, former foster youth, and unaccompanied homeless youth to continue their education and pursue a path to self-sufficiency and economic mobility. In 2014, the Affordable Care Act extended Medicaid eligibility for youth formerly in the foster care system up to age 26. This extension created parity of coverage between former foster youth and non-foster youth, who are eligible to stay on their parent’s insurance until age 26. Unaccompanied homeless youth have also been able to enroll in health care, including Medicaid, under the ACA. Access to health coverage is vital to young people who have experienced trauma due to abuse and neglect. Due to their experiences, youth in care often have significant physical and mental health care needs.58 

Imposing mandatory Medicaid work requirements on childless adults will hurt foster youth, former foster youth, and unaccompanied homeless youth who already face significant barriers in their transition to adulthood. Students enrolled full-time in higher education classes will be burdened with trying to afford health care in addition to their studies. Imposing work requirements on foster youth and unaccompanied homeless youth for them to continue receiving health care undermines their ability to complete high school and attend college, and to secure housing and other necessities that set them up to succeed in the workforce.

Similarly, SNAP plays a significant role in the health and well-being of youth aging out of care and unaccompanied homeless youth with no support systems. Former foster youth often experience poor nutrition and food insecurity, and SNAP benefits help address this problem and increase the likelihood of healthy adult outcomes. Expanding and increasing work requirements to receive nutrition assistance will undermine the ability of these young people to survive and will exacerbate the unhealthy levels of stress they already feel. 

Policymakers must support these young people by extending the improvements made to the Earned Income Tax Credit (EITC) in 2021, which nearly tripled the amount of the credit for low-income workers and allowed foster and homeless youth to access the EITC starting at age 18 even while they were full-time students. Renewing these improvements would benefit many transition-age youth and prevent millions of low-wage, childless workers from being taxed into poverty. 

Conclusion

Every child should have a fair chance to thrive. Policies such as work requirements that limit access to health care and effective anti-poverty programs will impair the physical and mental health, nutrition, and educational success of the next generation. Policymakers must build on what works and promote policies that ensure that every child has access to health care, proper nutrition, stable housing, child care, and enough resources to support their healthy development. 

For additional information, please contact:  

Cara Baldari, VP of Family Economics, Housing, and Homelessness Policy,Carab@firstfocus.org 

Michelle Dallafior, Senior VP of Budget and Tax Policy, Michelled@firstfocus.org 

Abuko Estrada, VP of Medicaid and Child Health Policy, Abukoe@firstfocus.org Averi Pakulis, VP of Early Childhood and Public Health Policy, Averip@firstfocus.org

Please see the attachment for a full list of citations and endnotes.

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