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Center on Budget & Policy Priorities: To Strengthen Economic Security, Policymakers Should Expand the Child Tax Credit to the 19 Million Children Who Receive Less Than the Full Credit Amount
WASHINGTON, July 28 -- The Center on Budget and Policy Priorities issued the following report on July 27, 2026, by Federal Tax Policy Director Kris Cox, senior research analyst Stephanie Hingtgen and Kiran Rachamallu:
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To Strengthen Economic Security, Policymakers Should Expand the Child Tax Credit to the 19 Million Children Who Receive Less Than the Full Credit Amount
Child Tax Credit Helps Make Raising Children More Affordable, and Its Full Value Should Be Available to Families With Lower Incomes
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Every family should have a strong foundation of economic security that lets them meet ... Show Full Article WASHINGTON, July 28 -- The Center on Budget and Policy Priorities issued the following report on July 27, 2026, by Federal Tax Policy Director Kris Cox, senior research analyst Stephanie Hingtgen and Kiran Rachamallu: * * * To Strengthen Economic Security, Policymakers Should Expand the Child Tax Credit to the 19 Million Children Who Receive Less Than the Full Credit Amount Child Tax Credit Helps Make Raising Children More Affordable, and Its Full Value Should Be Available to Families With Lower Incomes - Every family should have a strong foundation of economic security that lets them meettheir needs and support their children, whether they live in rural communities or big cities, whether parents and caregivers are working for pay; are unable to work due to health conditions or caregiving responsibilities; or are between jobs, which happens frequently, particularly for low-paid workers. Policymakers play a huge role in strengthening or weakening families' economic security through the laws they pass and the actions they take.
For policymakers who want to address affordability concerns, the Child Tax Credit is a proven, bipartisan tool to strengthen families' economic security that can and should be improved. Lawmakers should make the full credit available to children in families with low and moderate incomes, as they did in the American Rescue Plan Act's temporary expansion of the credit for tax year 2021. Research done at the time showed that the vast majority of families with low and moderate incomes spent some or all of the additional income from the expanded Child Tax Credit ($3,600 per child under age 6 and $3,000 per child ages 6-17) on essentials like food, housing, utilities, and clothing. Combined with other forms of COVID-19 pandemic relief, the expanded Child Tax Credit helped drive the child poverty rate down to record lows in 2021.
The Child Tax Credit expansion enacted in the 2025 Republican reconciliation law left an estimated 19 million children under age 17 out of the full $2,200 Child Tax Credit, simply because their families' incomes are too low. (See Figure 1.) This represents more than 1 in 4 children under age 17 who are excluded from the full value of the Child Tax Credit -- the vast majority of whom are in working families. More than half of Black children, more than 1 in 3 American Indian and Alaska Native children, and more than 1 in 3 Latine children are left out of the full credit because their families' incomes are too low; roughly 1 in 5 white children and more than 1 in 6 Asian children also get less than the full credit. The credit needs improvement so it can provide more meaningful support to families with children struggling the most to afford the basics.
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FIGURE 1: Policymakers Should Make the Full Child Tax Credit Available to Children in Families With Lower Incomes
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Families were already struggling to afford essentials such as food, health care, housing, child care, and utilities, and actions by the Trump Administration and congressional Republicans have worsened economic security, especially for families with lower incomes. The 2025 Republican reconciliation law is taking food assistance and health care away from millions of people to help pay for tax cuts that favor the wealthy and the Trump Administration's massive and cruel detention and deportation operation. In a targeted attack on immigrant families, the reconciliation law took away Child Tax Credit eligibility from children who don't have at least one parent with a Social Security number (SSN). On top of the law, Trump's haphazard tariffs have increased the price of food, clothes, and other consumer goods, and Trump's war in Iran has significantly raised gas prices, further increasing expenses for families.
Permanently expanding the Child Tax Credit so its full value reaches families with lower incomes, and reinstating the credit for all children, regardless of whether they or their parents file taxes using an Individual Taxpayer Identification Number (ITIN) or an SSN, are key ways that lawmakers can strengthen economic security for families across the country and children of all races. Proposals to extend the credit's reach to families with low and moderate incomes have had bipartisan support and policymakers should act.
Families With Lower Incomes Hit Hardest by Affordability Crisis
People routinely cite "affordability" as their top concern in public opinion polls, and families with low and moderate incomes are struggling with affordability the most.[1] Among households with incomes in the bottom half of the income distribution, 1 in 4 reported either experiencing food insecurity or not being able to pay their rent, mortgage, or utility bill in 2023 (the most recent available data), compared with about 1 in 12 of households with incomes in the top half of the income distribution -- three times the rate.[2] These challenges stem from both limited income -- due to long-standing structural issues with the low-paid labor market - and price increases.
The low-paid labor market is characterized by volatile earnings, a lack of paid family or medical leave, a stagnant federal minimum wage, limited wage growth, and erratic hours that make finding stable child care difficult. These conditions often mean that it is hard for people working low-paid jobs to meaningfully increase their incomes, even if they want to work more hours.[3]
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FIGURE 2: Basics Take Up Bulk of Income for People With Incomes in Bottom Half of Income Distribution
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At the same time, prices have been rising, including those for many essential items.[4] Families with lower incomes are hit harder by price increases because they spend a large share of their income on necessities, such as groceries. It can be challenging for them to cut these purchases without making difficult tradeoffs; in other words, they have less room in their budgets where they can cut back. Households with incomes in the bottom half of the distribution spend on average $6 out of every $7 - or 86 percent of their income - on basic items in five key areas: utilities, groceries, health care, transportation, and shelter. Households with incomes in the top half of the income distribution, on the other hand, spend only 36 percent (or $2.50 out of every $7) of their income on these basic items.[5] (See Figure 2.)
Actions by the Administration and congressional Republicans have worsened these affordability challenges.[6] The unprecedented cuts to Medicaid in the 2025 reconciliation law and failure to extend Premium Tax Credit enhancements, which help people purchase health insurance through the Affordable Care Act (ACA) marketplace, mean that roughly 15 million people will lose their health coverage, based on estimates by the Congressional Budget Office.[7] Historic cuts to SNAP are projected to terminate or substantially cut SNAP food benefits for about 4 million people in a typical month once the changes are fully implemented, based on Congressional Budget Office (CBO) estimates.[8] Early data show that, as expected, millions of people are losing health coverage, and impacts on SNAP participation are even larger than predicted.[9]
The Administration's tariffs have raised the price of imported goods, including clothes, cars, food, and inputs for other goods, making it more expensive for families to get to work, put food on the table, and buy clothes for their children. Families with the lowest incomes have been hardest hit by tariff-driven price increases as well as by the reconciliation law's changes, seeing the largest decline in household resources measured as a share of their income.[10] And families now have to contend with yet another expense: high gas prices stemming from the war in Iran. The retail price for regular gasoline in recent months has been about 20 to 40 percent higher than one year prior.[11]
Making life more manageable for families in the face of these affordability challenges can take the form of reducing the price of goods, increasing people's incomes, or both. Policymakers have proven tools that can increase families' incomes, which can make essentials more affordable even if the costs for specific items do not drop, by increasing their purchasing power. Expanding the Child Tax Credit for children in families with lower incomes would boost families' after-tax income and let them spend money on the items their families most need.
2025 Reconciliation Law's Child Tax Credit Changes Leave Behind 19 Million Children and Deny Credit to Children With Immigrant Parents
The Child Tax Credit can be a powerful tool when it is structured to better reach families with lower incomes. However, the structure of the Child Tax Credit has long-standing flaws -- giving children in families with lower incomes a smaller credit than families with higher incomes. The reconciliation law did nothing to improve this design, so these flaws remain:
* The credit phases in slowly at 15 cents per dollar earned, regardless of the number of children in a family, meaning that many lower-income families with two or three children receive the same total credit as a family with one child at the same earnings level, and others receive only a modestly higher total amount;
* Families receive no credit for income earned below $2,500; and
* There is a lower maximum credit amount that families can receive as a refund -- $1,700 per child for tax year 2026 (compared to the $2,200 per-child credit amount available to families with higher incomes).
Republican policymakers chose not to address these structural issues with the credit in the 2025 reconciliation law and instead enacted changes that exacerbate the gap between the credit that families with lower incomes can receive and the credit that families with higher incomes can receive. The reconciliation law permanently increased the maximum credit from $2,000 to $2,200 per child, starting in tax year 2025, and indexed the credit amount for inflation starting in tax year 2026.[12] Because the law left in place the lower maximum credit that families could receive as a refund -- $1,700 for tax year 2025, indexed for inflation -- the reconciliation law widened the gap between these amounts from $300 to $500 per child.[13]
The reconciliation law also took the credit away from children who are U.S. citizens or have a lawful immigration status unless at least one of their parents has an SSN.[14] This change is more restrictive than the 2017 law enacted by Republicans during the first Trump Administration, which took eligibility for the credit away from children who used an ITIN rather than an SSN.[15] Roughly 2.7 million children who are U.S. citizens would have their eligibility taken away by the reconciliation law, by one estimate.[16] Policymakers should reverse this new restrictive policy.
More Than 1 in 4 Children Are Excluded From the Full Value of the Child Tax Credit, With Black, Latine, and American Indian and Alaska Native Children Disproportionately Left Out
An estimated 19 million children under age 17 will receive less than the full $2,200 Child Tax Credit, or none at all, this year simply because their families have low or moderate incomes. This represents more than 1 in 4 children under age 17 across the country -- the vast majority of whom are in working families. For example, a single parent with two children would have to earn at least $34,150 for tax year 2026 to receive the full credit -- or about $16.42 per hour working 40 hours a week for a full 52 weeks (with no unpaid leave). That's more than the minimum wage in 46 states, and many people working for low pay are not offered 40 hours consistently each week or have access to paid leave.[17] A married couple with two children would have to earn at least $42,200.
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FIGURE 3: Black, Native American, and Latine Children Are Disproportionately Left Out of the Full Child Tax Credit
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Children under age 17 who are left out of the full credit include those whose families often face the effects of past and current discrimination and other barriers to opportunity that have left them overrepresented in low-paying work: more than half of Black children, more than 1 in 3 American Indian and Alaska Native children, and more than 1 in 3 Latine children are left out of the full credit. Roughly 1 in 5 white children and more than 1 in 6 Asian children also get less than the full credit. (See Figure 3; see Appendix Table 1 for estimates of these children by state.)
Children left out of the full credit have parents who work in a wide range of low-paid occupations throughout the country. They work in various jobs across the care sector, caring for other people's children as child care workers and teaching assistants, and caring for people who are sick or older as nursing assistants and personal care and home health aides. They also contribute to their communities as cashiers and construction workers. An estimated 776,000 children left out of the full credit have parents who are veterans and have family incomes low enough that they don't qualify for the full credit.[18]
The credit's structure disproportionately disadvantages children who live in rural (that is, non-metropolitan) communities. More than 1 in 3 children under age 17 living in rural communities would get less than the full $2,200 Child Tax Credit because their families' incomes are too low, while in metropolitan (metro) areas, a smaller but still substantial share -- more than 1 in 4 children under age 17 -- would get less than the full credit.[19] Families in rural communities are particularly hurt by the credit's flawed structure, largely because pay tends to be lower in rural areas; in 2024, median pay in rural areas was roughly 18 percent lower than in metro areas.[20]
Children in rural areas left out of the full credit reflect the racial diversity of rural communities across the country. Among children in rural areas who receive less than the full Child Tax Credit, about 16 percent are Latine, 15 percent are Black, and 8 percent are American Indian or Alaska Native -- each group overrepresented compared with their share of the rural population of children under age 17. About 56 percent of these children are white.[21]
The reconciliation law's changes to the credit largely left out children in families with low and moderate incomes despite evidence that additional income can make a meaningful difference for these children. Many studies on tax credits similar to the Child Tax Credit find evidence linking the additional income to improved health and educational outcomes during childhood, and increased educational attainment, employment, and earnings in young adulthood.[22] Evidence from a wide range of income support programs also shows another important benefit of strengthening families' economic security -- reducing involvement in the child welfare system.[23] (See text box, "Evidence Links Additional Income to Reduced Involvement in the Child Welfare System.")
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Evidence Links Additional Income to Reduced Involvement in the Child Welfare System
Evidence suggests income assistance for families with lower incomes is an effective tool for reducing child welfare involvement and supporting family stability. Risk for child maltreatment (abuse and/or neglect) is complex, and income support will not eliminate all cases. But material hardship predicts contact with the child welfare system overall, for families of all races, even after controlling for other risk factors.a And nearly three-quarters (71 percent) of families with children and low incomes reported experiencing at least one form of material hardship in 2023, such as not having enough food or having trouble paying their utility bill.b Income support, such as an expanded Child Tax Credit for children in families with low incomes, can improve families' economic security and stability.
A 2025 study using California administrative data estimated that for each additional $1,000 families are eligible for as a tax refund early in a child's life (after accounting for federal and state tax provisions), the likelihood that a child born into a household with low income has a substantiated referral to a state child protective services agency by age 3 is lower by 3 percent and protective effects persist through at least age 8.c Another study looked at short-term effects of tax refunds on child welfare involvement and found that state-level rates of maltreatment referrals fell 5 percent following issuance of state and federal tax refunds (16.8 fewer reports per 100,000 children in the five-week period after refund issuance) for each additional $1,000 in per-child refund issuance.d
Considering that income supports are associated with multiple beneficial effects for families and children, policymakers interested in improving outcomes for children, including through reduced child welfare involvement, should strongly consider ways to strengthen income assistance for families with lower incomes. One way to advance this goal is providing children in families with lower incomes the same Child Tax Credit that children in families with higher incomes get.
a Margaret M.C. Thomas and Jane Waldfogel, "What kind of 'poverty' predicts CPS contact: Income, material hardship, and differences among racialized groups," Children and Youth Services Review, Vol. 136, May 2022, https://doi.org/10.1016/j.childyouth.2022.106400. Controls included: child sex at birth; child low birthweight; mother U.S.-born status; child age, mother age; mother education level; mother housing status; mother marital/co-residence status; mother number of children; father's contact w/child; mother poor health status; mother depression.
b Based on the share of adults ages 18 to 64 with family incomes below 200 percent of the federal poverty level experiencing material hardship in the past 12 months relative to share of all adults ages 18 to 64, by presence of children younger than 18 in the household in Urban Institute's Well-Being and Basic Needs Survey, December 2023. Margot Crandall-Hollick et al., "An Expanded Child Tax Credit Could Help Low-Income Families Facing Material Hardships," Urban Institute, December 16, 2024, https://www.urban.org/research/publication/expanded-child-tax-credit-could-help-low-income-families-facing-material-hardships.
c Katherine Rittenhouse, "Income and Child Maltreatment: Evidence from a Discontinuity in Tax Benefits," Review of Economics and Statistics, December 2025, https://doi.org/10.1162/REST.a.1690.
d Nicole L. Kovski et al., "Short-Term Effects of Tax Credits on Rates of Child Maltreatment Reports in the United States," Pediatrics, Vol. 150, No. 1, July 2022, https://doi.org/10.1542/peds.2021-054939.
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Policymakers Should Help Improve Economic Security by Expanding Child Tax Credit for Families With Lower Incomes
One of the best ways to improve economic security for families with low and moderate incomes would be for policymakers to ensure that the 19 million children left out of the full Child Tax Credit are eligible for the full $2,200 amount that higher-income families receive (often referred to as making the credit "fully refundable"). Making the full $2,200 credit available to families with lower incomes would have a meaningful impact on child poverty, reducing the number of children in families with incomes below the poverty line by 1.2 million this year.[24]
To understand how this credit expansion would help a lower-income family, consider a single parent working part-time as a cashier and being paid $16,000, with a 3-year-old and a 7-year-old, who is struggling to pay their utility bills and afford gas to get to work. The family will receive a $2,025 Child Tax Credit for tax year 2026 under the reconciliation law -- the same amount they would have received under prior law. But if the family instead were eligible for the full Child Tax Credit, they would see their credit more than double -- to $4,400 -- better supporting them in meeting their children's basic needs.
Congress has made the full credit available to families with lower incomes before, with great success. The American Rescue Plan Act (ARPA) included a temporary change that provided children in families with lower incomes the same credit amount as families with higher incomes for tax year 2021. ARPA also increased the maximum credit to $3,600 per child under age 6 and $3,000 per child age 6-17 and provided part of the credit through monthly payments. This expanded credit played an important role in supporting families with lower incomes; the single-parent, two-child family described above would have received a $6,600 credit. Research done at the time showed that the vast majority of families with low and moderate incomes spent some or all of the additional income from the expanded Child Tax Credit on essentials like food, housing, utilities, and clothing.[25] Combined with other forms of pandemic relief, the expanded Child Tax Credit helped drive the child poverty rate down to record lows in 2021.[26]
The recent American Family Act (AFA) proposal, introduced by Representatives Rosa DeLauro and Susan DelBene, and Senator Michael Bennet and others, would also provide children in families with lower incomes the full credit amount, substantially reducing child poverty.[27] The bill would build on the 2021 expansion by updating the maximum credit levels to account for inflation since 2021 and introducing a baby bonus that would help families afford the costs of a new child during the first year of a child's life.
While policymakers should once again make the full Child Tax Credit available to families with lower incomes, a recent bipartisan alternative would make solid progress toward that goal by addressing some of the current credit's structural flaws. Just two years ago, in January 2024, legislation introduced by House Ways and Means Chair Jason Smith and then-Senate Finance Committee Chair Ron Wyden passed the House by a wide margin -- including votes from 169 House Republicans -- but Senate Republicans blocked the bill.[28] While not making the full credit available to all children in families with low incomes, it made significant progress through a couple of changes:
* It phased the credit in at 15 percent per child, rather than per family, ensuring that families with lower incomes would receive the same credit for each of their children, as higher-income families do, and removing the penalty for larger families.
* It increased, and then effectively ended, the lower maximum credit amount that can be refunded.
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FIGURE 4: Other Child Tax Credit Expansions Would Boost Incomes for 19 Million Children Left Out of Full Credit in Republican Reconciliation
Together, these reforms would have expanded the credit for more than 80 percent of the children who were left out of the full credit in its first year. When fully implemented, in 2025, the legislation would have reduced the number of children with incomes below the poverty line by half a million or more.[29]
To understand the Smith-Wyden legislation's potential impact, consider the family introduced above -- a single parent being paid $16,000, with two children. If policymakers had included the expansion as proposed in the bipartisan Smith-Wyden bill in the 2025 reconciliation law, the family's credit for tax year 2026 would have increased from $2,025 to $4,050. (See Figure 4.)
Another bipartisan bill sponsored by Senators Todd Young and Maggie Hassan proposes a more modest structural change that would phase in the credit starting at the first dollar of a family's earnings.[30] This proposal complements the Smith-Wyden bill; combining these proposals would further expand the credit for the children currently left out of the full credit.
Policymakers play a critical role in families' economic security. They should prioritize expanding the Child Tax Credit for families with low and moderate incomes, focusing limited resources where they will have the greatest impact -- on families with the greatest needs.
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Appendix table 1: More Than 19 Million Children Are Left Out of the 2025 Reconciliation Law's Full $2,200 Child Tax Credit and Would Benefit From a Fully Refundable Credit
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End Notes
[1] Brendan Duke, "A Framework to Evaluate Affordability Proposals," CBPP, June 15, 2026, https://www.cbpp.org/research/federal-budget/a-framework-to-evaluate-affordability-proposals.
[2] CBPP analysis of Survey of Income and Program Participation (SIPP) data for 2023. SIPP data show median annual income in 2023 was $80,160.
[3] Kristin F. Butcher and Diane Whitmore Schanzenbach, "Most Workers in Low-Wage Labor Market Work Substantial Hours, in Volatile Jobs," CBPP, July 24, 2018, https://www.cbpp.org/research/poverty-and-inequality/most-workers-in-low-wage-labor-market-work-substantial-hours-in. Lauren Bauer, Chloe East, and Olivia Howard, "Low-income workers experience--by far--the most earnings and work hours instability," Brookings, January 9, 2025, https://www.brookings.edu/articles/low-income-workers-experience-by-far-the-most-earnings-and-work-hours-instability/.
[4] "The cost of essential goods and services is rising faster than earnings. Since 2017, average earnings have grown about 43 percent nationwide. Over the same period, home sale prices have increased 81 percent and rents 54 percent. The lowest-cost Silver health plan on the Affordable Care Act Marketplace has risen 77 percent, and child care costs have grown dramatically." Urban Institute, "The American Affordability Tracker," updated April 2, 2026, https://www.urban.org/data-tools/american-affordability-tracker.
[5] CBPP analysis of Bureau of Labor Statistics Consumer Expenditure Survey (CE) data for 2024 at https://www.bls.gov/cex/tables/calendar-year/mean-item-share-average-standard-error/cu-income-deciles-before-taxes-2024.xlsx. CE data show median annual income in 2024 was $74,000. The listed categories do not include other essentials, such as clothes or household items like diapers, paper towels, and cleaning supplies.
[6] Brendan Duke, "Trump Administration, Congressional Republicans Are Worsening Affordability Challenges in Many Ways," CBPP, December 18, 2025, https://www.cbpp.org/research/poverty-and-inequality/trump-administration-congressional-republicans-are-worsening.
[7] See "Taking Away Health Care: Huge coverage losses, higher costs for consumers, and new costs shifted to states" in "A Record of Historic Harm in the First Year of Trump's Second Term," January 14, 2026, CBPP, https://www.cbpp.org/research/federal-budget/a-record-of-historic-harm-in-the-first-year-of-trumps-second-term#huge-coverage-losses-cbpp-anchor.
[8] CBPP, "By the Numbers: Harmful Republican Megabill Takes Food Assistance Away From Millions of People," updated August 14, 2025, https://www.cbpp.org/research/food-assistance/by-the-numbers-harmful-republican-megabill-takes-food-assistance-away-from.
[9] Claire Heyison, "Nearly 3 Million Fewer People Secured Marketplace Coverage After Republican Health Care Cuts, New Data Show," CBPP, June 30, 2026, https://www.cbpp.org/blog/nearly-3-million-fewer-people-secured-marketplace-coverage-after-republican-health-care-cuts; Dottie Rosenbaum, Joseph Llobrera, Catlin Nchanko, and Luis Nunez, "SNAP Tracker: People Are Losing Food Assistance as the Republican Megabill Is Implemented," CBPP, May 18, 2026, https://www.cbpp.org/research/food-assistance/snap-tracker-people-are-losing-food-assistance-as-the-republican-megabill.
[10] See the December Data Update (the latest available data), which reflects tariff policy as of November 17, 2025, at The Budget Lab, "Combined Distributional Effects of the One Big Beautiful Bill Act and of Tariffs," August 12, 2025, https://budgetlab.yale.edu/research/combined-distributional-effects-one-big-beautiful-bill-act-and-tariffs-0.
[11] We looked at monthly average prices for retail gasoline (regular gasoline, all areas, all formulations) for March, April, May, and June 2026 and calculated the percent change relative to average prices for those months in 2025 using data from the U.S. Energy Information Administration, https://www.eia.gov/petroleum/gasdiesel/?hl=en.
[12] The 2017 tax law temporarily increased the maximum credit amount from $1,000 to $2,000 per child; this increase would have expired at the end of tax year 2025 in the absence of the 2025 reconciliation law.
[13] The $2,200 maximum credit amount and the $1,700 lower maximum credit amount are both indexed but use different parameters to adjust for inflation. Based on CBO projections as of February 2026, the difference is expected to be between $500 and $600 per child in future years. Prior to the 2025 reconciliation law, the $2,000 maximum credit was not indexed to inflation while the lower maximum credit was indexed. This meant that over time the lower cap amount would have equalized with the maximum credit for which middle- and upper-income families were eligible. Depending on the inflation adjustments in a given year, the maximum credit and lower maximum credit amounts may stay the same; for both tax years 2025 and 2026, the maximum credit was $2,200 and the lower maximum credit was $1,700. CBO Key Budget and Economic Data, Tax Parameters and Effective Marginal Tax Rates, Feb 2026, https://www.cbo.gov/data/budget-economic-data#10.
[14] Children ineligible for the Child Tax Credit based on immigration status are eligible for the much smaller $500 credit for other dependents, but it only offsets income tax liability -- that is, it cannot be paid as a refund -- and many families with lower incomes cannot receive it because they owe no federal income tax due to their low income.
[15] The 2017 tax law newly required children claimed for the Child Tax Credit to have an SSN, which denied eligibility for the credit for an estimated 675,000 to 1 million children. Stephanie Hingtgen, "Recovery Bill Should Restore Child Tax Credit to Children Without Social Security Numbers," CBPP, August 13, 2021, https://www.cbpp.org/blog/recovery-bill-should-restore-child-tax-credit-to-children-without-social-security-numbers;Marco Guzman, "Inclusive Child Tax Credit Reform Would Restore Benefit to 1 Million Young 'Dreamers,'" Institute on Taxation and Economic Policy, April 27, 2021, https://itep.org/inclusive-child-tax-credit-reform-would-restore-benefit-to-1-million-young-dreamers/.
[16] The 2.7 million figure is a rough estimate due to data limitations. It overstates the number of children who would lose eligibility from the 2025 reconciliation law by counting all children without accounting for a family's income, and thus their eligibility for the credits. But it also understates the number of children who would lose eligibility by counting only children who are U.S. citizens but who lack a parent with an SSN. Children who are not U.S. citizens yet have a lawful immigration status and have an SSN will also lose eligibility if they do not have at least one parent with an SSN, and are not included in the 2.7 million figure. Julia Gelatt, Migration Policy Institute, November 2025, https://www.linkedin.com/posts/julia-gelatt-86105953_millions-of-us-kids-live-in-mixed-status-activity-7394407282366681090-bHou.
[17] Thirty states and the District of Columbia have a state minimum wage higher than the federal minimum wage. California, Connecticut, parts of New York, and Washington, as well as the District of Columbia, have a minimum wage higher than $16.42 per hour. See Department of Labor, "Consolidated Minimum Wage Table," updated July 1, 2026, https://www.dol.gov/agencies/whd/mw-consolidated. Lauren Bauer, Chloe East, and Olivia Howard, "Low-income workers experience--by far--the most earnings and work hours instability," Brookings, January 9, 2025, https://www.brookings.edu/articles/low-income-workers-experience-by-far-the-most-earnings-and-work-hours-instability/; Bureau of Labor Statistics, "Table 6. Selected paid leave benefits: Access, March 2025," https://www.bls.gov/news.release/ebs2.t06.htm; Bureau of Labor Statistics, "Access to and Use of Leave Summary -- 2017-2018; Data From the American Time Use Survey," https://www.bls.gov/news.release/pdf/leave.pdf.
[18] Tax Policy Center (TPC) national estimate for 2026 allocated by parents' veteran status based on CBPP analysis of American Community Survey (ACS) data for 2022-2024, using 2026 tax parameters and incomes adjusted to 2026 projected levels. We use February 2026 Congressional Budget Office projections to adjust income for inflation through 2026 and further adjust earnings and rental, interest, and dividend income for real growth. TPC, "T25-0258 - Distribution of Tax Units, Children, and Dependents by Size of Child Tax Credit (CTC), 2026," August 5, 2025, https://taxpolicycenter.org/model-estimates/T25-0258.
[19] Under the Office of Management and Budget's 2023 delineations, metro areas are generally defined as cities of 50,000 or more people and surrounding counties that contain or are strongly connected to that city by commuting. All other areas are considered non-metro. We use rural and non-metro interchangeably. Tax Policy Center (TPC) national estimate for 2026 allocated by metropolitan/non-metropolitan area based on CBPP analysis of American Community Survey data for 2022-2024, using 2026 tax parameters and incomes adjusted to 2026 projected levels, and Missouri Census Data Center's Geocorr 2022 application.
[20] Based on median earnings for full-time, year-round workers, ACS data for 2024, https://data.census.gov/table?q=S2001&g=010XXC0US_010XXH0US&y=2024.
[21] Tax Policy Center (TPC) national estimate for 2026 allocated by race or ethnicity and metropolitan/nonmetropolitan area based on CBPP analysis of American Community Survey (ACS) data for 2022-2024, using 2026 tax parameters and incomes adjusted to 2026 projected levels, and Missouri Census Data Center's Geocorr 2022 application.
[22] Katherine Michelmore, "Tax Credits and Child Outcomes: Lessons from the U.S., U.K., and Canada," NBER, May 2025, https://www.nber.org/papers/w33822.
[23] Victoria Hunter Gibney and Urvi Patel, "Income Support Reduces Child Maltreatment, Research From Multiple Programs Suggests," CBPP, April 29, 2026, https://www.cbpp.org/research/poverty-and-inequality/income-support-reduces-child-maltreatment-research-from-multiple.
[24] Poverty estimate uses the Supplemental Poverty Measure, which counts more forms of income than the official poverty measure, among other differences. CBPP analysis of March 2025 Current Population Survey, using 2026 tax parameters and incomes adjusted to 2026 projected levels. We use February 2026 Congressional Budget Office projections to adjust income for inflation through 2026 and further adjust earnings and rental, interest, and dividend income for real growth.
[25] Claire Zippel, "9 in 10 Families With Low Incomes Are Using Child Tax Credits to Pay for Necessities, Education," CBPP, October 21, 2021, https://www.cbpp.org/blog/9-in-10-families-with-low-incomes-are-using-child-tax-credits-to-pay-for-necessities-education.
[26] Chuck Marr, Samantha Jacoby, Kris Cox, and Stephanie Hingtgen, "What a Better Tax Bill Would Look Like," CBPP, April 23, 2025, https://www.cbpp.org/research/federal-tax/what-a-better-tax-bill-would-look-like.
[27] H.R. 2763, "American Family Act," https://www.congress.gov/bill/119th-congress/house-bill/2763?s=2&r=7&hl=american+families+act; S. 1393, "American Family Act," https://www.congress.gov/bill/119th-congress/senate-bill/1393?s=2&r=8&hl=american+families+act. Christopher Yera, Sophie Collyer, Megan Curran, and David Harris, "What Could 2024 Child Poverty Rates Have Looked Like Had an Expanded Child Tax Credit Been in Place?" Center on Poverty and Social Policy at Columbia University, September 9, 2025, https://povertycenter.columbia.edu/sites/povertycenter.columbia.edu/files/content/Publications/What-Could-2024-Child-Poverty-Rates-Have-Looked-Like-CPSP-2025.pdf.
[28] H.R. 7024, "Tax Relief for American Families and Workers Act of 2024," https://www.congress.gov/bill/118th-congress/house-bill/7024. The bill stalled and then failed to pass in the Senate in 2024.
[29] The legislation also allowed families to use their prior year's earnings to calculate the credit in cases where their earnings declined in the current year, such as from cuts to their work hours, job loss, or reduced income due to someone having to step out of the workforce to attend to caregiving needs. The unfortunate attacks on this provision, referred to as a "lookback," failed to account for reasons that a person's earnings might decline in a given year that are often outside their control including structural characteristics of the low-paid labor market, like a lack of paid family or medical leave and erratic hours that make finding stable child care difficult. Kris Cox et al., "About 16 Million Children in Low-Income Families Would Gain in First Year of Bipartisan Child Tax Credit Expansion," CBPP, January 22, 2024, https://www.cbpp.org/research/federal-tax/about-16-million-children-in-low-income-families-would-gain-in-first-year-of. The bill proposed temporary expansions of the credit for tax years 2023, 2024, and 2025.
[30] S. 3596, "Stronger Start for Working Families Act," https://www.congress.gov/bill/119th-congress/senate-bill/3596/text.
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Kris Cox, Director of Federal Tax Policy
Stephanie Hingtgen, Senior Research Analyst
Kiran Rachamallu, Former Staff
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Original text here: https://www.cbpp.org/research/federal-tax/to-strengthen-economic-security-policymakers-should-expand-the-child-tax
[Category: ThinkTank]
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To Strengthen Economic Security, Policymakers Should Expand the Child Tax Credit to the 19 Million Children Who Receive Less Than the Full Credit Amount
Child Tax Credit Helps Make Raising Children More Affordable, and Its Full Value Should Be Available to Families With Lower Incomes
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Every family should have a strong foundation of economic security that lets them meet ... Show Full Article WASHINGTON, July 28 -- The Center on Budget and Policy Priorities issued the following report on July 27, 2026, by Federal Tax Policy Director Kris Cox, senior research analyst Stephanie Hingtgen and Kiran Rachamallu: * * * To Strengthen Economic Security, Policymakers Should Expand the Child Tax Credit to the 19 Million Children Who Receive Less Than the Full Credit Amount Child Tax Credit Helps Make Raising Children More Affordable, and Its Full Value Should Be Available to Families With Lower Incomes - Every family should have a strong foundation of economic security that lets them meettheir needs and support their children, whether they live in rural communities or big cities, whether parents and caregivers are working for pay; are unable to work due to health conditions or caregiving responsibilities; or are between jobs, which happens frequently, particularly for low-paid workers. Policymakers play a huge role in strengthening or weakening families' economic security through the laws they pass and the actions they take.
For policymakers who want to address affordability concerns, the Child Tax Credit is a proven, bipartisan tool to strengthen families' economic security that can and should be improved. Lawmakers should make the full credit available to children in families with low and moderate incomes, as they did in the American Rescue Plan Act's temporary expansion of the credit for tax year 2021. Research done at the time showed that the vast majority of families with low and moderate incomes spent some or all of the additional income from the expanded Child Tax Credit ($3,600 per child under age 6 and $3,000 per child ages 6-17) on essentials like food, housing, utilities, and clothing. Combined with other forms of COVID-19 pandemic relief, the expanded Child Tax Credit helped drive the child poverty rate down to record lows in 2021.
The Child Tax Credit expansion enacted in the 2025 Republican reconciliation law left an estimated 19 million children under age 17 out of the full $2,200 Child Tax Credit, simply because their families' incomes are too low. (See Figure 1.) This represents more than 1 in 4 children under age 17 who are excluded from the full value of the Child Tax Credit -- the vast majority of whom are in working families. More than half of Black children, more than 1 in 3 American Indian and Alaska Native children, and more than 1 in 3 Latine children are left out of the full credit because their families' incomes are too low; roughly 1 in 5 white children and more than 1 in 6 Asian children also get less than the full credit. The credit needs improvement so it can provide more meaningful support to families with children struggling the most to afford the basics.
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FIGURE 1: Policymakers Should Make the Full Child Tax Credit Available to Children in Families With Lower Incomes
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Families were already struggling to afford essentials such as food, health care, housing, child care, and utilities, and actions by the Trump Administration and congressional Republicans have worsened economic security, especially for families with lower incomes. The 2025 Republican reconciliation law is taking food assistance and health care away from millions of people to help pay for tax cuts that favor the wealthy and the Trump Administration's massive and cruel detention and deportation operation. In a targeted attack on immigrant families, the reconciliation law took away Child Tax Credit eligibility from children who don't have at least one parent with a Social Security number (SSN). On top of the law, Trump's haphazard tariffs have increased the price of food, clothes, and other consumer goods, and Trump's war in Iran has significantly raised gas prices, further increasing expenses for families.
Permanently expanding the Child Tax Credit so its full value reaches families with lower incomes, and reinstating the credit for all children, regardless of whether they or their parents file taxes using an Individual Taxpayer Identification Number (ITIN) or an SSN, are key ways that lawmakers can strengthen economic security for families across the country and children of all races. Proposals to extend the credit's reach to families with low and moderate incomes have had bipartisan support and policymakers should act.
Families With Lower Incomes Hit Hardest by Affordability Crisis
People routinely cite "affordability" as their top concern in public opinion polls, and families with low and moderate incomes are struggling with affordability the most.[1] Among households with incomes in the bottom half of the income distribution, 1 in 4 reported either experiencing food insecurity or not being able to pay their rent, mortgage, or utility bill in 2023 (the most recent available data), compared with about 1 in 12 of households with incomes in the top half of the income distribution -- three times the rate.[2] These challenges stem from both limited income -- due to long-standing structural issues with the low-paid labor market - and price increases.
The low-paid labor market is characterized by volatile earnings, a lack of paid family or medical leave, a stagnant federal minimum wage, limited wage growth, and erratic hours that make finding stable child care difficult. These conditions often mean that it is hard for people working low-paid jobs to meaningfully increase their incomes, even if they want to work more hours.[3]
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FIGURE 2: Basics Take Up Bulk of Income for People With Incomes in Bottom Half of Income Distribution
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At the same time, prices have been rising, including those for many essential items.[4] Families with lower incomes are hit harder by price increases because they spend a large share of their income on necessities, such as groceries. It can be challenging for them to cut these purchases without making difficult tradeoffs; in other words, they have less room in their budgets where they can cut back. Households with incomes in the bottom half of the distribution spend on average $6 out of every $7 - or 86 percent of their income - on basic items in five key areas: utilities, groceries, health care, transportation, and shelter. Households with incomes in the top half of the income distribution, on the other hand, spend only 36 percent (or $2.50 out of every $7) of their income on these basic items.[5] (See Figure 2.)
Actions by the Administration and congressional Republicans have worsened these affordability challenges.[6] The unprecedented cuts to Medicaid in the 2025 reconciliation law and failure to extend Premium Tax Credit enhancements, which help people purchase health insurance through the Affordable Care Act (ACA) marketplace, mean that roughly 15 million people will lose their health coverage, based on estimates by the Congressional Budget Office.[7] Historic cuts to SNAP are projected to terminate or substantially cut SNAP food benefits for about 4 million people in a typical month once the changes are fully implemented, based on Congressional Budget Office (CBO) estimates.[8] Early data show that, as expected, millions of people are losing health coverage, and impacts on SNAP participation are even larger than predicted.[9]
The Administration's tariffs have raised the price of imported goods, including clothes, cars, food, and inputs for other goods, making it more expensive for families to get to work, put food on the table, and buy clothes for their children. Families with the lowest incomes have been hardest hit by tariff-driven price increases as well as by the reconciliation law's changes, seeing the largest decline in household resources measured as a share of their income.[10] And families now have to contend with yet another expense: high gas prices stemming from the war in Iran. The retail price for regular gasoline in recent months has been about 20 to 40 percent higher than one year prior.[11]
Making life more manageable for families in the face of these affordability challenges can take the form of reducing the price of goods, increasing people's incomes, or both. Policymakers have proven tools that can increase families' incomes, which can make essentials more affordable even if the costs for specific items do not drop, by increasing their purchasing power. Expanding the Child Tax Credit for children in families with lower incomes would boost families' after-tax income and let them spend money on the items their families most need.
2025 Reconciliation Law's Child Tax Credit Changes Leave Behind 19 Million Children and Deny Credit to Children With Immigrant Parents
The Child Tax Credit can be a powerful tool when it is structured to better reach families with lower incomes. However, the structure of the Child Tax Credit has long-standing flaws -- giving children in families with lower incomes a smaller credit than families with higher incomes. The reconciliation law did nothing to improve this design, so these flaws remain:
* The credit phases in slowly at 15 cents per dollar earned, regardless of the number of children in a family, meaning that many lower-income families with two or three children receive the same total credit as a family with one child at the same earnings level, and others receive only a modestly higher total amount;
* Families receive no credit for income earned below $2,500; and
* There is a lower maximum credit amount that families can receive as a refund -- $1,700 per child for tax year 2026 (compared to the $2,200 per-child credit amount available to families with higher incomes).
Republican policymakers chose not to address these structural issues with the credit in the 2025 reconciliation law and instead enacted changes that exacerbate the gap between the credit that families with lower incomes can receive and the credit that families with higher incomes can receive. The reconciliation law permanently increased the maximum credit from $2,000 to $2,200 per child, starting in tax year 2025, and indexed the credit amount for inflation starting in tax year 2026.[12] Because the law left in place the lower maximum credit that families could receive as a refund -- $1,700 for tax year 2025, indexed for inflation -- the reconciliation law widened the gap between these amounts from $300 to $500 per child.[13]
The reconciliation law also took the credit away from children who are U.S. citizens or have a lawful immigration status unless at least one of their parents has an SSN.[14] This change is more restrictive than the 2017 law enacted by Republicans during the first Trump Administration, which took eligibility for the credit away from children who used an ITIN rather than an SSN.[15] Roughly 2.7 million children who are U.S. citizens would have their eligibility taken away by the reconciliation law, by one estimate.[16] Policymakers should reverse this new restrictive policy.
More Than 1 in 4 Children Are Excluded From the Full Value of the Child Tax Credit, With Black, Latine, and American Indian and Alaska Native Children Disproportionately Left Out
An estimated 19 million children under age 17 will receive less than the full $2,200 Child Tax Credit, or none at all, this year simply because their families have low or moderate incomes. This represents more than 1 in 4 children under age 17 across the country -- the vast majority of whom are in working families. For example, a single parent with two children would have to earn at least $34,150 for tax year 2026 to receive the full credit -- or about $16.42 per hour working 40 hours a week for a full 52 weeks (with no unpaid leave). That's more than the minimum wage in 46 states, and many people working for low pay are not offered 40 hours consistently each week or have access to paid leave.[17] A married couple with two children would have to earn at least $42,200.
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FIGURE 3: Black, Native American, and Latine Children Are Disproportionately Left Out of the Full Child Tax Credit
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Children under age 17 who are left out of the full credit include those whose families often face the effects of past and current discrimination and other barriers to opportunity that have left them overrepresented in low-paying work: more than half of Black children, more than 1 in 3 American Indian and Alaska Native children, and more than 1 in 3 Latine children are left out of the full credit. Roughly 1 in 5 white children and more than 1 in 6 Asian children also get less than the full credit. (See Figure 3; see Appendix Table 1 for estimates of these children by state.)
Children left out of the full credit have parents who work in a wide range of low-paid occupations throughout the country. They work in various jobs across the care sector, caring for other people's children as child care workers and teaching assistants, and caring for people who are sick or older as nursing assistants and personal care and home health aides. They also contribute to their communities as cashiers and construction workers. An estimated 776,000 children left out of the full credit have parents who are veterans and have family incomes low enough that they don't qualify for the full credit.[18]
The credit's structure disproportionately disadvantages children who live in rural (that is, non-metropolitan) communities. More than 1 in 3 children under age 17 living in rural communities would get less than the full $2,200 Child Tax Credit because their families' incomes are too low, while in metropolitan (metro) areas, a smaller but still substantial share -- more than 1 in 4 children under age 17 -- would get less than the full credit.[19] Families in rural communities are particularly hurt by the credit's flawed structure, largely because pay tends to be lower in rural areas; in 2024, median pay in rural areas was roughly 18 percent lower than in metro areas.[20]
Children in rural areas left out of the full credit reflect the racial diversity of rural communities across the country. Among children in rural areas who receive less than the full Child Tax Credit, about 16 percent are Latine, 15 percent are Black, and 8 percent are American Indian or Alaska Native -- each group overrepresented compared with their share of the rural population of children under age 17. About 56 percent of these children are white.[21]
The reconciliation law's changes to the credit largely left out children in families with low and moderate incomes despite evidence that additional income can make a meaningful difference for these children. Many studies on tax credits similar to the Child Tax Credit find evidence linking the additional income to improved health and educational outcomes during childhood, and increased educational attainment, employment, and earnings in young adulthood.[22] Evidence from a wide range of income support programs also shows another important benefit of strengthening families' economic security -- reducing involvement in the child welfare system.[23] (See text box, "Evidence Links Additional Income to Reduced Involvement in the Child Welfare System.")
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Evidence Links Additional Income to Reduced Involvement in the Child Welfare System
Evidence suggests income assistance for families with lower incomes is an effective tool for reducing child welfare involvement and supporting family stability. Risk for child maltreatment (abuse and/or neglect) is complex, and income support will not eliminate all cases. But material hardship predicts contact with the child welfare system overall, for families of all races, even after controlling for other risk factors.a And nearly three-quarters (71 percent) of families with children and low incomes reported experiencing at least one form of material hardship in 2023, such as not having enough food or having trouble paying their utility bill.b Income support, such as an expanded Child Tax Credit for children in families with low incomes, can improve families' economic security and stability.
A 2025 study using California administrative data estimated that for each additional $1,000 families are eligible for as a tax refund early in a child's life (after accounting for federal and state tax provisions), the likelihood that a child born into a household with low income has a substantiated referral to a state child protective services agency by age 3 is lower by 3 percent and protective effects persist through at least age 8.c Another study looked at short-term effects of tax refunds on child welfare involvement and found that state-level rates of maltreatment referrals fell 5 percent following issuance of state and federal tax refunds (16.8 fewer reports per 100,000 children in the five-week period after refund issuance) for each additional $1,000 in per-child refund issuance.d
Considering that income supports are associated with multiple beneficial effects for families and children, policymakers interested in improving outcomes for children, including through reduced child welfare involvement, should strongly consider ways to strengthen income assistance for families with lower incomes. One way to advance this goal is providing children in families with lower incomes the same Child Tax Credit that children in families with higher incomes get.
a Margaret M.C. Thomas and Jane Waldfogel, "What kind of 'poverty' predicts CPS contact: Income, material hardship, and differences among racialized groups," Children and Youth Services Review, Vol. 136, May 2022, https://doi.org/10.1016/j.childyouth.2022.106400. Controls included: child sex at birth; child low birthweight; mother U.S.-born status; child age, mother age; mother education level; mother housing status; mother marital/co-residence status; mother number of children; father's contact w/child; mother poor health status; mother depression.
b Based on the share of adults ages 18 to 64 with family incomes below 200 percent of the federal poverty level experiencing material hardship in the past 12 months relative to share of all adults ages 18 to 64, by presence of children younger than 18 in the household in Urban Institute's Well-Being and Basic Needs Survey, December 2023. Margot Crandall-Hollick et al., "An Expanded Child Tax Credit Could Help Low-Income Families Facing Material Hardships," Urban Institute, December 16, 2024, https://www.urban.org/research/publication/expanded-child-tax-credit-could-help-low-income-families-facing-material-hardships.
c Katherine Rittenhouse, "Income and Child Maltreatment: Evidence from a Discontinuity in Tax Benefits," Review of Economics and Statistics, December 2025, https://doi.org/10.1162/REST.a.1690.
d Nicole L. Kovski et al., "Short-Term Effects of Tax Credits on Rates of Child Maltreatment Reports in the United States," Pediatrics, Vol. 150, No. 1, July 2022, https://doi.org/10.1542/peds.2021-054939.
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Policymakers Should Help Improve Economic Security by Expanding Child Tax Credit for Families With Lower Incomes
One of the best ways to improve economic security for families with low and moderate incomes would be for policymakers to ensure that the 19 million children left out of the full Child Tax Credit are eligible for the full $2,200 amount that higher-income families receive (often referred to as making the credit "fully refundable"). Making the full $2,200 credit available to families with lower incomes would have a meaningful impact on child poverty, reducing the number of children in families with incomes below the poverty line by 1.2 million this year.[24]
To understand how this credit expansion would help a lower-income family, consider a single parent working part-time as a cashier and being paid $16,000, with a 3-year-old and a 7-year-old, who is struggling to pay their utility bills and afford gas to get to work. The family will receive a $2,025 Child Tax Credit for tax year 2026 under the reconciliation law -- the same amount they would have received under prior law. But if the family instead were eligible for the full Child Tax Credit, they would see their credit more than double -- to $4,400 -- better supporting them in meeting their children's basic needs.
Congress has made the full credit available to families with lower incomes before, with great success. The American Rescue Plan Act (ARPA) included a temporary change that provided children in families with lower incomes the same credit amount as families with higher incomes for tax year 2021. ARPA also increased the maximum credit to $3,600 per child under age 6 and $3,000 per child age 6-17 and provided part of the credit through monthly payments. This expanded credit played an important role in supporting families with lower incomes; the single-parent, two-child family described above would have received a $6,600 credit. Research done at the time showed that the vast majority of families with low and moderate incomes spent some or all of the additional income from the expanded Child Tax Credit on essentials like food, housing, utilities, and clothing.[25] Combined with other forms of pandemic relief, the expanded Child Tax Credit helped drive the child poverty rate down to record lows in 2021.[26]
The recent American Family Act (AFA) proposal, introduced by Representatives Rosa DeLauro and Susan DelBene, and Senator Michael Bennet and others, would also provide children in families with lower incomes the full credit amount, substantially reducing child poverty.[27] The bill would build on the 2021 expansion by updating the maximum credit levels to account for inflation since 2021 and introducing a baby bonus that would help families afford the costs of a new child during the first year of a child's life.
While policymakers should once again make the full Child Tax Credit available to families with lower incomes, a recent bipartisan alternative would make solid progress toward that goal by addressing some of the current credit's structural flaws. Just two years ago, in January 2024, legislation introduced by House Ways and Means Chair Jason Smith and then-Senate Finance Committee Chair Ron Wyden passed the House by a wide margin -- including votes from 169 House Republicans -- but Senate Republicans blocked the bill.[28] While not making the full credit available to all children in families with low incomes, it made significant progress through a couple of changes:
* It phased the credit in at 15 percent per child, rather than per family, ensuring that families with lower incomes would receive the same credit for each of their children, as higher-income families do, and removing the penalty for larger families.
* It increased, and then effectively ended, the lower maximum credit amount that can be refunded.
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FIGURE 4: Other Child Tax Credit Expansions Would Boost Incomes for 19 Million Children Left Out of Full Credit in Republican Reconciliation
Together, these reforms would have expanded the credit for more than 80 percent of the children who were left out of the full credit in its first year. When fully implemented, in 2025, the legislation would have reduced the number of children with incomes below the poverty line by half a million or more.[29]
To understand the Smith-Wyden legislation's potential impact, consider the family introduced above -- a single parent being paid $16,000, with two children. If policymakers had included the expansion as proposed in the bipartisan Smith-Wyden bill in the 2025 reconciliation law, the family's credit for tax year 2026 would have increased from $2,025 to $4,050. (See Figure 4.)
Another bipartisan bill sponsored by Senators Todd Young and Maggie Hassan proposes a more modest structural change that would phase in the credit starting at the first dollar of a family's earnings.[30] This proposal complements the Smith-Wyden bill; combining these proposals would further expand the credit for the children currently left out of the full credit.
Policymakers play a critical role in families' economic security. They should prioritize expanding the Child Tax Credit for families with low and moderate incomes, focusing limited resources where they will have the greatest impact -- on families with the greatest needs.
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Appendix table 1: More Than 19 Million Children Are Left Out of the 2025 Reconciliation Law's Full $2,200 Child Tax Credit and Would Benefit From a Fully Refundable Credit
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End Notes
[1] Brendan Duke, "A Framework to Evaluate Affordability Proposals," CBPP, June 15, 2026, https://www.cbpp.org/research/federal-budget/a-framework-to-evaluate-affordability-proposals.
[2] CBPP analysis of Survey of Income and Program Participation (SIPP) data for 2023. SIPP data show median annual income in 2023 was $80,160.
[3] Kristin F. Butcher and Diane Whitmore Schanzenbach, "Most Workers in Low-Wage Labor Market Work Substantial Hours, in Volatile Jobs," CBPP, July 24, 2018, https://www.cbpp.org/research/poverty-and-inequality/most-workers-in-low-wage-labor-market-work-substantial-hours-in. Lauren Bauer, Chloe East, and Olivia Howard, "Low-income workers experience--by far--the most earnings and work hours instability," Brookings, January 9, 2025, https://www.brookings.edu/articles/low-income-workers-experience-by-far-the-most-earnings-and-work-hours-instability/.
[4] "The cost of essential goods and services is rising faster than earnings. Since 2017, average earnings have grown about 43 percent nationwide. Over the same period, home sale prices have increased 81 percent and rents 54 percent. The lowest-cost Silver health plan on the Affordable Care Act Marketplace has risen 77 percent, and child care costs have grown dramatically." Urban Institute, "The American Affordability Tracker," updated April 2, 2026, https://www.urban.org/data-tools/american-affordability-tracker.
[5] CBPP analysis of Bureau of Labor Statistics Consumer Expenditure Survey (CE) data for 2024 at https://www.bls.gov/cex/tables/calendar-year/mean-item-share-average-standard-error/cu-income-deciles-before-taxes-2024.xlsx. CE data show median annual income in 2024 was $74,000. The listed categories do not include other essentials, such as clothes or household items like diapers, paper towels, and cleaning supplies.
[6] Brendan Duke, "Trump Administration, Congressional Republicans Are Worsening Affordability Challenges in Many Ways," CBPP, December 18, 2025, https://www.cbpp.org/research/poverty-and-inequality/trump-administration-congressional-republicans-are-worsening.
[7] See "Taking Away Health Care: Huge coverage losses, higher costs for consumers, and new costs shifted to states" in "A Record of Historic Harm in the First Year of Trump's Second Term," January 14, 2026, CBPP, https://www.cbpp.org/research/federal-budget/a-record-of-historic-harm-in-the-first-year-of-trumps-second-term#huge-coverage-losses-cbpp-anchor.
[8] CBPP, "By the Numbers: Harmful Republican Megabill Takes Food Assistance Away From Millions of People," updated August 14, 2025, https://www.cbpp.org/research/food-assistance/by-the-numbers-harmful-republican-megabill-takes-food-assistance-away-from.
[9] Claire Heyison, "Nearly 3 Million Fewer People Secured Marketplace Coverage After Republican Health Care Cuts, New Data Show," CBPP, June 30, 2026, https://www.cbpp.org/blog/nearly-3-million-fewer-people-secured-marketplace-coverage-after-republican-health-care-cuts; Dottie Rosenbaum, Joseph Llobrera, Catlin Nchanko, and Luis Nunez, "SNAP Tracker: People Are Losing Food Assistance as the Republican Megabill Is Implemented," CBPP, May 18, 2026, https://www.cbpp.org/research/food-assistance/snap-tracker-people-are-losing-food-assistance-as-the-republican-megabill.
[10] See the December Data Update (the latest available data), which reflects tariff policy as of November 17, 2025, at The Budget Lab, "Combined Distributional Effects of the One Big Beautiful Bill Act and of Tariffs," August 12, 2025, https://budgetlab.yale.edu/research/combined-distributional-effects-one-big-beautiful-bill-act-and-tariffs-0.
[11] We looked at monthly average prices for retail gasoline (regular gasoline, all areas, all formulations) for March, April, May, and June 2026 and calculated the percent change relative to average prices for those months in 2025 using data from the U.S. Energy Information Administration, https://www.eia.gov/petroleum/gasdiesel/?hl=en.
[12] The 2017 tax law temporarily increased the maximum credit amount from $1,000 to $2,000 per child; this increase would have expired at the end of tax year 2025 in the absence of the 2025 reconciliation law.
[13] The $2,200 maximum credit amount and the $1,700 lower maximum credit amount are both indexed but use different parameters to adjust for inflation. Based on CBO projections as of February 2026, the difference is expected to be between $500 and $600 per child in future years. Prior to the 2025 reconciliation law, the $2,000 maximum credit was not indexed to inflation while the lower maximum credit was indexed. This meant that over time the lower cap amount would have equalized with the maximum credit for which middle- and upper-income families were eligible. Depending on the inflation adjustments in a given year, the maximum credit and lower maximum credit amounts may stay the same; for both tax years 2025 and 2026, the maximum credit was $2,200 and the lower maximum credit was $1,700. CBO Key Budget and Economic Data, Tax Parameters and Effective Marginal Tax Rates, Feb 2026, https://www.cbo.gov/data/budget-economic-data#10.
[14] Children ineligible for the Child Tax Credit based on immigration status are eligible for the much smaller $500 credit for other dependents, but it only offsets income tax liability -- that is, it cannot be paid as a refund -- and many families with lower incomes cannot receive it because they owe no federal income tax due to their low income.
[15] The 2017 tax law newly required children claimed for the Child Tax Credit to have an SSN, which denied eligibility for the credit for an estimated 675,000 to 1 million children. Stephanie Hingtgen, "Recovery Bill Should Restore Child Tax Credit to Children Without Social Security Numbers," CBPP, August 13, 2021, https://www.cbpp.org/blog/recovery-bill-should-restore-child-tax-credit-to-children-without-social-security-numbers;Marco Guzman, "Inclusive Child Tax Credit Reform Would Restore Benefit to 1 Million Young 'Dreamers,'" Institute on Taxation and Economic Policy, April 27, 2021, https://itep.org/inclusive-child-tax-credit-reform-would-restore-benefit-to-1-million-young-dreamers/.
[16] The 2.7 million figure is a rough estimate due to data limitations. It overstates the number of children who would lose eligibility from the 2025 reconciliation law by counting all children without accounting for a family's income, and thus their eligibility for the credits. But it also understates the number of children who would lose eligibility by counting only children who are U.S. citizens but who lack a parent with an SSN. Children who are not U.S. citizens yet have a lawful immigration status and have an SSN will also lose eligibility if they do not have at least one parent with an SSN, and are not included in the 2.7 million figure. Julia Gelatt, Migration Policy Institute, November 2025, https://www.linkedin.com/posts/julia-gelatt-86105953_millions-of-us-kids-live-in-mixed-status-activity-7394407282366681090-bHou.
[17] Thirty states and the District of Columbia have a state minimum wage higher than the federal minimum wage. California, Connecticut, parts of New York, and Washington, as well as the District of Columbia, have a minimum wage higher than $16.42 per hour. See Department of Labor, "Consolidated Minimum Wage Table," updated July 1, 2026, https://www.dol.gov/agencies/whd/mw-consolidated. Lauren Bauer, Chloe East, and Olivia Howard, "Low-income workers experience--by far--the most earnings and work hours instability," Brookings, January 9, 2025, https://www.brookings.edu/articles/low-income-workers-experience-by-far-the-most-earnings-and-work-hours-instability/; Bureau of Labor Statistics, "Table 6. Selected paid leave benefits: Access, March 2025," https://www.bls.gov/news.release/ebs2.t06.htm; Bureau of Labor Statistics, "Access to and Use of Leave Summary -- 2017-2018; Data From the American Time Use Survey," https://www.bls.gov/news.release/pdf/leave.pdf.
[18] Tax Policy Center (TPC) national estimate for 2026 allocated by parents' veteran status based on CBPP analysis of American Community Survey (ACS) data for 2022-2024, using 2026 tax parameters and incomes adjusted to 2026 projected levels. We use February 2026 Congressional Budget Office projections to adjust income for inflation through 2026 and further adjust earnings and rental, interest, and dividend income for real growth. TPC, "T25-0258 - Distribution of Tax Units, Children, and Dependents by Size of Child Tax Credit (CTC), 2026," August 5, 2025, https://taxpolicycenter.org/model-estimates/T25-0258.
[19] Under the Office of Management and Budget's 2023 delineations, metro areas are generally defined as cities of 50,000 or more people and surrounding counties that contain or are strongly connected to that city by commuting. All other areas are considered non-metro. We use rural and non-metro interchangeably. Tax Policy Center (TPC) national estimate for 2026 allocated by metropolitan/non-metropolitan area based on CBPP analysis of American Community Survey data for 2022-2024, using 2026 tax parameters and incomes adjusted to 2026 projected levels, and Missouri Census Data Center's Geocorr 2022 application.
[20] Based on median earnings for full-time, year-round workers, ACS data for 2024, https://data.census.gov/table?q=S2001&g=010XXC0US_010XXH0US&y=2024.
[21] Tax Policy Center (TPC) national estimate for 2026 allocated by race or ethnicity and metropolitan/nonmetropolitan area based on CBPP analysis of American Community Survey (ACS) data for 2022-2024, using 2026 tax parameters and incomes adjusted to 2026 projected levels, and Missouri Census Data Center's Geocorr 2022 application.
[22] Katherine Michelmore, "Tax Credits and Child Outcomes: Lessons from the U.S., U.K., and Canada," NBER, May 2025, https://www.nber.org/papers/w33822.
[23] Victoria Hunter Gibney and Urvi Patel, "Income Support Reduces Child Maltreatment, Research From Multiple Programs Suggests," CBPP, April 29, 2026, https://www.cbpp.org/research/poverty-and-inequality/income-support-reduces-child-maltreatment-research-from-multiple.
[24] Poverty estimate uses the Supplemental Poverty Measure, which counts more forms of income than the official poverty measure, among other differences. CBPP analysis of March 2025 Current Population Survey, using 2026 tax parameters and incomes adjusted to 2026 projected levels. We use February 2026 Congressional Budget Office projections to adjust income for inflation through 2026 and further adjust earnings and rental, interest, and dividend income for real growth.
[25] Claire Zippel, "9 in 10 Families With Low Incomes Are Using Child Tax Credits to Pay for Necessities, Education," CBPP, October 21, 2021, https://www.cbpp.org/blog/9-in-10-families-with-low-incomes-are-using-child-tax-credits-to-pay-for-necessities-education.
[26] Chuck Marr, Samantha Jacoby, Kris Cox, and Stephanie Hingtgen, "What a Better Tax Bill Would Look Like," CBPP, April 23, 2025, https://www.cbpp.org/research/federal-tax/what-a-better-tax-bill-would-look-like.
[27] H.R. 2763, "American Family Act," https://www.congress.gov/bill/119th-congress/house-bill/2763?s=2&r=7&hl=american+families+act; S. 1393, "American Family Act," https://www.congress.gov/bill/119th-congress/senate-bill/1393?s=2&r=8&hl=american+families+act. Christopher Yera, Sophie Collyer, Megan Curran, and David Harris, "What Could 2024 Child Poverty Rates Have Looked Like Had an Expanded Child Tax Credit Been in Place?" Center on Poverty and Social Policy at Columbia University, September 9, 2025, https://povertycenter.columbia.edu/sites/povertycenter.columbia.edu/files/content/Publications/What-Could-2024-Child-Poverty-Rates-Have-Looked-Like-CPSP-2025.pdf.
[28] H.R. 7024, "Tax Relief for American Families and Workers Act of 2024," https://www.congress.gov/bill/118th-congress/house-bill/7024. The bill stalled and then failed to pass in the Senate in 2024.
[29] The legislation also allowed families to use their prior year's earnings to calculate the credit in cases where their earnings declined in the current year, such as from cuts to their work hours, job loss, or reduced income due to someone having to step out of the workforce to attend to caregiving needs. The unfortunate attacks on this provision, referred to as a "lookback," failed to account for reasons that a person's earnings might decline in a given year that are often outside their control including structural characteristics of the low-paid labor market, like a lack of paid family or medical leave and erratic hours that make finding stable child care difficult. Kris Cox et al., "About 16 Million Children in Low-Income Families Would Gain in First Year of Bipartisan Child Tax Credit Expansion," CBPP, January 22, 2024, https://www.cbpp.org/research/federal-tax/about-16-million-children-in-low-income-families-would-gain-in-first-year-of. The bill proposed temporary expansions of the credit for tax years 2023, 2024, and 2025.
[30] S. 3596, "Stronger Start for Working Families Act," https://www.congress.gov/bill/119th-congress/senate-bill/3596/text.
* * *
Kris Cox, Director of Federal Tax Policy
Stephanie Hingtgen, Senior Research Analyst
Kiran Rachamallu, Former Staff
* * *
Original text here: https://www.cbpp.org/research/federal-tax/to-strengthen-economic-security-policymakers-should-expand-the-child-tax
[Category: ThinkTank]
CSIS Issues Commentary: Come Hague or High Seas: China's Environmental Legacy in the South China Sea
WASHINGTON, July 28 -- The Center for Strategic and International Studies issued the following commentary on July 27, 2026, by Monica Sato, research associate with the Asia Maritime Transparency Initiative:
* * *
Come Hague or High Seas: China's Environmental Legacy in the South China Sea
Following the 10th anniversary of the South China Sea tribunal ruling, the United States and several other countries renewed their support for the Philippines and its landmark legal victory against China's expansive maritime claims. Like much of the past decade's discussion on the South China Sea, these statements ... Show Full Article WASHINGTON, July 28 -- The Center for Strategic and International Studies issued the following commentary on July 27, 2026, by Monica Sato, research associate with the Asia Maritime Transparency Initiative: * * * Come Hague or High Seas: China's Environmental Legacy in the South China Sea Following the 10th anniversary of the South China Sea tribunal ruling, the United States and several other countries renewed their support for the Philippines and its landmark legal victory against China's expansive maritime claims. Like much of the past decade's discussion on the South China Sea, these statementstouched upon sovereignty issues and the rejection of China's nine-dash line. However, another aspect of the ruling deserves attention: By failing to safeguard the marine environment of the South China Sea, China violated its obligations under the United Nations Convention on the Law of the Sea (UNCLOS). This legacy of environmental degradation should inform assessments of whether China is prepared to serve as a responsible leader in similar institutions, as it gradually positions itself at the forefront of another landmark treaty under UNCLOS.
After decades of negotiations, the Agreement on Biodiversity Beyond National Jurisdiction (BBNJ), also known as the High Seas Treaty. entered into force globally on January 17, 2026. This agreement establishes the first legally binding framework for protecting, conserving, and sustainably managing biodiversity in the high seas, which make up roughly two-thirds of the ocean. Just a day before the BBNJ took effect, China submitted an official bid to host the BBNJ permanent secretariat seat in its coastal city of Xiamen, offering a generous funding package and promoting itself as a longtime supporter of the treaty. It is therefore paradoxical that while China continues to reject the South China Sea arbitral award as "null and void," it has simultaneously taken deliberate steps toward becoming a leader in global ocean governance under the same convention.
A Decade of Environmental Degradation in the South China Sea
In 2016, the tribunal concluded that China had failed "to protect and preserve the marine environment" of the South China Sea by constructing artificial islands and failing to prevent Chinese fishers from harvesting endangered and vulnerable marine species. In doing so, Beijing violated its obligations under Articles 192 and 194 of UNCLOS.
Although the environmental findings represented only one component of the Philippines' submission, they have gradually become a more prominent feature of the country's South China Sea policy under President Ferdinand "Bongbong" Marcos Jr. Philippine officials even discussed pursuing a second arbitration case or raising the issue before the UN General Assembly in response to China's continued environmental negligence and aggressive actions against Philippine vessels in the South China Sea.
Since the ruling, the tribunal's findings have done little to halt further environmental degradation. A decade later, the marine environment of the South China Sea remains largely unprotected, while state activities that contribute to further damage have continued--and, in some respects, accelerated.
The tribunal's first major environmental finding centered on China's island-building activities. Through dredging and land filling, China had irreparably damaged approximately 3,170 acres of coral reefs by 2016. These processes involve cutter suction dredgers slicing through reef structures before pumping accumulated sediment via floating pipelines to create artificial islands. Entire reef ecosystems are effectively buried beneath the reclaimed land, and leftover sediment can float toward surrounding areas, killing other marine life.
Although China's large-scale island-building campaign appeared to conclude around 2017, satellite imagery revealed dredging at Antelope Reef in the Paracel Islands beginning in October 2025. Measuring roughly 1,500 acres, the project is on pace to become China's largest artificial island in the South China Sea. As a result, the estimated coral reef destruction caused by China's island-building activities has now risen to approximately 6,224 acres--about half the size of Manhattan in New York City.
The tribunal's second environmental finding concerned harmful fishing practices carried out by Chinese fishers. Giant clam harvesting was deemed "especially problematic" because of clams' vital role in maintaining reef ecosystems and the destructive method used to extract them. Fishers drag specially designed brass propellers across coral reefs in semicircular patterns to expose buried clams, leaving behind distinct arc-shaped scars documented through satellite imagery. Despite supposed protection by the Convention on International Trade in Endangered Species of Wild Fauna and Flora from exploitation and illegal trade, the giant clam's classification changed from "vulnerable" to "critically endangered" in 2024. And although Chinese authorities cracked down on the sale of giant clams in 2017, evidence indicates that harvesting continued well into 2019, and giant clam products are still being sold on the black market for high prices.
As it stands, China's island-building and giant clam harvesting activities have destroyed an estimated 22,759 acres of coral reef across the South China Sea. This figure combines overall reef destruction caused by land filling and dredging (6,224 acres) and the damage left behind by giant clam harvesting methods (16,535 acres). Despite this record, Beijing is seeking to position itself as a champion of environmental protection under the BBNJ.
Ocean Governance or Selective Governance?
In recent years, Beijing has sought a larger role in shaping how the world's oceans are to be managed. China became one of the first countries to ratify the BBNJ in December 2025, signing the agreement on the day it opened for signature. The following month, it submitted its bid to host the secretariat seat, contesting bids already made by Belgium and Chile. This push extends beyond the BBNJ; under its 15th Five-Year Plan, China has elevated global ocean governance as a national priority. And at this year's Meeting of States Parties to UNCLOS, China's deputy permanent representative to the United Nations, Sun Lei, emphasized that his country highly values "the conservation and rational use of marine resources," highlighting how China has designated approximately 37 million acres of marine conservation red lines and established 353 marine protected areas.
China's ongoing campaign to host the BBNJ secretariat, together with its continued emphasis on marine protection, should not be viewed in isolation from its environmental record. Its actions reflect another example of Beijing's selective use of UNCLOS to advance its national interests in the maritime domain. In some cases, China embraces aspects of UNCLOS that reinforce its image as a responsible actor and upholder of international law, like pursuing much sought-after seabed mining efforts through the UNCLOS-established International Seabed Authority. At the same time, it continues to reject other aspects that do not support its actions in disputed areas, like disregarding the tribunal's ruling on the nine-dash line as contrary to international law. This selective approach raises questions about the type of leadership Beijing intends to exercise as BBNJ secretariat, especially as it appears to treat the South China Sea as an exception to its rules. During the final negotiations of the BBNJ, China fought to have the South China Sea explicitly excluded from its scope, despite the presence of a pocket of high seas in the center of the body of water. China's arguments were ultimately blocked by strong opposition from other countries.
Beijing employed a similar strategy in October 2025, when it unilaterally announced plans to establish a marine nature reserve covering more than 8,600 acres around the disputed Scarborough Shoal. In line with its biodiversity efforts, the National Forestry and Grassland Administration stated that coral reefs were the reserve's main target of protection. The Philippine government quickly condemned the proposal as "a clear pretext towards eventual occupation" rather than a genuine conservation initiative, amid increasing tensions between the two countries at Scarborough Shoal. Ultimately, the proposal was largely symbolic, as years of China's giant clam harvesting had already severely damaged the feature's reef ecosystem, leaving little of the marine habitat left to protect.
While the participation of maritime powers is necessary for the success of international conservation efforts, taking up the mantle carries expectations of credibility. In January 2027, the Conference of Parties (COP), consisting of UNCLOS member states, will make the important decision on who will host the BBNJ's secretariat seat. Two-thirds majority by secret ballot is needed to elect the new secretariat, which will act as the administrative and logistical support system to the COP. As states consider China's bid and evaluate its broader role in shaping the future of ocean governance, its environmental record in the South China Sea must not be treated as a separate issue. Giving China a leadership seat now, when it has shown that it does not consistently follow established conventions under international law, ultimately weakens the principles of the BBNJ and global ocean governance as a whole.
* * *
Monica Sato is a research associate with the Asia Maritime Transparency Initiative at the Center for Strategic and International Studies in Washington, D.C.
* * *
Original text here: https://www.csis.org/analysis/come-hague-or-high-seas-chinas-environmental-legacy-south-china-sea
[Category: ThinkTank]
* * *
Come Hague or High Seas: China's Environmental Legacy in the South China Sea
Following the 10th anniversary of the South China Sea tribunal ruling, the United States and several other countries renewed their support for the Philippines and its landmark legal victory against China's expansive maritime claims. Like much of the past decade's discussion on the South China Sea, these statements ... Show Full Article WASHINGTON, July 28 -- The Center for Strategic and International Studies issued the following commentary on July 27, 2026, by Monica Sato, research associate with the Asia Maritime Transparency Initiative: * * * Come Hague or High Seas: China's Environmental Legacy in the South China Sea Following the 10th anniversary of the South China Sea tribunal ruling, the United States and several other countries renewed their support for the Philippines and its landmark legal victory against China's expansive maritime claims. Like much of the past decade's discussion on the South China Sea, these statementstouched upon sovereignty issues and the rejection of China's nine-dash line. However, another aspect of the ruling deserves attention: By failing to safeguard the marine environment of the South China Sea, China violated its obligations under the United Nations Convention on the Law of the Sea (UNCLOS). This legacy of environmental degradation should inform assessments of whether China is prepared to serve as a responsible leader in similar institutions, as it gradually positions itself at the forefront of another landmark treaty under UNCLOS.
After decades of negotiations, the Agreement on Biodiversity Beyond National Jurisdiction (BBNJ), also known as the High Seas Treaty. entered into force globally on January 17, 2026. This agreement establishes the first legally binding framework for protecting, conserving, and sustainably managing biodiversity in the high seas, which make up roughly two-thirds of the ocean. Just a day before the BBNJ took effect, China submitted an official bid to host the BBNJ permanent secretariat seat in its coastal city of Xiamen, offering a generous funding package and promoting itself as a longtime supporter of the treaty. It is therefore paradoxical that while China continues to reject the South China Sea arbitral award as "null and void," it has simultaneously taken deliberate steps toward becoming a leader in global ocean governance under the same convention.
A Decade of Environmental Degradation in the South China Sea
In 2016, the tribunal concluded that China had failed "to protect and preserve the marine environment" of the South China Sea by constructing artificial islands and failing to prevent Chinese fishers from harvesting endangered and vulnerable marine species. In doing so, Beijing violated its obligations under Articles 192 and 194 of UNCLOS.
Although the environmental findings represented only one component of the Philippines' submission, they have gradually become a more prominent feature of the country's South China Sea policy under President Ferdinand "Bongbong" Marcos Jr. Philippine officials even discussed pursuing a second arbitration case or raising the issue before the UN General Assembly in response to China's continued environmental negligence and aggressive actions against Philippine vessels in the South China Sea.
Since the ruling, the tribunal's findings have done little to halt further environmental degradation. A decade later, the marine environment of the South China Sea remains largely unprotected, while state activities that contribute to further damage have continued--and, in some respects, accelerated.
The tribunal's first major environmental finding centered on China's island-building activities. Through dredging and land filling, China had irreparably damaged approximately 3,170 acres of coral reefs by 2016. These processes involve cutter suction dredgers slicing through reef structures before pumping accumulated sediment via floating pipelines to create artificial islands. Entire reef ecosystems are effectively buried beneath the reclaimed land, and leftover sediment can float toward surrounding areas, killing other marine life.
Although China's large-scale island-building campaign appeared to conclude around 2017, satellite imagery revealed dredging at Antelope Reef in the Paracel Islands beginning in October 2025. Measuring roughly 1,500 acres, the project is on pace to become China's largest artificial island in the South China Sea. As a result, the estimated coral reef destruction caused by China's island-building activities has now risen to approximately 6,224 acres--about half the size of Manhattan in New York City.
The tribunal's second environmental finding concerned harmful fishing practices carried out by Chinese fishers. Giant clam harvesting was deemed "especially problematic" because of clams' vital role in maintaining reef ecosystems and the destructive method used to extract them. Fishers drag specially designed brass propellers across coral reefs in semicircular patterns to expose buried clams, leaving behind distinct arc-shaped scars documented through satellite imagery. Despite supposed protection by the Convention on International Trade in Endangered Species of Wild Fauna and Flora from exploitation and illegal trade, the giant clam's classification changed from "vulnerable" to "critically endangered" in 2024. And although Chinese authorities cracked down on the sale of giant clams in 2017, evidence indicates that harvesting continued well into 2019, and giant clam products are still being sold on the black market for high prices.
As it stands, China's island-building and giant clam harvesting activities have destroyed an estimated 22,759 acres of coral reef across the South China Sea. This figure combines overall reef destruction caused by land filling and dredging (6,224 acres) and the damage left behind by giant clam harvesting methods (16,535 acres). Despite this record, Beijing is seeking to position itself as a champion of environmental protection under the BBNJ.
Ocean Governance or Selective Governance?
In recent years, Beijing has sought a larger role in shaping how the world's oceans are to be managed. China became one of the first countries to ratify the BBNJ in December 2025, signing the agreement on the day it opened for signature. The following month, it submitted its bid to host the secretariat seat, contesting bids already made by Belgium and Chile. This push extends beyond the BBNJ; under its 15th Five-Year Plan, China has elevated global ocean governance as a national priority. And at this year's Meeting of States Parties to UNCLOS, China's deputy permanent representative to the United Nations, Sun Lei, emphasized that his country highly values "the conservation and rational use of marine resources," highlighting how China has designated approximately 37 million acres of marine conservation red lines and established 353 marine protected areas.
China's ongoing campaign to host the BBNJ secretariat, together with its continued emphasis on marine protection, should not be viewed in isolation from its environmental record. Its actions reflect another example of Beijing's selective use of UNCLOS to advance its national interests in the maritime domain. In some cases, China embraces aspects of UNCLOS that reinforce its image as a responsible actor and upholder of international law, like pursuing much sought-after seabed mining efforts through the UNCLOS-established International Seabed Authority. At the same time, it continues to reject other aspects that do not support its actions in disputed areas, like disregarding the tribunal's ruling on the nine-dash line as contrary to international law. This selective approach raises questions about the type of leadership Beijing intends to exercise as BBNJ secretariat, especially as it appears to treat the South China Sea as an exception to its rules. During the final negotiations of the BBNJ, China fought to have the South China Sea explicitly excluded from its scope, despite the presence of a pocket of high seas in the center of the body of water. China's arguments were ultimately blocked by strong opposition from other countries.
Beijing employed a similar strategy in October 2025, when it unilaterally announced plans to establish a marine nature reserve covering more than 8,600 acres around the disputed Scarborough Shoal. In line with its biodiversity efforts, the National Forestry and Grassland Administration stated that coral reefs were the reserve's main target of protection. The Philippine government quickly condemned the proposal as "a clear pretext towards eventual occupation" rather than a genuine conservation initiative, amid increasing tensions between the two countries at Scarborough Shoal. Ultimately, the proposal was largely symbolic, as years of China's giant clam harvesting had already severely damaged the feature's reef ecosystem, leaving little of the marine habitat left to protect.
While the participation of maritime powers is necessary for the success of international conservation efforts, taking up the mantle carries expectations of credibility. In January 2027, the Conference of Parties (COP), consisting of UNCLOS member states, will make the important decision on who will host the BBNJ's secretariat seat. Two-thirds majority by secret ballot is needed to elect the new secretariat, which will act as the administrative and logistical support system to the COP. As states consider China's bid and evaluate its broader role in shaping the future of ocean governance, its environmental record in the South China Sea must not be treated as a separate issue. Giving China a leadership seat now, when it has shown that it does not consistently follow established conventions under international law, ultimately weakens the principles of the BBNJ and global ocean governance as a whole.
* * *
Monica Sato is a research associate with the Asia Maritime Transparency Initiative at the Center for Strategic and International Studies in Washington, D.C.
* * *
Original text here: https://www.csis.org/analysis/come-hague-or-high-seas-chinas-environmental-legacy-south-china-sea
[Category: ThinkTank]
Manhattan Institute: 'Public University Boards and Artificial Intelligence'
NEW YORK, July 28 (TNSLrpt) -- The Manhattan Institute issued the following report on June 30, 2026, by Brian Boyd entitled "Public University Boards and Artificial Intelligence."
Here are excerpts:
* * *
Executive Summary
Many technologies help us do one specific thing: a hammer and a boat, for example, have an obvious function. Other technologies are general-purpose and can be put to many uses: electricity, oil, and the internet are important because of their versatility. A few technologies, such as writing, are capable of directly making us better at making new technologies. Artificial intelligence ... Show Full Article NEW YORK, July 28 (TNSLrpt) -- The Manhattan Institute issued the following report on June 30, 2026, by Brian Boyd entitled "Public University Boards and Artificial Intelligence." Here are excerpts: * * * Executive Summary Many technologies help us do one specific thing: a hammer and a boat, for example, have an obvious function. Other technologies are general-purpose and can be put to many uses: electricity, oil, and the internet are important because of their versatility. A few technologies, such as writing, are capable of directly making us better at making new technologies. Artificial intelligenceis a unique general technology that can be pruned for specific-use cases, including the development of more powerful technology.
Universities, like other key industries and organizations, are being and will continue to be significantly affected by AI. Because institutions of higher education exist to curate and foster thought, they face special opportunities and risks from AI's potential to both amplify and undermine human thinking.
AI's rising prominence comes at a precarious moment for institutions of higher education. A demographic cliff of fewer college-age students threatens enrollment and therefore program health and campus budgets.[1] Widespread public skepticism about the value of college multiplies those effects.[2] Many colleges will likely close in the coming years, following hundreds that have already closed over the past two decades.[3]
The boards of public universities, the ultimate governing authority of these sprawling, essential institutions, must be prepared to navigate these challenging times. This report considers what boards of public universities can do to meet the moment.
First, we clarify the terms under consideration: What is AI, and what is the university?
Second, we take up a helpful image of the university offered by Niall Ferguson, "the cloister and the starship," and expand it to illustrate the principles that should guide universities. If the humanities refocus on their core mission to form free and virtuous citizens, while the sciences and applied disciplines treat AI as a tool that could benefit the commonweal, then public universities can stay true to their long-standing mission while leading their states into the future.
Third, we look at specific policies for the broader university, including questions of academic integrity and AI-use disclosure.
Introduction: Setting the Terms
What Do We Mean by "AI"?
In January 2026, leading AI company Anthropic described the latest version of its chatbot Claude as "a genuinely novel kind of entity in the world" with "emotional states" and "existential questions" of its own.[4] A more muted take on AI, which we will follow in this report, comes from Microsoft research scientist Jaron Lanier. He argues that the best way to conceive of AI is as a "novel form of social collaboration."[5] The best metaphor to describe AI is not an alien mind made out of neural networks but a vast, dark forest interconnected beneath the surface through mycelial tendrils and capable of sprouting novel fruit in response to our commands.[6]
"Artificial intelligence" is a capacious term. Distinguishing three uses of AI can illustrate the range of its functions. First is "analytical AI," which finds patterns in and matches new data to existing contexts. This has a wide range of applications, from automated fraud detection to the algorithm that selects the next TikTok video to keep a student's eyes glued to his phone.
Second is "generative AI," the ability of computer programs to make novel outputs that follow from patterns in enormous datasets. The most familiar examples are chatbot products like ChatGPT, Gemini, and Claude, which produce new text by predicting likely word sequences based on lessons gleaned from billions of documents. These chatbots are now ubiquitous on college campuses, and students use them to complete assignments in a variety of ways. Image and video generators like Google's Imagen and Veo are also increasingly popular and powerful.
Third is "agentic AI," which autonomously plans for and executes a given high-level task. This can be entirely digital, such as when Claude Cowork creates and edits PowerPoint presentations and Excel spreadsheets. Agentic AI is increasingly built in to robotics, like Boston Dynamics' dog-like Spot or human-shaped Atlas. A self-driving Waymo or Tesla is a type of agentic AI.
These three functions--analyzing data, creating new data, and taking actions--can overlap. They are all aspects of machine learning, which is the ability to derive patterns and capabilities from datasets rather than having every rule and response explicitly programmed (as in the case of traditional coding). Another way to think about this is through time. Analytical AI finds patterns in past data, generative AI produces something new in the present moment, and agentic AI pursues future-oriented goals.
We can imagine how a university might use all three capabilities to manage student enrollment. Analytical AI would examine past admissions data to identify which student characteristics predict retention and graduation. Generative AI could draft personalized outreach messages to admitted students based on their profiles and interests. An agentic AI system could plan and execute the entire recruitment and enrollment, deciding which students to contact, when, and through which channels, adjusting its approach based on response rates, and flagging cases that need human attention.
Importantly, these need not be three separate products. They could be integrated aspects of one AI program, which could assist with facilities management, return-on-investment studies, course offerings, financial aid, and much more.
All three of these AI functions are novel, and we should anticipate the technological development to continue apace. For instance, Anthropic is "delegating a growing share of AI development to AI systems themselves," with the result that more than 80% of the new lines added to Anthropic's code base are now written by Claude Code. OpenAI and Google DeepMind are similarly working toward self-improving systems.[7]
* * *
View full report at: https://manhattan.institute/article/public-university-boards-and-artificial-intelligence
[Category: ThinkTank]
Here are excerpts:
* * *
Executive Summary
Many technologies help us do one specific thing: a hammer and a boat, for example, have an obvious function. Other technologies are general-purpose and can be put to many uses: electricity, oil, and the internet are important because of their versatility. A few technologies, such as writing, are capable of directly making us better at making new technologies. Artificial intelligence ... Show Full Article NEW YORK, July 28 (TNSLrpt) -- The Manhattan Institute issued the following report on June 30, 2026, by Brian Boyd entitled "Public University Boards and Artificial Intelligence." Here are excerpts: * * * Executive Summary Many technologies help us do one specific thing: a hammer and a boat, for example, have an obvious function. Other technologies are general-purpose and can be put to many uses: electricity, oil, and the internet are important because of their versatility. A few technologies, such as writing, are capable of directly making us better at making new technologies. Artificial intelligenceis a unique general technology that can be pruned for specific-use cases, including the development of more powerful technology.
Universities, like other key industries and organizations, are being and will continue to be significantly affected by AI. Because institutions of higher education exist to curate and foster thought, they face special opportunities and risks from AI's potential to both amplify and undermine human thinking.
AI's rising prominence comes at a precarious moment for institutions of higher education. A demographic cliff of fewer college-age students threatens enrollment and therefore program health and campus budgets.[1] Widespread public skepticism about the value of college multiplies those effects.[2] Many colleges will likely close in the coming years, following hundreds that have already closed over the past two decades.[3]
The boards of public universities, the ultimate governing authority of these sprawling, essential institutions, must be prepared to navigate these challenging times. This report considers what boards of public universities can do to meet the moment.
First, we clarify the terms under consideration: What is AI, and what is the university?
Second, we take up a helpful image of the university offered by Niall Ferguson, "the cloister and the starship," and expand it to illustrate the principles that should guide universities. If the humanities refocus on their core mission to form free and virtuous citizens, while the sciences and applied disciplines treat AI as a tool that could benefit the commonweal, then public universities can stay true to their long-standing mission while leading their states into the future.
Third, we look at specific policies for the broader university, including questions of academic integrity and AI-use disclosure.
Introduction: Setting the Terms
What Do We Mean by "AI"?
In January 2026, leading AI company Anthropic described the latest version of its chatbot Claude as "a genuinely novel kind of entity in the world" with "emotional states" and "existential questions" of its own.[4] A more muted take on AI, which we will follow in this report, comes from Microsoft research scientist Jaron Lanier. He argues that the best way to conceive of AI is as a "novel form of social collaboration."[5] The best metaphor to describe AI is not an alien mind made out of neural networks but a vast, dark forest interconnected beneath the surface through mycelial tendrils and capable of sprouting novel fruit in response to our commands.[6]
"Artificial intelligence" is a capacious term. Distinguishing three uses of AI can illustrate the range of its functions. First is "analytical AI," which finds patterns in and matches new data to existing contexts. This has a wide range of applications, from automated fraud detection to the algorithm that selects the next TikTok video to keep a student's eyes glued to his phone.
Second is "generative AI," the ability of computer programs to make novel outputs that follow from patterns in enormous datasets. The most familiar examples are chatbot products like ChatGPT, Gemini, and Claude, which produce new text by predicting likely word sequences based on lessons gleaned from billions of documents. These chatbots are now ubiquitous on college campuses, and students use them to complete assignments in a variety of ways. Image and video generators like Google's Imagen and Veo are also increasingly popular and powerful.
Third is "agentic AI," which autonomously plans for and executes a given high-level task. This can be entirely digital, such as when Claude Cowork creates and edits PowerPoint presentations and Excel spreadsheets. Agentic AI is increasingly built in to robotics, like Boston Dynamics' dog-like Spot or human-shaped Atlas. A self-driving Waymo or Tesla is a type of agentic AI.
These three functions--analyzing data, creating new data, and taking actions--can overlap. They are all aspects of machine learning, which is the ability to derive patterns and capabilities from datasets rather than having every rule and response explicitly programmed (as in the case of traditional coding). Another way to think about this is through time. Analytical AI finds patterns in past data, generative AI produces something new in the present moment, and agentic AI pursues future-oriented goals.
We can imagine how a university might use all three capabilities to manage student enrollment. Analytical AI would examine past admissions data to identify which student characteristics predict retention and graduation. Generative AI could draft personalized outreach messages to admitted students based on their profiles and interests. An agentic AI system could plan and execute the entire recruitment and enrollment, deciding which students to contact, when, and through which channels, adjusting its approach based on response rates, and flagging cases that need human attention.
Importantly, these need not be three separate products. They could be integrated aspects of one AI program, which could assist with facilities management, return-on-investment studies, course offerings, financial aid, and much more.
All three of these AI functions are novel, and we should anticipate the technological development to continue apace. For instance, Anthropic is "delegating a growing share of AI development to AI systems themselves," with the result that more than 80% of the new lines added to Anthropic's code base are now written by Claude Code. OpenAI and Google DeepMind are similarly working toward self-improving systems.[7]
* * *
View full report at: https://manhattan.institute/article/public-university-boards-and-artificial-intelligence
[Category: ThinkTank]
AFPI-New Mexico: Washington Cut These Taxes, and Santa Fe Kept Them.
WASHINGTON, July 28 -- The America First Policy Institute issued the following statement on July 27, 2026:
* * *
AFPI-New Mexico: Washington Cut These Taxes, and Santa Fe Kept Them.
The America First Policy Institute's (AFPI) New Mexico state chapter released the following statement from New Mexico Executive Director, Vincent Torres, on the state's continued refusal to conform to the federal tax relief enacted under the Working Families Tax Cuts and to opt in to the Education Freedom Tax Credit:
"New Mexicans who earn tips, work overtime, or depend on Social Security shouldn't pay higher taxes ... Show Full Article WASHINGTON, July 28 -- The America First Policy Institute issued the following statement on July 27, 2026: * * * AFPI-New Mexico: Washington Cut These Taxes, and Santa Fe Kept Them. The America First Policy Institute's (AFPI) New Mexico state chapter released the following statement from New Mexico Executive Director, Vincent Torres, on the state's continued refusal to conform to the federal tax relief enacted under the Working Families Tax Cuts and to opt in to the Education Freedom Tax Credit: "New Mexicans who earn tips, work overtime, or depend on Social Security shouldn't pay higher taxessimply because Santa Fe refuses to align with the federal tax relief enacted under the Working Families Tax Cuts Act.
One full year after President Trump signed this relief into law, lawmakers had a bill on the table to deliver it, and they let it die.
With record revenues thanks to oil and gas, and historic budget reserves, our state has every opportunity to let hardworking families keep more of what they earn and expand educational opportunities through the Education Freedom Tax Credit. There is no fiscal excuse--only a political one. It's time for New Mexico to put our taxpayers, workers, seniors, and children first."
Learn more about AFPI New Mexico here (https://www.americafirstpolicy.com/state-chapter/america-first-new-mexico).
* * *
Original text here: https://www.americafirstpolicy.com/issues/afpinew-mexico-washington-cut-these-taxes-and-santa-fe-kept-them
[Category: ThinkTank]
* * *
AFPI-New Mexico: Washington Cut These Taxes, and Santa Fe Kept Them.
The America First Policy Institute's (AFPI) New Mexico state chapter released the following statement from New Mexico Executive Director, Vincent Torres, on the state's continued refusal to conform to the federal tax relief enacted under the Working Families Tax Cuts and to opt in to the Education Freedom Tax Credit:
"New Mexicans who earn tips, work overtime, or depend on Social Security shouldn't pay higher taxes ... Show Full Article WASHINGTON, July 28 -- The America First Policy Institute issued the following statement on July 27, 2026: * * * AFPI-New Mexico: Washington Cut These Taxes, and Santa Fe Kept Them. The America First Policy Institute's (AFPI) New Mexico state chapter released the following statement from New Mexico Executive Director, Vincent Torres, on the state's continued refusal to conform to the federal tax relief enacted under the Working Families Tax Cuts and to opt in to the Education Freedom Tax Credit: "New Mexicans who earn tips, work overtime, or depend on Social Security shouldn't pay higher taxessimply because Santa Fe refuses to align with the federal tax relief enacted under the Working Families Tax Cuts Act.
One full year after President Trump signed this relief into law, lawmakers had a bill on the table to deliver it, and they let it die.
With record revenues thanks to oil and gas, and historic budget reserves, our state has every opportunity to let hardworking families keep more of what they earn and expand educational opportunities through the Education Freedom Tax Credit. There is no fiscal excuse--only a political one. It's time for New Mexico to put our taxpayers, workers, seniors, and children first."
Learn more about AFPI New Mexico here (https://www.americafirstpolicy.com/state-chapter/america-first-new-mexico).
* * *
Original text here: https://www.americafirstpolicy.com/issues/afpinew-mexico-washington-cut-these-taxes-and-santa-fe-kept-them
[Category: ThinkTank]
Manhattan Institute: 'New York City's Migrant Crisis A Case Study of Welfare Magnet Effects'
NEW YORK, July 28 (TNSLrpt) -- The Manhattan Institute issued the following issue brief on July 23, 2026, by Stephen Eide entitled "New York City's Migrant Crisis A Case Study of Welfare Magnet Effects."
Here are excerpts:
* * *
Introduction
From 2021 to 2025, millions of migrants entered America via the southern border,[1] but the burden of accommodating them was not shared evenly by communities across the country. New York City, in particular, accepted a disproportionate number of migrants, with nearly 250,000 arriving in the city from spring 2022 through the end of 2025, mostly from Central ... Show Full Article NEW YORK, July 28 (TNSLrpt) -- The Manhattan Institute issued the following issue brief on July 23, 2026, by Stephen Eide entitled "New York City's Migrant Crisis A Case Study of Welfare Magnet Effects." Here are excerpts: * * * Introduction From 2021 to 2025, millions of migrants entered America via the southern border,[1] but the burden of accommodating them was not shared evenly by communities across the country. New York City, in particular, accepted a disproportionate number of migrants, with nearly 250,000 arriving in the city from spring 2022 through the end of 2025, mostly from Centraland South America.
Conventional explanations of migrant settlement do not explain New York City's experience. Many border cities were also burdened disproportionately, but New York City is not near the border. Cheap housing cannot easily be found in New York, nor can in-group affinity explain the city's appeal during the recent migrant wave. New York is a sanctuary city, but so are dozens of other cities. New York is a wealthy city but not fast-growing.
The city's uniquely generous homeless shelter system offers a more convincing explanation for the extensive migrant influx. New York provides shelter on demand, in all seasons, to families and single adults alike, regardless of immigration status. No city in America offers so expansive a "right to shelter."
Immigration scholars have long debated whether, and to what extent, generous public benefits induce migration. The migrant crisis in New York City presents a case study of this "welfare magnet" hypothesis, demonstrating that certain benefit programs, in some situations, can indeed affect migration. The crisis also offers a case study in how state and local benefit programs can influence the movement of low-income people more broadly.
The most important decisions over immigration policy will be made at the federal level. But as American communities continue to diverge more in their approaches to immigration, the dynamics of state and local benefit programs--which, as the New York City experience shows, can exert a magnet-like effect--will be increasingly important to understand.
Evidence Concerning Welfare Magnet Effects: Immigrants and Native Low-Income Households
Immigrants everywhere use taxpayer-funded benefit programs run by host countries. In the U.S., foreign-born households use such programs at a higher rate than native households.[2] Of the 10 American states with the largest share of foreign-born residents, seven are blue states known for their commitment to social expenditures.[3] But scholars dispute the degree to which access to such programs, relative to other push-and-pull factors, influences immigration flows via so-called welfare magnet effects.
Immigration scholars who dispute welfare magnet effects use two main lines of argument. First, they argue that the pull of benefit programs is weaker than many other factors that attract immigrants, such as employment opportunities.[4] Second, they point out that benefits are typically restricted to those with a certain status or tenure in the country.[5] For these scholars, the welfare magnet effect is portrayed as either impossible because new arrivals are not benefit-eligible, or real but insignificant in accounting for immigrants' motivations and movements.
Policy debate over immigration is informed not only by scholars' theoretical and empirical work on welfare magnets but also by moral values. Many who contribute to that debate believe that the U.S. benefits from an expansive immigration policy and that the welfare magnet thesis unfairly stigmatizes immigrants as rent-seekers.[6] But political officials tend to take the risk of welfare magnets seriously. The fact that most governments worldwide place restrictions on immigrant benefit access suggests that magnet effects may pose a real and significant risk.
Welfare magnets have also been long debated for the native low-income population. Native low-income households move less than immigrants but face fewer barriers to benefit access.[7] Indeed, they have a right to move to access other states' benefit programs. In Shapiro v. Thompson (1969), the Supreme Court prohibited states from imposing "durational residence requirements" on their cash welfare programs. Though such requirements were then, and are now, standard for immigrants and federal programs, the Court ruled that the constitutional right to travel bars states from requiring citizens to reside in-state for a year before accessing benefits.[8]
In the U.S., low-income natives are about as mobile as the nation as a whole.[9] Researchers who dispute welfare magnet effects for the native low-income population point out that they, like immigrants, have many reasons other than benefits for moving. Furthermore, they often move short distances, and the largest benefit differentials exist between states that are distant from one another.[10] One highly cited critical analysis of the welfare magnet thesis from the 1990s found that mobile low-income households mostly moved from one low-benefit southern state to another and rarely from a low-benefit southern state to a high-benefit northern state.[11] Of course, a principal reason for relative parity between neighboring states' benefit levels at that time might have been states' fear of welfare magnet effects.
Furthermore, even a relatively small number of low-income natives moving for benefit access still poses a risk to state and local budgets and economic competitiveness, because providing government services for this population is, almost by definition, expensive.
The risk of magnet effects is perhaps most acute when it comes to the homeless population. Data on the mobility of homeless Americans are more limited and less standardized than for the low-income population generally. But some communities have gathered mobility information through their regular "point in time" surveys of the homeless population and found substantial rates of non-locals.[12] Public officials tend to be, if anything, more concerned about magnet effects in the case of the homeless population than in the low-income population generally.[13] Homelessness can be very expensive to address because this population is not only extremely low-income but also beset by high rates of behavioral disorders.[14]
* * *
View full issue brief at: https://manhattan.institute/article/new-york-citys-migrant-crisis-a-case-study-of-welfare-magnet-effects
[Category: Think Tank]
Here are excerpts:
* * *
Introduction
From 2021 to 2025, millions of migrants entered America via the southern border,[1] but the burden of accommodating them was not shared evenly by communities across the country. New York City, in particular, accepted a disproportionate number of migrants, with nearly 250,000 arriving in the city from spring 2022 through the end of 2025, mostly from Central ... Show Full Article NEW YORK, July 28 (TNSLrpt) -- The Manhattan Institute issued the following issue brief on July 23, 2026, by Stephen Eide entitled "New York City's Migrant Crisis A Case Study of Welfare Magnet Effects." Here are excerpts: * * * Introduction From 2021 to 2025, millions of migrants entered America via the southern border,[1] but the burden of accommodating them was not shared evenly by communities across the country. New York City, in particular, accepted a disproportionate number of migrants, with nearly 250,000 arriving in the city from spring 2022 through the end of 2025, mostly from Centraland South America.
Conventional explanations of migrant settlement do not explain New York City's experience. Many border cities were also burdened disproportionately, but New York City is not near the border. Cheap housing cannot easily be found in New York, nor can in-group affinity explain the city's appeal during the recent migrant wave. New York is a sanctuary city, but so are dozens of other cities. New York is a wealthy city but not fast-growing.
The city's uniquely generous homeless shelter system offers a more convincing explanation for the extensive migrant influx. New York provides shelter on demand, in all seasons, to families and single adults alike, regardless of immigration status. No city in America offers so expansive a "right to shelter."
Immigration scholars have long debated whether, and to what extent, generous public benefits induce migration. The migrant crisis in New York City presents a case study of this "welfare magnet" hypothesis, demonstrating that certain benefit programs, in some situations, can indeed affect migration. The crisis also offers a case study in how state and local benefit programs can influence the movement of low-income people more broadly.
The most important decisions over immigration policy will be made at the federal level. But as American communities continue to diverge more in their approaches to immigration, the dynamics of state and local benefit programs--which, as the New York City experience shows, can exert a magnet-like effect--will be increasingly important to understand.
Evidence Concerning Welfare Magnet Effects: Immigrants and Native Low-Income Households
Immigrants everywhere use taxpayer-funded benefit programs run by host countries. In the U.S., foreign-born households use such programs at a higher rate than native households.[2] Of the 10 American states with the largest share of foreign-born residents, seven are blue states known for their commitment to social expenditures.[3] But scholars dispute the degree to which access to such programs, relative to other push-and-pull factors, influences immigration flows via so-called welfare magnet effects.
Immigration scholars who dispute welfare magnet effects use two main lines of argument. First, they argue that the pull of benefit programs is weaker than many other factors that attract immigrants, such as employment opportunities.[4] Second, they point out that benefits are typically restricted to those with a certain status or tenure in the country.[5] For these scholars, the welfare magnet effect is portrayed as either impossible because new arrivals are not benefit-eligible, or real but insignificant in accounting for immigrants' motivations and movements.
Policy debate over immigration is informed not only by scholars' theoretical and empirical work on welfare magnets but also by moral values. Many who contribute to that debate believe that the U.S. benefits from an expansive immigration policy and that the welfare magnet thesis unfairly stigmatizes immigrants as rent-seekers.[6] But political officials tend to take the risk of welfare magnets seriously. The fact that most governments worldwide place restrictions on immigrant benefit access suggests that magnet effects may pose a real and significant risk.
Welfare magnets have also been long debated for the native low-income population. Native low-income households move less than immigrants but face fewer barriers to benefit access.[7] Indeed, they have a right to move to access other states' benefit programs. In Shapiro v. Thompson (1969), the Supreme Court prohibited states from imposing "durational residence requirements" on their cash welfare programs. Though such requirements were then, and are now, standard for immigrants and federal programs, the Court ruled that the constitutional right to travel bars states from requiring citizens to reside in-state for a year before accessing benefits.[8]
In the U.S., low-income natives are about as mobile as the nation as a whole.[9] Researchers who dispute welfare magnet effects for the native low-income population point out that they, like immigrants, have many reasons other than benefits for moving. Furthermore, they often move short distances, and the largest benefit differentials exist between states that are distant from one another.[10] One highly cited critical analysis of the welfare magnet thesis from the 1990s found that mobile low-income households mostly moved from one low-benefit southern state to another and rarely from a low-benefit southern state to a high-benefit northern state.[11] Of course, a principal reason for relative parity between neighboring states' benefit levels at that time might have been states' fear of welfare magnet effects.
Furthermore, even a relatively small number of low-income natives moving for benefit access still poses a risk to state and local budgets and economic competitiveness, because providing government services for this population is, almost by definition, expensive.
The risk of magnet effects is perhaps most acute when it comes to the homeless population. Data on the mobility of homeless Americans are more limited and less standardized than for the low-income population generally. But some communities have gathered mobility information through their regular "point in time" surveys of the homeless population and found substantial rates of non-locals.[12] Public officials tend to be, if anything, more concerned about magnet effects in the case of the homeless population than in the low-income population generally.[13] Homelessness can be very expensive to address because this population is not only extremely low-income but also beset by high rates of behavioral disorders.[14]
* * *
View full issue brief at: https://manhattan.institute/article/new-york-citys-migrant-crisis-a-case-study-of-welfare-magnet-effects
[Category: Think Tank]
Hudson Institute Issues Commentary to Washington Examiner: Stop Calling It the Cloud. It's a Factory
WASHINGTON, July 28 -- Hudson Institute, a research organization that says it promotes leadership for a secure, free and prosperous future, issued the following commentary on July 26, 2026, by nonresident senior fellow Paul Sracic to the Washington Examiner:
* * *
Stop Calling It the Cloud. It's a Factory
Over the past year, discussions about Artificial intelligence (AI) have captured the attention of everyone from everyday citizens to the Pope. Despite this surge in awareness, the public largely misunderstands how AI functions and how closely its development mirrors traditional manufacturing ... Show Full Article WASHINGTON, July 28 -- Hudson Institute, a research organization that says it promotes leadership for a secure, free and prosperous future, issued the following commentary on July 26, 2026, by nonresident senior fellow Paul Sracic to the Washington Examiner: * * * Stop Calling It the Cloud. It's a Factory Over the past year, discussions about Artificial intelligence (AI) have captured the attention of everyone from everyday citizens to the Pope. Despite this surge in awareness, the public largely misunderstands how AI functions and how closely its development mirrors traditional manufacturingprocesses. This fundamental misconception is driving a fierce, increasingly bipartisan backlash against the physical infrastructure necessary to sustain AI's growth.
As it has evolved, AI is, at its core, best understood as an extremely sophisticated form of automated pattern recognition. What we call computer neural networks are first trained on enormous amounts of data gathered from the internet using algorithms -- really just mathematical equations -- to discover patterns or relationships; once trained, they apply those patterns to new questions. Because modern computers can detect patterns sometimes invisible to humans and then use those patterns to solve problems at an almost unbelievably fast speed, their output seems magical. Since AI can answer questions and perform tasks much like very smart humans, it is tempting to anthropomorphize it.
But machine learning is not the same as human learning. People learn by grasping underlying concepts; a machine does not. Instead, AI "learns" the way a player learns in a game of "hot-and-cold." As the neural network attempts to guess at answers, the patterns it has learned are equivalent to someone calling out "warmer" or "colder," to a player. After multiple rounds of adjustment, guided only by those tiny corrections, AI, like the player, homes in on the desired object. But neither the blind folded player, nor the AI system, "knows" why any particular move worked. This is accuracy without true comprehension.
In fact, it's this lack of comprehension, and by extension anything resembling compassion or empathy, that makes people nervous and fuels calls for regulation of AI. Of course, like many beneficial technologies, AI can be misused, and both AI and the infrastructure it runs on create externalities that need to be accounted for. But it's important to recognize that AI is a real, valuable product, albeit a generated one. Given its use in everything from military logistics to traditional manufacturing, it is arguably the most important product a nation can lead in producing in the 21st century.
Because AI is fundamentally a system of processing and refinement, particularly when it comes to training what are called frontier models, AI can be understood as a kind of manufacturing process.
AI "manufacturing" takes massive datasets scraped from the internet as raw material and processes them with specialized computing hardware -- clusters of advanced GPUs operating in unison in what we call data centers. The finished product is a trained neural network capable of generating text, images, or insights on demand.
As with most manufacturing processes -- steel making, for example -- the finished product enters the supply chain becoming the "raw material" for other factories. Although the "work" done in these data center "factories" is largely automated, processing units do not build, install, or maintain themselves. In addition to traditional IT engineers, data centers require, on an ongoing basis, pipefitters, electricians, and HVAC specialists, among other skilled trades. Rather than a job killer, AI will make many industries more productive while creating the sorts of blue-collar jobs the nation has been lacking.
For decades, American manufacturing has faced the challenges of offshoring and the resulting hollowed-out mill towns. The tech sector was celebrated, but with talk of places like "clouds" it was difficult for people to wrap their heads around exactly what they produced. The answer, "information," didn't seem tangible. But the cloud is a physical place, and the AI boom is pulling tech firmly back into the material world.
Of course, opposition to data centers is not driven solely by confusion about AI; communities and policymakers also raise concerns about their energy consumption, water use, and environmental impacts. We have to be honest: As with earlier mills and factories, there is a trade-off between economic progress and environmental impact. When the steel mills were operating in places like Pittsburgh, Pennsylvania, and Youngstown, OH, the soot often darkened the sky, and the rivers suffered from industrial run-off. Through regulation and advancements in technology, those problems have been mitigated, although not completely eliminated. As with steel, however, if we don't operate the mills, another country will, and probably in much less environmentally sound ways, and to the detriment of both our economic and national security.
The AI revolution will be coded in Silicon Valley, but it will be physically forged in steel mills, powered by upgraded grids, and built and maintained by blue-collar labor. By recognizing AI not as a magic box but as one the world's newest manufacturing process, the U.S. can make sure that this is one industry that is not outsourced to our competitors.
Read in the Washington Examiner (https://www.washingtonexaminer.com/op-eds/4662531/ai-data-centers-manufacturing-cloud/).
* * *
At A Glance:
Paul Sracic is a nonresident senior fellow at Hudson Institute.
* * *
Original text here: https://www.hudson.org/technology/stop-calling-it-cloud-its-factory-paul-sracic
[Category: ThinkTank]
* * *
Stop Calling It the Cloud. It's a Factory
Over the past year, discussions about Artificial intelligence (AI) have captured the attention of everyone from everyday citizens to the Pope. Despite this surge in awareness, the public largely misunderstands how AI functions and how closely its development mirrors traditional manufacturing ... Show Full Article WASHINGTON, July 28 -- Hudson Institute, a research organization that says it promotes leadership for a secure, free and prosperous future, issued the following commentary on July 26, 2026, by nonresident senior fellow Paul Sracic to the Washington Examiner: * * * Stop Calling It the Cloud. It's a Factory Over the past year, discussions about Artificial intelligence (AI) have captured the attention of everyone from everyday citizens to the Pope. Despite this surge in awareness, the public largely misunderstands how AI functions and how closely its development mirrors traditional manufacturingprocesses. This fundamental misconception is driving a fierce, increasingly bipartisan backlash against the physical infrastructure necessary to sustain AI's growth.
As it has evolved, AI is, at its core, best understood as an extremely sophisticated form of automated pattern recognition. What we call computer neural networks are first trained on enormous amounts of data gathered from the internet using algorithms -- really just mathematical equations -- to discover patterns or relationships; once trained, they apply those patterns to new questions. Because modern computers can detect patterns sometimes invisible to humans and then use those patterns to solve problems at an almost unbelievably fast speed, their output seems magical. Since AI can answer questions and perform tasks much like very smart humans, it is tempting to anthropomorphize it.
But machine learning is not the same as human learning. People learn by grasping underlying concepts; a machine does not. Instead, AI "learns" the way a player learns in a game of "hot-and-cold." As the neural network attempts to guess at answers, the patterns it has learned are equivalent to someone calling out "warmer" or "colder," to a player. After multiple rounds of adjustment, guided only by those tiny corrections, AI, like the player, homes in on the desired object. But neither the blind folded player, nor the AI system, "knows" why any particular move worked. This is accuracy without true comprehension.
In fact, it's this lack of comprehension, and by extension anything resembling compassion or empathy, that makes people nervous and fuels calls for regulation of AI. Of course, like many beneficial technologies, AI can be misused, and both AI and the infrastructure it runs on create externalities that need to be accounted for. But it's important to recognize that AI is a real, valuable product, albeit a generated one. Given its use in everything from military logistics to traditional manufacturing, it is arguably the most important product a nation can lead in producing in the 21st century.
Because AI is fundamentally a system of processing and refinement, particularly when it comes to training what are called frontier models, AI can be understood as a kind of manufacturing process.
AI "manufacturing" takes massive datasets scraped from the internet as raw material and processes them with specialized computing hardware -- clusters of advanced GPUs operating in unison in what we call data centers. The finished product is a trained neural network capable of generating text, images, or insights on demand.
As with most manufacturing processes -- steel making, for example -- the finished product enters the supply chain becoming the "raw material" for other factories. Although the "work" done in these data center "factories" is largely automated, processing units do not build, install, or maintain themselves. In addition to traditional IT engineers, data centers require, on an ongoing basis, pipefitters, electricians, and HVAC specialists, among other skilled trades. Rather than a job killer, AI will make many industries more productive while creating the sorts of blue-collar jobs the nation has been lacking.
For decades, American manufacturing has faced the challenges of offshoring and the resulting hollowed-out mill towns. The tech sector was celebrated, but with talk of places like "clouds" it was difficult for people to wrap their heads around exactly what they produced. The answer, "information," didn't seem tangible. But the cloud is a physical place, and the AI boom is pulling tech firmly back into the material world.
Of course, opposition to data centers is not driven solely by confusion about AI; communities and policymakers also raise concerns about their energy consumption, water use, and environmental impacts. We have to be honest: As with earlier mills and factories, there is a trade-off between economic progress and environmental impact. When the steel mills were operating in places like Pittsburgh, Pennsylvania, and Youngstown, OH, the soot often darkened the sky, and the rivers suffered from industrial run-off. Through regulation and advancements in technology, those problems have been mitigated, although not completely eliminated. As with steel, however, if we don't operate the mills, another country will, and probably in much less environmentally sound ways, and to the detriment of both our economic and national security.
The AI revolution will be coded in Silicon Valley, but it will be physically forged in steel mills, powered by upgraded grids, and built and maintained by blue-collar labor. By recognizing AI not as a magic box but as one the world's newest manufacturing process, the U.S. can make sure that this is one industry that is not outsourced to our competitors.
Read in the Washington Examiner (https://www.washingtonexaminer.com/op-eds/4662531/ai-data-centers-manufacturing-cloud/).
* * *
At A Glance:
Paul Sracic is a nonresident senior fellow at Hudson Institute.
* * *
Original text here: https://www.hudson.org/technology/stop-calling-it-cloud-its-factory-paul-sracic
[Category: ThinkTank]
Competitive Enterprise Institute: 'Don't Panic: A Skeptic's Guide to the AI Jobs Doomsday'
WASHINGTON, July 28 (TNSLrpt) -- The Competitive Enterprise Institute issued the following study on July 9, 2026, by Sean Higgins entitled "Don't Panic: A Skeptic's Guide to the AI Jobs Doomsday."
Here are excerpts:
* * *
As technology advances it has periodically bred the fear that progress will destroy jobs and livelihoods. History teaches that these fears are usually misplaced. A century and a half ago, most people worked on farms, performing back-breaking labor 10 hours of the day. Modern agricultural techniques have drastically reduced the amount of labor needed to manage farms. Yet these ... Show Full Article WASHINGTON, July 28 (TNSLrpt) -- The Competitive Enterprise Institute issued the following study on July 9, 2026, by Sean Higgins entitled "Don't Panic: A Skeptic's Guide to the AI Jobs Doomsday." Here are excerpts: * * * As technology advances it has periodically bred the fear that progress will destroy jobs and livelihoods. History teaches that these fears are usually misplaced. A century and a half ago, most people worked on farms, performing back-breaking labor 10 hours of the day. Modern agricultural techniques have drastically reduced the amount of labor needed to manage farms. Yet thesedevelopments have not resulted in widespread unemployment, and few people are nostalgic for the arduous life that once prevailed.[1]
The current iteration of that fear is Artificial Intelligence, a.k.a. "AI." The capabilities of computer programs have grown exponentially, most notably with the release of ChatGPT in late 2022. Tech companies have been investing billions in AI development, creating a technological gold rush. Businesses are clamoring to get on board both because they fear being left behind and because they anticipate genuine opportunity in developing AI-based tools.
Ninety-five percent of CEOs say they are optimistic about AI adoption, calling the technology transformative. Only 5 percent of those CEOs viewed AI as overhyped. "They think it is going to add to productivity, help the economy, improve the global economy, improve competitiveness, but it will weaken the employment market," said Stagwell Chairman Mark Penn.[2]
The race to develop AI-based technology is premised on the belief that it will be the next major stage in automation, eliminating a variety of human tasks in the same way that dishwashers eliminated the need to clean dishes by hand. The difference is that this time the jobs lost are in more skilled professions previously assumed immune to replacement by machines because they required knowledge and critical thinking skills. The age of the sentient computer is supposedly dawning, and that could have profound implications.
"If AI surpasses human intelligence and acquires the ability to improve itself, it could confer unshakable scientific, economic and military superiority on the country that controls it," said The Wall Street Journal.[3]
Will these innovations come at the cost of jobs? AI will undoubtedly result in creative destruction where, along with the advances, certain jobs may be rendered obsolete, and therefore those who cannot adapt to these changes will be left behind. Nevertheless, those concerns are probably overblown.[4] Innovation historically has not caused widespread unemployment in the broader economy. It is usually associated with greater job gains as surrounding industries adapt to the changes, creating new jobs in the process. The advent of the automobile may have been problematic at first for the leathermakers who made buggy whips and bridles for horses. But it didn't destroy the leather-making industry. After all, someone had to make the leather that covered the seats of the cars coming off the assembly lines.
Bill Beach, economist and former head of the Bureau of Labor Statistics, points out that AI is not only a new technology, "but it is also a new form of labor and that is the part that is puzzling everyone."[5]
AI is a technological development unlike any that have come before. Alarmists are using that novelty and the uncertainty it brings to repeat the same pessimistic predictions they made when previous technological revolutions took place. However, while AI may be different, we should expect the economy to adapt to AI just as it did to previous innovations.
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View full study at: https://cei.org/wp-content/uploads/2026/07/OnPoint-311.pdf
[Category: ThinkTank]
Here are excerpts:
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As technology advances it has periodically bred the fear that progress will destroy jobs and livelihoods. History teaches that these fears are usually misplaced. A century and a half ago, most people worked on farms, performing back-breaking labor 10 hours of the day. Modern agricultural techniques have drastically reduced the amount of labor needed to manage farms. Yet these ... Show Full Article WASHINGTON, July 28 (TNSLrpt) -- The Competitive Enterprise Institute issued the following study on July 9, 2026, by Sean Higgins entitled "Don't Panic: A Skeptic's Guide to the AI Jobs Doomsday." Here are excerpts: * * * As technology advances it has periodically bred the fear that progress will destroy jobs and livelihoods. History teaches that these fears are usually misplaced. A century and a half ago, most people worked on farms, performing back-breaking labor 10 hours of the day. Modern agricultural techniques have drastically reduced the amount of labor needed to manage farms. Yet thesedevelopments have not resulted in widespread unemployment, and few people are nostalgic for the arduous life that once prevailed.[1]
The current iteration of that fear is Artificial Intelligence, a.k.a. "AI." The capabilities of computer programs have grown exponentially, most notably with the release of ChatGPT in late 2022. Tech companies have been investing billions in AI development, creating a technological gold rush. Businesses are clamoring to get on board both because they fear being left behind and because they anticipate genuine opportunity in developing AI-based tools.
Ninety-five percent of CEOs say they are optimistic about AI adoption, calling the technology transformative. Only 5 percent of those CEOs viewed AI as overhyped. "They think it is going to add to productivity, help the economy, improve the global economy, improve competitiveness, but it will weaken the employment market," said Stagwell Chairman Mark Penn.[2]
The race to develop AI-based technology is premised on the belief that it will be the next major stage in automation, eliminating a variety of human tasks in the same way that dishwashers eliminated the need to clean dishes by hand. The difference is that this time the jobs lost are in more skilled professions previously assumed immune to replacement by machines because they required knowledge and critical thinking skills. The age of the sentient computer is supposedly dawning, and that could have profound implications.
"If AI surpasses human intelligence and acquires the ability to improve itself, it could confer unshakable scientific, economic and military superiority on the country that controls it," said The Wall Street Journal.[3]
Will these innovations come at the cost of jobs? AI will undoubtedly result in creative destruction where, along with the advances, certain jobs may be rendered obsolete, and therefore those who cannot adapt to these changes will be left behind. Nevertheless, those concerns are probably overblown.[4] Innovation historically has not caused widespread unemployment in the broader economy. It is usually associated with greater job gains as surrounding industries adapt to the changes, creating new jobs in the process. The advent of the automobile may have been problematic at first for the leathermakers who made buggy whips and bridles for horses. But it didn't destroy the leather-making industry. After all, someone had to make the leather that covered the seats of the cars coming off the assembly lines.
Bill Beach, economist and former head of the Bureau of Labor Statistics, points out that AI is not only a new technology, "but it is also a new form of labor and that is the part that is puzzling everyone."[5]
AI is a technological development unlike any that have come before. Alarmists are using that novelty and the uncertainty it brings to repeat the same pessimistic predictions they made when previous technological revolutions took place. However, while AI may be different, we should expect the economy to adapt to AI just as it did to previous innovations.
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View full study at: https://cei.org/wp-content/uploads/2026/07/OnPoint-311.pdf
[Category: ThinkTank]