After 400 Years: It is Time to Honor the Treaties

November is Native American Heritage Month which is a time to acknowledge indigenous people’s significant contributions and celebrate Indigenous cultures, histories, and traditions. However, this month also presents an opportunity to learn about the significant shortcomings committed by the U.S. in its over 400-year relationship with tribal nations – especially regarding treaty rights.

Tribal nations have been sovereign since time immemorial. Sovereignty is a legal word for an ordinary concept – the authority to self-govern. Tribal nations have inherent rights to govern themselves in matters that are internal to their communities, integral to their unique cultures, identities, and institutions, and with respect to their special relationship to their land and their resources. Their political relationship with the U.S. government does not derive from race or ethnicity but their intrinsic nationhood status.

The U.S. constitution defines treaties with the sovereign nations as part of the “supreme law of the land,” with the same legal force as federal statutes. The Supreme Court has explained that treaties should be interpreted liberally in favor of tribal nations, as tribal nations would have understood them, with ambiguous language clarified for their benefit. America signed the first treaty in 1778 with the Delaware Indians after declaring independence from British rule. Between 1778–1871, more than 370 treaties came into law, and only Congress may revoke Indian treaty rights.

Treaties with tribal nations vary widely in their terms and provisions. Treaties commonly included:

  • A guarantee of peace;
  • A provision on land boundaries, hunting and fishing rights (often including lands outside the reservation boundaries);
  • Tribal recognition of U.S. authority & protection; or
  • Specific promises of federally provided health care, education, housing, economic development, and agricultural assistance.

From 1823 to 1832, Supreme Court Chief Justice John Marshall authored the Marshall Trilogy – Johnson v. McIntosh, Cherokee Nation v. Georgia, and Worcester v. Georgia. These laid the foundation for federal Indian law and the roots of the federal-tribal trust relationship. It also established the treatment of tribal property and resources. These cases determined that:

  • Tribal nations have the right to reside on lands reserved for them, but the United States has ultimate title;
  • Tribal nations are “domestic dependent nations”; and
  • States cannot impose their policies within Indian territories.

The United States made various political and legal commitments to tribal nations through treaty-making. Unfortunately, tribal nations are no strangers to violations of their treaty rights. Below are several policy-making eras that came to shape where we are today.

Treaty-Making and Removal Period (1778-1887): The United States negotiated over 400 treaties with American Indian tribal nations, though Congress ratified only 375. In 1830, President Andrew Jackson asked Congress to pass a bill providing for the removal of all eastern tribes to west of the Mississippi River, which Congress designated as “Indian Territory.” Congress passed the Indian Removal Act despite protests that the act violated previous treaties and laws recognizing Indian sovereignty.

Allotment and Assimilation Period (1887-1934): With treaties confining tribal nations into smaller tracts of land, poverty and poor health outcomes rose, leading to higher costs to the federal government. The Dawes Act of 1887 then served to promote assimilation and dividing of tribal nations’ communal landholdings into allotments leading to multiple owners, including millions of acres passing out of trust into non-Indian homesteading.

Tribal Reorganization Period (1934-1940s): Realizing the poor impacts of allotment & assimilation, the Indian Reorganization Act shifted policy toward more authority and autonomy to tribal governments and ended the Allotment Period.

Termination and Relocation Period (1950s-1960s): Seeing that the U.S. could save money by ending the federal government’s trust and treaty obligations, federal policy focused on ending reservations, dissolving the recognition of tribal sovereign authority, and again promoting assimilation.

Self-Determination Era (1970s-Present): Due to the termination policies proving detrimental to tribal citizens, federal policy began emphasizing increasing tribal decision-making authorities. Congress restored Tribes’ sovereign status, though most reservations and tribal assets were unrecoverable.

The federal government has never adequately funded treaty provisions. It is, however, the obligation of the federal government to protect tribal self-governance, tribal lands, assets, resources, and treaty rights, in addition to carrying out the directions of federal statutes and court cases. The Supreme Court has defined this trust responsibility as a “moral obligation of the highest responsibility and trust.” Indian treaties have the same status as treaties with foreign nations. Because they are made under the U.S. Constitution and are “the supreme law of the land,” they take precedence over any conflicting state law. These contracts represent an exchange and acknowledgment of certain rights, not a grant of rights already held by tribal governments and peoples.

The United States should prioritize improving its over 400-year relationship between tribal nations. No easy answer exists when more than 574 federally recognized Indian nations exist across the country, each with distinctive colonization histories. Still, they share one common demand of the United States, and that is to honor the treaties.

Native American Heritage Month is an opportunity for each of us to learn about our role in honoring treaties and tribal sovereignty. One place to start is to read U.S. Commission on Civil Rights 2018 report BROKEN PROMISES: Continuing Federal Funding Shortfall for Native Americans and OPI’s Essential Understandings of Regarding Montana Indians.

BBB Specifics: Child Care

Last week, President Biden and Congress unveiled the latest version of the federal recovery package, coined the Build Back Better plan. This package represents a significant investment in Montana communities, geared toward expanding economic opportunity and lowering costs for families and workers. Historic investments in child care, preschool, school nutrition, and the child tax credit will help lift millions of children from poverty. Over the next week, Montana Budget & Policy Center will provide information on key components of this package.

Child Care

The federal economic recovery package provides $400 billion in additional support for child care and early childhood education for families and workers. In child care funding alone, Montana is slated to receive $67 million in 2022, $95 million in 2023, and $118 million in 2024, to expand access to child care and build out child care capacity.

Why is this investment necessary? Our current child care system is failing Montana families, and our economy is suffering as a result. Even before the pandemic, licensed child care slots in Montana covered less than half of the children whose parents work and need child care. This situation is more dire for parents of infants – with licensed child care capacity filling roughly a third of the need. A family lucky enough to find a slot will pay, on average, nearly 20 percent of their family income for care.

Who would benefit from the child care funding? Families, businesses, and child workers are all set to benefit from this package. Once the program is phased in over three years, parents of nearly 85 percent of Montana children under 6 will access support and see their costs go down. That’s about 63,000 children in the state. Montana businesses across the state are facing workforce shortages, in part due to lack of reliable child care for their workers. This investment will help keep parents in the workforce and is critical for our economy.

Who will be eligible for child care?The program is phased in over three years, expanding family eligibility over time. In the first year, families with incomes at or below the state median income will be eligible for assistance (for a family of three in Montana, that is roughly $71,000). Over three years, states will expand their programs to make more families eligible, with the program ultimately helping all families at or below 250 percent of the state median income (or about $180,000 for a family of three).

In general, a child must have at least one parent who is working, in school, or participating in other eligible activities. There are exceptions to ensure that children who have a disability, are in foster care, are experiencing homelessness, or are cared for by an older family member can receive assistance.

How will this package help families afford child care? States can require families to pay copays, but copays are capped based on income and cannot exceed a certain percent of family income. Families living on lower incomes (below 75 percent of the state median income) are not subject to copays. For families at higher income levels, copays are capped at 7 percent of income. An average Montana family with copays capped at 5 percent will save $116 per week, or $6,032 annually, on child care costs.

How will this bill help child care professionals? Today, child care professionals are underpaid and overworked, facing wages barely above minimum wage. The legacy of employer discrimination, racism, and perceptions of caregiving responsibilities have resulted in women, and specifically women of color, overrepresented in child care work and often paid poverty wages. To receive funding, states must show a plan to ensure child care professionals are paid a living wage and competitive with wages of elementary education professionals. By investing billions in child care, this package makes it possible for child care small businesses to pay wages that will stabilize their workforce and ensure child care professionals are paid for their work.

Will this package help states expand the supply of child care? The bill is geared toward helping states increase the supply and capacity of child care providers over the first three years, so that more families can access child care. The package provides additional support for states to expand payments to child care businesses, as well as grants to grow child care supply and improve quality.

Will the state have to provide additional state funding for the program? There is no state match for the first three years, and after that, the federal government will provide 90 percent of the cost, with states matching 10 percent. For the first three years, funds allocated to states are designed to help build additional child care capacity and increase access to child care for families. During those first three years, states must allocate 50 percent of their funds toward expanding access to subsidies, 25 percent to support building child care supply and improving quality, and 25 percent toward expanding outreach and access to those subsidies (including the state’s capacity to do that work). Starting in 2024, the program will guarantee affordable child care for eligible families, similar to how Medicaid and other social safety net programs operate. The federal government will pay 90 percent of the cost, and states are required to meet a 10 percent match (states and the feds share administrative costs, 50/50). This state match level is lower than most federal programs, including the match levels for traditional Medicaid and federal highway funds, and is on par with the state match for Medicaid expansion.

What if a state refuses to take the additional federal investment? If a state chooses not to participate, the bill will allow local governments or Head Start agencies to apply and receive funds. The federal Department of Health and Human Services will administer the program and provide additional details by rule on how local governments could apply in the event a state chooses not to take the funds.

BBB provides critical, common-sense investments in housing affordability

On October 28th, President Biden proposed the “Build Back Better Act” framework, providing $150 billion in affordable housing investments. The Build Back Better (BBB) Act’s plan for affordable housing represents a comprehensive approach to tackling our nation’s housing crisis. By expanding rental assistance, increasing the number of homes affordable to households living on low incomes, and supporting local governments seeking to dismantle exclusionary zoning and discriminatory land-use policies, we can significantly impact the housing crisis across Montana. There are many components in the proposed framework, and we highlight several key investments below. 

  • Reduce housing instability and homelessness. The BBB plan provides a total of $26 billion for rental assistance, with $24 billion going towards new Housing Choice Vouchers for households living on poverty level incomes and $7 billion of those dollars directed specifically to households experiencing or at risk of homelessness and survivors of domestic violence and trafficking. (See our latest report on the Housing Choice Voucher program and its importance in Montana.) The $1 billion goes towards project-based assistance. The remaining $1 billion is for the Section 811 and 202 programs for people living with disabilities and seniors, investments that can be used for capital improvements and project-based rental assistance. Providing sustainable, multi-year funding for rental assistance is an essential step to keeping our neighbors housed and secure. 
  • Support public housing capital improvements. Keeping rents levels deeply affordable to households living on very low income can require public subsidies to build. The BBB plan includes $65 billion to repair and rehabilitate the nation’s public housing infrastructure. It provides an additional $15 billion for the national Housing Trust Fund and HOME Investment Partnerships program to construct and rehabilitate more than 150,000 homes affordable to households living in poverty and those experiencing or at risk of homelessness. These investments will have a significant impact in Montana. Our public housing is among the oldest in the nation. For example, in Helena, public housing is 63 years old on average —and in dire need of repairs to remove safety hazards like lead paint and mold, improve accessibility, and raise the quality of living to an acceptable standard for residents.
  • Address housing needs in Indian Country. Tribal communities confront housing shortages, unacceptable levels of environmental hazards in residents’ homes, and critical infrastructure needs. The BBB plan provides $2 billion to expand construction and rehabilitation of housing on reservations, build infrastructure to support housing, such as water and sewer lines, and support energy-efficient, climate-resistant development projects. 
  • Incentivize removing of exclusionary zoning and discriminatory land-use policies. There is a legacy and ongoing practice of communities locking out prospective low-income and BIPOC residents through land-use tactics, like minimum lot sizes, mandatory parking requirements, and restricting multifamily housing. These policies have also increased housing prices and construction costs. The BBB plan provides help to jurisdictions to dismantle these policies and, thus, expand housing opportunities for people who have been intentionally excluded from high-opportunity neighborhoods. The BBB plan creates a $5 billion incentive fund that awards flexible funding to jurisdictions that reduce these barriers that restrict housing production and lockout prospective residents.   
  • Build affordable housing and supportive infrastructure in rural America. Small, rural towns face storages of housing that is affordable for workers living on low incomes and for aging residents with accessibility needs. The BBB plan provides $250 million for a new Main Street Revitalization Programs for grants to small communities. These grants would increase supply of housing as well as revitalize downtown business districts. 
  • Build climate-resistant communities and energy-efficient homes. In an era of climate change, extreme weather events are displacing households across the nation. The BBB plan provides more than $2 billion for a new Community Development Block Grant Program for communities vulnerable to climate change. These grants target low- and moderate-income regions that are at high risk of suffering climate-related disasters. In addition, the BBB provides $500 million in grants and low-interest loans to renovate public housing, making them energy-efficient and resilient against extreme weather events. 

The targeted housing investments and complementary expansion of federal tax credits supporting those investments would provide greater levels of affordability, stability, and opportunity for those struggling to keep a roof over their heads. A failure to invest in housing has led to the crisis we find ourselves in today. In Montana, two out of three households living in poverty must pay more than half their income on rent. About 6,000 children are in families behind on rent payments, and many face eviction. Passing the BBB Act is our opportunity to change course by treating housing as critical infrastructure. Housing is just as important as roads, bridges, and schools. It will ensure everyone has the basic foundations we all need to lead stable and healthy lives.

BBB Specifics: Child Nutrition and Child Tax Credit

Last week, President Biden and Congress unveiled the latest version of the federal recovery package, coined the Build Back Better plan. This package represents a significant investment in Montana communities, geared toward expanding economic opportunity and lowering costs for families and workers. Historic investments in child care, preschool, school nutrition, and the child tax credit will help lift millions of children from poverty. Over the next week, Montana Budget & Policy Center will provide information on key components of this package. We’ll start with child nutrition and the child tax credit.

The economic relief package before Congress is a historic step in relieving childhood hunger and poverty. Even prior to the pandemic, too many families struggled to make ends meet. But the pandemic has amplified the challenges many families face. One in ten adults living with children report that the children in their household aren’t getting enough food to eat this fall.

Child Nutrition Provisions
The federal package takes vital steps in addressing childhood hunger by addressing the summer meal crisis.

  • Authorizes Summer Electronic Benefits Transfer (EBT). When schools are closed in the summer, many children who rely on the school for free or reduced-price meals are left with nutritional gaps. For the summers of 2023 and 2024, eligible families would receive $65 per child per month. States and Indian Tribal Organizations will also receive grants to build capacity to implement S-EBT. This program helped reduce hunger during the summers of 2020 and 2021 as Pandemic-EBT and will be available to states in 2022.
  • Expand Community Eligibility Provision (CEP). Many children live in areas with high poverty rates and miss out on free and reduced-price meals due to difficulty accessing the program. CEP allows all students to receive free meals at school if there is a substantial number of qualifying students. The new guidelines would lower the Identified Student Percentage from 40 percent to 25 percent, include a statewide CEP option, and increase the federal reimbursement rate.
  • Provide increase funding for healthy school meals. The plan would also provide $250 million to Healthy Food Incentives Demonstration projects to improve the quality of food served and allow for fresh, local, regional, and culturally appropriate food, and $30 million in school kitchen equipment grants.

These steps to improve childhood nutrition will help over 65,000 students access food during the summer and an additional 11,000 students meals during the school year in Montana.

Child Tax Credit

The extended Child Tax Credit, which was first passed by Congress as part of the American Rescue Plan, is a significant step in addressing childhood poverty. Over 9 out of 10 (209,000) children benefit from the credit in Montana. Here is what the recent framework does.

  • Extends benefit amount for one year. The increase in the size of the credit is extended for one year into 2022, with families receiving $3,600 a year for children aged 0-5 and $3,000 for ages 6-17.
  • Makes refundability permanent. Before this bill, one-third of children in Montana did not receive the full benefit of the CTC because their families earned too little. Under the new plan, the credit will be fully refundable, meaning all families will receive the full amount on their refund, even if they owe less in taxes than the credit amount. This change will reduce childhood poverty by an estimated twenty percent nationwide.

Research shows that Montanans are using their Child Tax Credits to pay for food, utilities, housing, childcare, and provide kids with educational opportunities. This framework is an important step forward to address the crises facing Montana children and families.

What is in Build Back Better and How Does it Help Montana?

President Biden and Congress recently unveiled the latest version of the federal recovery package, coined the Build Back Better plan. This package represents a significant investment in Montana communities, geared toward expanding economic opportunity and lowering costs for families and workers. Historic investments in child care, preschool, school nutrition, and the child tax credit will help lift millions of children from poverty. The Montana Budget & Policy Center will continue to update this page with information on key components of this package.

Child Nutrition and Child Tax Credit

Housing Affordability

Child Care

Congress has also set out a plan to pay for these new investments. The revenue framework for the federal reform plan will raise nearly $2 trillion over the next decade from the richest Americans and large, profitable corporations.

Many of our large, profitable corporations are paying no federal income tax. The package will fix that by ensuring that corporations with profits in excess of $1 billion pay a minimum tax of 15 percent on the profits they report to their shareholders. The plan also imposes a 1 percent surcharge when a corporation buys back its own stock – a scheme often used to shift profits to shareholders without paying dividends. The framework also addresses offshore corporate profits with a 15 percent minimum tax.

Our wealthiest individuals are also paying much less than they should in federal taxes. A much-needed high wealth tax will help ensure those with the most begin to pay their share with a surtax on incomes above $10 million. Lastly, the plan targets staggering tax avoidance at the top by increasing IRS funding to improve tax collections of taxes already due and avoided by the wealthiest.

We have a once-in-a-lifetime opportunity to address Montanans’ challenges and create a better country for everyone. We can make housing affordable, make it easier to raise a family, make sure everyone has good food to eat, and make sure seniors can stay in their homes. And we can afford it with policies that impact only the wealthiest. It is possible if Congress acts now.

Make your voice heard by contacting Senator Tester here.

Governor’s Proposed Use of Federal Funds Misses the Mark

This week, Governor Gianforte submitted a request to legislators to use a portion of federal American Recovery Plan funds to pay out-of-state health workers and pump money into criminal investigations. Like putting a band-aid on a broken leg, the proposed short-term “fixes” will do nothing to address the fundamental issues workers and communities face, like housing shortages and the decimated behavioral health system. While a majority of legislators on the ARPA commission approved these recommendations as-is, there is still the opportunity for the legislature to invest in meaningful system changes that will support communities today and into the future.

The executive’s proposal to address health care worker shortages and rising crime rates fails to look at the systemic issues Montana faces: the lack of housing and a broken behavioral health system. To date, Montana has spent just 4 percent of the federal recovery funds awarded, including less than $18 million of the $906 million in flexible fiscal relief funds. Other funding streams allocated to housing and health services do not scratch the surface of the needs.

Housing shortages in nearly every community result in workers and families unable to find safe and stable housing and small businesses facing workforce shortages. For many Montanans in essential industries, in both urban and rural communities, finding housing located close to their jobs that is affordable is nearly impossible. While we deem our frontline workers essential, workers in these occupations face lower wages on average. Frontline workers come from disproportionately socio-economically disadvantaged groups compared to the overall workforce. This is a result of ongoing racist, oppressive, and discriminatory policies and practices that limit economic mobility. A narrow approach of providing bonuses to recruit out-of-state health workers will do nothing for the Montanans who worked tirelessly throughout the pandemic and continue to experience burnout and economic hardship. They deserve our support first and foremost.

In addition, the executive’s focus on patching holes in the criminal justice system will do nothing to address the structural barriers many Montanans face in finding safe and stable housing and appropriate medical care. Social isolation, economic stress, and persistent lack of access to mental health care put even more strain on systems that support people in crisis. These are the conditions that put people at greater risk of becoming involved in our criminal justice system. Past state budget cuts have decimated supportive services in our communities, leaving local governments, providers, and families with too few options to help. As experts in the field have noted, “the behavioral health system in Montana is in danger of imminent collapse unless it receives immediate relief.”

Montana can invest in solutions that will have a lasting impact on Montana families and support thriving communities. We should invest one-time federal dollars to provide hazard pay and housing support for nurses and other essential workers, increase reimbursement rates for mental health and substance use providers, and fund case management, culturally appropriate diversion and reentry programs, and targeted housing assistance in high-demand communities. Montana needs a multi-prong approach to address housing, including the construction of new housing, expansion of housing assistance programs, and support for local governments to address growing homelessness. We can utilize the historic investment of one-time federal funds to provide meaningful support for families, workers, and communities that will outlast the dollars. Let’s not squander our opportunity to build a strong Montana.

An Explainer of Income and Wealth in the Time of COVID-19

During the pandemic, there have been many news headlines about the widening wealth gap in the United States. While true, wealth and income gaps existed long before COVID-19, particularly along lines of race. That is no accident. Rather, these gaps are the product of our country’s ongoing history of racist, biased, and discriminatory policies and practices against Black, Indigenous, and people of color (BIPOC). The pandemic has simultaneously made us acutely aware of that fact while also exacerbating the problem.

For starters, let’s distinguish wealth from income and income from wealth. The two terms are commonly used interchangeably but have different meanings. Income is what we get from our employer, our business, rents on properties, and so on. Say, for example, you work at a grocery store that pays you for your work. That is income. On the other hand, wealth represents savings, so it is accumulated over time, and tends to be higher than income. Wealth includes money in the bank, property and land owned, jewelry and art, and the like.

Both wealth and income are essential to long-term financial security. Without income, it is hard to meet basic everyday needs, such as groceries, diapers, school supplies, and clothes. In other words, income helps measure day-to-day economic resources. Wealth gives people a cushion if they lose their job or fall on hard times and allows for big investments in things that can grow wealth, such as higher education and property. Wealth can also generate income through accrued interest on bank deposits and dividends on stocks, for example.

It is possible to have wealth and little or no income. Take owning a home and living on a modest pension as one example. As a different example, take a billionaire, like Jeff Bezos. According to a July 2021 report from the Center on Budget and Policy Priorities, as of 2020, Bezos received an annual salary of $81,840, a modest income for the world’s richest person. Bezos also has wealth in the form of Amazon stock, which grew by more than $100 billion between 2010 and 2018. So, while Bezos has a relatively low income (for the world’s richest person), he has tremendous wealth.

The pandemic is deepening wealth inequality. According to reporting from August 23, 2021, in the first 17 months of the pandemic, billionaires in the United States saw their wealth increase by $1.8 trillion, an amount roughly 144 times the size of Montana’s $12.5 billion 2023 biennial budget. That has happened as the economic downturn of the pandemic has hit ordinary people. Of those billionaires, Elon Musk alone saw his wealth grow by $150 billion, and Jeff Bezos watched his wealth increase by $75 billion. It is not just the wealth of individual billionaires that is increasing, but so is the number of billionaires (from 614 to 708). For perspective, if those 708 billionaires were to sit in the University of Montana’s football stadium (capacity of 25,217), the stadium would be about 97 percent empty. We are talking about a very privileged few here. As a reminder, wealth can generate income, so even if wealthy people (millionaires and billionaires) have relatively little income, they still have resources to finance lavish lifestyles.

This concentration of wealth largely benefits white people. According to an April 2021 report from the Center on Budget and Policy Priorities, the wealthiest 10 percent of white U.S. households hold nearly two-thirds of the country’s wealth. According to September 2020 research of pre-COVID wealth from the Board of Governors of the Federal Reserve System, the average white family had eight times the wealth of the average Black family and five times the wealth of the average Hispanic family before the pandemic. These numbers represent more than a point in time – they represent the historical injustices perpetrated by racist, biased, and discriminatory policies and practices against BIPOC people. Wealth, or a lack thereof, can persist across generations. The accumulation of wealth represents access to homeownership opportunities, the passing down of resources from generation to generation, the ability to save, and a tax code that favors wealth over income, among other things. Remember, wealth can generate income, which also means that it can deepen income inequality.

White people have been more insulated from the financial impacts of COVID. Americans with higher incomes, who are more likely to be white because of ongoing historical racist policies and practices, have had more flexibility to work from home, protecting them from the virus and the economic downturn. In fact, households with annual incomes of $200,000 or more were nearly six times as likely as households with annual incomes of less than $25,000 to have switched to telework in 2020.

BIPOC people are overrepresented in jobs the pandemic hit the hardest. A July 2021 analysis by the Economic Policy Institute shows that while the overall unemployment rate fell, white people fare better. As of the analysis, Hispanic workers were still nearly 70 percent more likely than white workers to face unemployment, and Black workers were twice as likely as white workers to face unemployment.

Wealth inequality helped white people who lost job-related income. For example, according to a July 2021 report from the Center for American Progress, nearly 46 percent of white households that saw job-related income loss used savings to cover expenses, compared to roughly 31 percent of Black households. This means that when households needed to rely on savings, fewer Black families could do so, despite the disproportionate impact of the pandemic on Black people.

While undeniably linked, income and wealth are distinct. Our country’s ongoing history of racist, biased, and discriminatory policies and practices deny BIPOC people equitable access to either, creating an uneven recovery from the pandemic. Lawmakers in Congress and the Montana Legislature can do something about this. Some solutions include providing financial support for BIPOC entrepreneurs to start and grow their businesses, investing in early child care and education, providing financial support for higher education, and strengthening taxation of wealth and high incomes to sustain transformative investments in BIPOC communities.

The Data is in: Families are Spending their Child Tax Credits on Basic Needs

We’ve written before about how the expanded Child Tax Credit (CTC) is a historical step in lifting children out of poverty. But new data released from the U.S. Census Bureau can help us better understand how families use the expanded tax credit to meet their basic needs.

First, a quick recap about what the expanded CTC is: 

The CTC has long been part of our tax code. This past summer, Congress increased and expanded it to help families recover from the pandemic and address the cost of raising children. Congress increased the benefit amount, included 17-year-olds, and allowed families living on the lowest incomes to receive the full benefit for the first time. Families receive $250 a month per child aged 6-17 and $300 a month for children under 6.

Over 209,000 children qualify for the credit in Montana. The expansion is projected to reduce childhood poverty in the state by 45 percent a year if made permanent. For more information on how the expanded CTC works, be sure to read our blog post here.          

New Data Shows Families in Montana are using CTC to meet basic needs.

Since the summer of 2020. the U.S. Census Bureau has been conducting the Pulse Survey to measure the effects of the pandemic on households. Recently, the survey has asked households with children how they have spent their credits.

Data from July through September shows us that families in Montana used their first two CTC payments to meet basic needs, including food, clothing, rent, and utilities.

Here are some important takeaways from the data:

  • Nearly half (44%) of all families are using their credit on food for their household.
  • 3 out of 5 families spent their credits on basic needs and/or educational expenses regardless of their income.

For families living on less than $35,000 a year, the credit is even more essential. Here’s how families living on low incomes used their credit:

  • Food  65% of families spent their credit on food.
  • Utilities – 40% of families used their credit on utility bills.
  • Educational expenses – 34% of families used their credit on educational needs, including after-school care.Clothing – 32% of families used their credit on clothing.
  • Rent or mortgage – 29% of families paid rent or their mortgage with their tax credit. 
  • Basic needs and educational expenses – 4 out of 5 low-income families used their credit on basic needs and/or educational expenses. 

The tax credit also helps families afford to work.

In Montana, ten percent of families, and 17 percent of families with children under the age of 5, used the credit to pay child care expenses. The coronavirus pandemic has forced many parents, especially mothers, out of the workforce, due to health concerns, school closures, and a lack of affordable child care. For families who need child care to work, the credit helps make work accessible.

Congress should make the expanded CTC permanent.

This new data from the Census Bureau demonstrates how much families need this additional support. When families can afford rent, food, and other necessities, children ultimately do better. Congress should make the expanded CTC permanent and continue this historic victory against childhood poverty.

The Housing Voucher Program Should Be Included in Federal Relief Legislation

This week, Montana Budget & Policy Center released a report on the federal Housing Choice Voucher (HCV) program. This program provides rental assistance for 5,628 Montana households living on poverty-level incomes, making an average yearly income of $12,360. These households include tenants living with disabilities, families raising children, and senior citizens who depend on these vouchers so they can afford to keep a roof over their heads. By making housing costs affordable, vouchers can prevent folks from having to pick between paying the rent, putting food on the table, or buying medicine. Rental assistance is proven to lift people out of poverty and improve long-term outcomes for children who get to grow up in stable and safe homes.

However, the HCV program has fallen short of achieving its intended goals. Housing vouchers are not an entitlement benefit. The number of households that qualify for rental assistance far exceeds the number of vouchers available. There are many steps our federal government can take to improve the efficiency of this program. Congress is currently negotiating legislation we hope will make long-term, sustainable investments Americans need to build healthy, secure, and successful lives. This plan should include providing more affordable housing and expanding the housing choice voucher program.

Please read our latest report to learn more about how vital the housing choice voucher program is to so many of our neighbors.

MBPC’s Comment to Centers for Medicare and Medicaid Services

On October 14, the Montana Budget & Policy Center submitted comment to the federal Centers for Medicare and Medicaid Services (CMS) urging them to deny Montana’s request to end 12-month continuous eligibility for adult Medicaid enrollees. Roughly 17,000 Montanans risk losing coverage with the end of continuous eligibility, according to a recent analysis. This effort by the state will hurt individuals’ access to coverage, including critical preventative care, and impact Montana’s economic recovery. 

You can find MBPC’s full comment here.