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WASHINGTON - The Biden administration on Thursday launched the biggest U.S. anti-poverty program in a half century, sending monthly payments for the first time to help most American parents care for their children.
The Treasury Department said the money would be deposited in the bank accounts of about 39 million households covering 88% of children in the U.S. - representing about 60 million children in all. Under the program, families will receive up to $300 per month for each child under age 6 and $250 monthly stipends for each child 6 and older.
For the moment, the payments will extend through the end of 2021, although Biden and his Democratic Party colleagues in Congress hope to extend the benefit as part of a package of social safety net measures they want to enact. If extended, the program is expected to cost about $120 billion annually.
Republicans say Biden's initiatives are too costly and object to his call to raise taxes on corporations and the wealthiest Americans to pay for them.
At the White House, Biden declared, "It's a middle-class tax cut. It's just like the wealthy get tax cuts for a lot of things, this is a tax cut for your children - having children.
"And this can make it possible for a hardworking parent to say to his or her child, 'Honey, we get - you can get your new braces now. We can get you a tutor to help you in that math class you're having trouble with. We can get you the sports equipment you need to sign up to - for your first team you're going to play on,' " Biden said.
"People have written me to tell me they'll use the money to buy their kids new shoes, to send them to summer camp, to cover after-school care when school starts up again," he said.
White House officials say the benefit could lift millions of families out of poverty and improve childhood nutrition and mental health. Some historians are comparing it to the benefits in the 1960s under President Lyndon Johnson's War on Poverty.
Inflation worries
But critics of the new spending say that some of the benefits could be eaten away by rising U.S. consumer prices, which advanced at a rapid 5.4% annual pace in June, according to the government. Financial policy makers say the U.S. inflation rate could remain high for months before easing back, as the world's biggest economy recovers from the coronavirus pandemic.
Some economists say the money pumped into the U.S. economy could help fuel a too-rapid recovery, leading to further consumer price increases.
Under terms of the benefit, part of a stimulus package passed by Democrats in March, the tax credit for taxpayers with children diminishes for individuals with adjusted gross income of more than $75,000, as well as for couples earning more than $150,000, and disappears for higher earners.
The very poorest American families are eligible to receive the benefit in full. Previously, under the U.S. tax code, families were excluded from tax credits for their children if they did not earn enough for their income to be offset by the tax benefit.
But some of the poorest families in the U.S. have never filed income tax returns, which means the U.S. tax collection agency, the Internal Revenue Service, could have trouble finding them to send them the new benefit. The White House says it is working to alleviate the problem.