Treasury Secretary Janet Yellen is making efforts to permanently distribute child tax credit, NPR reports.
Despite considering the significant help the change would bring to parents, critics worry the financial burden of the plan would result in more harm than good.
"It's a very important program that will do a huge amount to relieve child poverty, which has been a tremendously important problem in the United States," Yellen told NPR.
The first installment of the child tax credit went out last week and totaled $15 billion. The credit, passed by Congress in March, gives families $250 or $300 per child depending on the age of the child, NPR reports. In addition to the partial financial aid, the American Rescue plan also increased the yearly child tax credit from $2,000 per child to $3,000, except for children under six, whose guardians now receive a $3,600 credit.
"We do want to make sure that every child that's eligible to receive this tax credit — a very important source of support — will know about it and be able to get it," Yellen said.
President Biden has suggested a larger credit through 2025, which could drive tax prices to be approximately $100 billion per year. According to NPR, the president proposes using the wealthy population’s taxes to cover the increasing costs.
Critics, however, worry about the dangers the resulting debt can have on the country’s economy, adding that the credit’s permanency could lead to an overwhelmingly large percentage of inflation. Yellen believes a combination of the economy’s restoration amid the ongoing pandemic, increases in product consumption, and the distribution of the vaccine will keep inflation from surging over the roof.
“@SecYellen needs to kick back & relax at the bridge club. First she was confused & outspoken on crypto,” Brett Kokinadis, 2nd Vice-Chair Santa Fe Republican Party, wrote in a tweet. “Now she essentially wants to support #UBI. It's time to make way for younger blood and consider retirement - you're lost & we're broke.”
After the Labor Department saw 5.4% higher consumer prices than a year ago, and the highest inflation rate in 13 years, the Treasury Secretary promises to “keep an eye” on the potential inflation that can arise as a result of a permanent child credit but doesn’t believe the surges will be too exaggerated.