Federal COVID Relief – What it Means for Children

by Pete Nabozny, Director of Policy, The Children’s Agenda

The Biden Administration and Congress have targeted early March as the completion date for the next round of federal COVID relief funding. The Children’s Agenda and allied organizations are paying close attention to the emerging deal in Washington DC, and are working with child advocacy organizations around the country to ensure that children are prioritized in any comprehensive federal agreement.

This next round of federal COVID relief will likely pass under budget reconciliation rules. This option, which is not subject to a filibuster, requires an extensive committee mark-up and amendment process in both the House of Representatives and the Senate before Congress can send the bill to the President. Please refer to the summary for important components of the emerging agreement that would benefit children in Monroe County and New York State.

Summary

• February 25-27: House expected to vote.
• March 2-5:Senate takes up legislation, possibly amends it before a vote.
• March 8-12: House votes again if Senate makes changes

How COVID Relief Affects Children

• Child Tax Credit – Increase the per-child credit to a maximum of $3,000 for children 6 to 17, and increase it to $3,600 for children under 6 years old (up from $2,000 per child). The emerging deal would make the credit fully refundable and eliminate any income phase-ins, ensuring that low-income families can receive the full credit amount. The IRS would also be instructed to establish a process to disburse a portion of the credit to families monthly. While this enhanced credit would only be established for one year as a component of this deal, congressional leaders and the Biden Administration hope to make the credit permanent as part of the FY 2022.
• Child Care –$39 billion in COVID relief funding to states to support their child care industries. If the agreement follows the formula used in prior rounds of funding, New York State would receive $1.8 billion from this round of funding. The House Ways and Means Committee also included additional baseline funding for child care that would presumably continue in future years.
• Economic Impact Payments – Households meeting income eligibility thresholds would receive another stimulus payment of $1,400 per household member (including children).
• Schools – $130 billion to help schools implement Center for Disease Control recommendations to safely re-open and operate. A portion of these funds would be designated to help address learning loss. If prior rounds of funding to New York State are a guide, the state would receive up to $9.6 billion in funding for schools.
• Unemployment Benefits – Extend the enhanced unemployment benefits through August 2021 and increase the federal weekly supplemental unemployment benefit from $300 to $400 per week.
• Other Important Provisions – $350 million for child welfare services, $150 million to Maternal, Infant, and Early Childhood Home Visiting Program (MIECHV), $4.5 billion for the Low Income Home Energy Assistance Program (LIHEAP), $800 million for WIC, and $1 billion for Head Start.

Taken together, these actions would represent a historic, once in a lifetime, commitment to increasing federal funding for programs that serve low-income families with children. A recent estimate from Columbia University’s Center on Poverty and Social Policy concluded that this relief bill would cut child poverty in half in 2021, with especially large percentage reductions for Black and Hispanic households.

This influx of federal dollars for child care could also allow New York State to provide significant financial relief to child care providers who have experienced deep revenue declines throughout the past year and begin implementing the ambitious recommendations recently developed by the state’s Child Care Availability Task Force. This federal funding could help transform the state’s child care industry by making child care affordable and accessible to families of all income levels and increasing compensation for the sector’s workforce.

The emerging federal relief deal has the potential to substantially improve the lives of thousands of children and families in our community. The Children’s Agenda will continue to monitor the federal legislative picture and work with partners in our community and throughout the country to ensure that children are prioritized in the final agreement.