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Second round of Child Tax Credit payments headed to families of 61 million children

A second round of checks are hitting bank accounts as Democrats push to extend the monthly expanded Child Tax Credit payments. Payments totaling more than $15 billion went out to the families of 61 million children Friday. 

The are was a decline in the number of households reporting they sometimes or often do not have enough to eat — a change largely driven by households with children, according to Census Bureau survey data released this week. The bureau attributed the drop to the first round of payments, which went to more than 35 million families in mid-July.

The survey data also found fewer households with children were struggling to pay their usual expenses after the first round of payments. Of the households that received the Child Tax Credit payments, many reported spending it on more than one thing. Forty-seven percent said they spent the money on food, 1 in 4 spent some of the payments on clothing, while nearly 10% reported spending it on child care.

Other parents reported using the money to help pay rising rent as well as enroll children in education enrichment programs once outside their means. 

Separately, MasterCard found the advanced Child Tax Credit payments helped lift retail sales in July. The first payments last month provided parents with cash during the peak of back-to-school shopping season with clothing and department stores seeing more sales in the days immediately following the first round of payments on July 15.  

Eligible families received $300 per child under six and $250 per child ages six to 17. The monthly payments are scheduled to extend through the end of the year through the passage of the American Rescue Plan

Democrats are aiming to include an extension of the expanded, advanced credits in the $3.5 trillion budget reconciliation package making its way through Congress. The first steps to passing the legislation took place this week in the Senate.

"It would take a lot of money to make it permanent," acknowledged House Speaker Nancy Pelosi at an event Thursday in California. "But as I say, we consider it permanent."  

Even as payments reach millions of families, progressive policy experts say there is more to be done. A recent analysis by the Center on Budget and Policy Priorities found roughly 4 million children in low-income families risk missing out on the payments this year if their families do not provide the IRS with the necessary identification and payment information to receive them. That's because some families make too little money to be required to pay taxes, but they are still eligible for the first time to receive the Child Tax Credit. 

In August, an additional 1.6 million children are receiving the monthly Child Tax Credit payments from the month before as more families sign up to receive payments. 

"We want every eligible family to have access to the advance Child Tax Credit, which is why we will continue our outreach efforts to drive enrollment as our children return to school," Deputy Treasury Secretary Wally Adeyemo said in a statement Wednesday. 

The Treasury Department said it's committed to creating a permanent, multi-lingual, and mobile-friendly sign-up tool to help more Americans who do not regularly file taxes claim their Child Tax Credit payments. In the meantime, a sign-up tool created by the nonprofit Code for America will become available to help get more families enrolled in the coming weeks. 

Even as the number of children receiving payments grows, the Treasury Department said Friday that a technical issue meant a small percentage of recipients who received payments by direct deposit in July will be mailed paper checks for the August payment. That issue affects less than 15% of recipients and is expected to be resolved by September. 

The expanded credit does not come without significant cost — more than $100 billion for 2021 alone. Republicans have raised concerns about the massive cost of Democrats' spending proposals moving forward, including expanding the credit.

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