3.7 million kids slipped back into poverty after the Biden child tax credit expired — and Congress isn't restoring it soon

• Child poverty surged in January after the expanded child tax credit expired last year.
• The end of the direct payment program wiped out the temporary gains made to slash child poverty.

Child poverty surged in January after the end of President Joe Biden's child allowance, according to new data released on Thursday.

An analysis from the Center on Poverty and Social Policy at Columbia University indicated that 3.7 million kids fell back into poverty once the expanded child tax credit ended last year. The child poverty rate rose to 17% in January from 12% in December — a 41% increase.

It virtually wiped out all the program's gains in slashing the number of children living in poverty, elevating the rate back to where it stood at the end of 2020. Black and Latino kids experienced the largest percentage point increases, the study found.

"It did a lot of good for poverty reduction and reductions in food hardship," Zachary Parolin, a co-author of the study, told Insider. "Now that the program's expired, we're going to lose a lot of those gains unless we see some rapid labor market recoveries in the very near future."

Parolin added families may have more trouble being able to afford food in the next few months, particularly at a time of rising grocery prices. Inflation has recently hit a four-decade high, and Parolin says the benefit could provide another financial buffer for families.

Other authors of the analysis included Sophie Collyer and Megan Curran of Columbia University.

Congressional Democrats established the child allowance last March under the Biden stimulus law. They transformed the child tax credit into a one-year, near-universal cash benefit for families, widening eligibility to households with little or no taxable income for the first time. Families could receive $250 per kid age 6 to 17 or $300 for each child age 5 and under.

The program's price tag stood at $120 billion for the year, per the Joint Committee on Taxation — or about one-sixth of what the United States will spend on defense in 2022.

Democrats had championed the credit as an expansion of the safety net for children similar to what Social Security achieved for seniors in the 20th century. They included a four-year renewal of the benefit in the House-approved Build Back Better plan, and the vast majority of Democrats were onboard.

But the party encountered resistance from Sen. Joe Manchin of West Virginia, a conservative Democrat who eventually torpedoed the House bill at least in part due to the child tax credit. He's expressed a wide range of concerns including whether the program could dissuade families from work and if the money could be spent on drugs.

Manchin has also been a longtime skeptic of the federal government issuing direct payments with no strings attached. He's pushed to reinstate a work requirement on the program, a step that experts say would cut out the poorest families from getting the federal assistance and dent its anti-poverty effects.

There's little sign that the program will be reinstated soon since Republicans unanimously oppose the Biden spending plan, which has run aground in the evenly-divided Senate. Democrats also can't pass the economic package on party-lines in the upper chamber without a green light from Manchin.

For now, Congress has moved on to other priorities and its unclear when, or if the plan will be on the agenda again. Rep. Alexandria Ocasio-Cortez leveled a thinly-veiled attack on Manchin for "nuking" the program on Thursday evening.

However, a bipartisan bargain could be in the cards. Sen. Michael Bennet of Colorado, an advocate for the program, recently told Insider that he speaks "all the time" with Sen. Mitt Romney of Utah. It's not immediately clear whether those discussions are aimed at restoring a child allowance.

Romney authored a competing child benefit program that would provide even larger checks to families. He's cracked the door open to a bipartisan deal in the future, and Romney says he's open to negotiate on reviving some form of the program once Democrats settle on the fate of their economic agenda.