HEROES Act shortchanges childrenFederal Budget
Important strides, but key issues overlooked
The $3 trillion Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, unveiled this week by the House of Representatives, makes important strides in protecting American children, but leaves key issues unaddressed.
“We’re gratified that this bill values children, giving them the same stimulus payments as adults, and that it includes provisions to expand both the Child Tax Credit and the Child and Dependent Care Tax Credit to help struggling families,” said Bruce Lesley, president of First Focus Campaign for Children. “But the bill disappoints in other critical areas. It does not provide nearly enough relief for child care or children’s health care, which both are necessary to begin the country’s social and economic recovery.”
- Stimulus payments: The HEROES Act finally offers children parity with adults, giving both groups $1,200 in direct cash assistance. The legislation fixes some of the shortcomings in the current “economic rebate” program by expanding eligibility to college students, dependents over 16, and immigrant families. However, the bill limits stimulus payments to three children per family, which disproportionately harms Hispanic and rural children. Furthermore, the bill does not increase the amount of the rebates and authorizes just one additional payment to boost household buying power and spur the economy rather than establishing recurring payments linked to an economic indicator so the payments would continue until the economy shows appropriate signs of recovery.
- Health Care: The bill provides critical assistance for Medicaid, increasing the Federal Medical Assistance Percentage (FMAP) payments to state Medicaid programs by a total of 14 percentage points through June 30, 2021. Children make up more than 40% of all Medicaid recipients. However, the bill also exempts one state from the Medicaid Maintenance of Effort (MOE), which requires states to maintain Medicaid eligibility and benefits, both critical during this public health emergency and economic crisis. The exemption imperils the provision’s integrity and should be removed. The bill also fails to address the scheduled drop in the Children’s Health Insurance Program (CHIP) E-FMAP of 11.5 percentage points in the coming fiscal year. With more than 6 million children projected to lose their health insurance due to the pandemic’s economic fallout, now is not the time to cut federal support for states providing coverage by billions of dollars. (Note: We support the bipartisan Children’s Health Insurance Program Pandemic Enhancement and Relief (CHIPPER) Act, which seeks to suspend the funding decrease.)
- Child Tax Credit: The bill offers a temporary expansion of the Child Tax Credit that would make the CTC fully refundable for 2020 and temporarily expand the credit to low and no income families left out of the current CTC program – approximately 23 million children. The HEROES act increases the amount of the credit from $2,000 to $3,000 per child per year for older eligible children and authorizes $3,600 per child per year for children under age six. The bill also temporarily makes 17-year-olds qualifying children and benefits the U.S. territories. The act also requires the Secretary of Treasury to provide the enhanced credits in the form of an advanced payment. Congress must in future legislation establish a permanent child allowance, which the National Academy of Sciences has identified as the single most effective measure to combat child poverty. Columbia University researchers project that economic fallout from the pandemic could push child poverty to its highest rate since the measure was created in 1967.
- Child and Dependent Care Tax Credit: The bill temporarily makes the non-refundable CDCTC fully refundable in 2020 to help lower-income families meet the rising costs of child care. The bill would increase the maximum credit rate from 35% to 50% and raise the phaseout threshold significantly from $15,000 to $120,000. The bill also doubles the amount of expenses eligible for the credit from $3,000 to $6,000 for one qualifying individual and $12,000 for two or more qualifying individuals.
- Hunger: The bill provides a 15% increase to the Supplemental Nutrition Assistance Program (SNAP) maximum benefit, which helps the lowest income families. It also provides an extension of the Pandemic EBT program through the summer and until schools reopen.
- Juvenile Justice: The bill provides $75 million for state and local government grants to ensure the safety of youth (and staff) involved in juvenile delinquency. It also encourages the release of youth to their parents/guardians and discourages the use of fees and fines during the crisis.
- Child Welfare: The bill offers greater flexibility to the use of funds in the Chafee Foster Care Independence Program and Education and Training Vouchers programs, both of which received moderate increases. These measures will assist foster youth who become adults during this crisis.
- Education: The bill provides $90 billion in grants to states to support statewide and local funding for K-12 education, including critical programs such as Title I Grants to States, Individuals with Disabilities Education Act (IDEA) programs, and the McKinney-Vento Education for Homeless Children and Youth program. The bill also tackles the “homework gap” by providing $1.5 billion for increasing student access to the internet as well as authorizing $5 billion for the Federal Communications Commission’s (FCC) E-Rate program that helps schools and libraries obtain affordable broadband.
- Other relief: The bill addresses some gaps in relief to children in immigrant families and U.S. territories.
In addition to the three-child cap on stimulus payments and the failure to address the declining federal payments to CHIP, both mentioned above, the HEROES Act contains several major shortcomings:
- Refundable Tax Credits and Stimulus Payments: Unfortunately, the improvements to the CTC and CDCTC are temporary, and the bill authorizes only one additional stimulus payment rather than larger, recurring payments at a time when unemployment rates are projected to remain in double-digits well into next year.
- Child Care: The HEROES Act comes up dangerously short on child care, awarding just $7 billion to the Child Care and Development Block Grant, far short of the $50 billion needed. It is estimated that the child care industry needs $9.6 billion per month to support and stabilize the system. Parents cannot return to work without child care in place, and the House bill will not ensure that the child care system and providers will be available and still in existence as workplaces begin to open again. Congress must make a significant and stabilizing investment.
- Child and youth homelessness: While the bill provides additional funding for Emergency Solutions Grants administered by the U.S. Department of Housing and Urban Development, most children and youth experiencing homelessness are not eligible for the majority of these services. We urge Congress to provide flexible funding for community organizations to meet the unique needs of children, youth, and families experiencing homelessness.
- Child Welfare: The bill misses the mark by providing less than half of the $500 million that advocates and former foster youth have identified as necessary to stabilize older youth who are preparing for independence during this crisis. The bill undercuts the $1 billion request for the Child Abuse Prevention and Treatment Act (CAPTA) by offering the program just $20 million. In addition, pediatricians have repeatedly noted that child abuse is more severe, more fatal, and more prevalent during the pandemic, yet the bill offers just $20 million for community-based child abuse prevention grants.
- Children in Developing Countries: As the U.S. emerges from the pandemic, COVID-19 will just be taking hold in many developing countries, where the death toll is likely to be substantial. International organizations are urging Congress to devote $12 billion or more to a global response that will include emergency global health, flexible humanitarian assistance, and urgent economic relief, development of and access to new vaccines, diagnostics, and treatments for low resource settings.