WASHINGTON Rising prices have crushed consumer sentiment and become a major political story as President Joe Biden struggles to enact the broad social policy agenda that helped him win the White House last year.

But inflation is actually just one of several big economic stories happening right now. There has also been a big reduction in child poverty and Congress could make it permanent.

The same fiscal policies that are partly blamed for high inflation produced a 40% reduction in child poverty in July, according to researchers at Columbia Universitys Center on Poverty and Social Policy . The one-month decline was steeper than any year-to-year change in child poverty from 1967 until 2020, when Congress first sent out stimulus checks and boosted unemployment benefits in response to the coronavirus pandemic.

Since July, the reduction in family poverty has been mostly sustained by monthly payments worth as much as $300 per child. The payments have lifted between 3 and 4 million children above the poverty line each month.

The sheer magnitude of just that number is not what we normally see on a regular basis, especially from a single policy, Megan Curran, director of policy at Columbias Center on Poverty, said in an interview.

Democrats are planning to continue the payments through next year as part of the Build Back Better social spending bill that they hope to pass in the coming weeks. If Democrats succeed in entrenching the policy, it would represent a dramatic shift for the American welfare state in favor of families.

One of Democrats biggest obstacles is inflation, with news that prices rose 6.2% since last October prompting fresh warnings from Republicans and even some Democrats that Build Back Better is a bad idea.

From the grocery store to the gas pump, Americans know the inflation tax is real and DC can no longer ignore the economic pain Americans feel every day, Sen. Joe Manchin (D-W.Va.), a pivotal Senate vote, said in a tweet last week .

Higher prices weaken the spending power of every paycheck, but for most families with children, the monthly child tax credit payments more than make up for that erosion. In October, Moodys Analytics estimated that for households earning the U.S. median income of about $70,000 a year, higher inflation costs them $175 a month. The child payments are worth $300 for each kid under 6 years old and $250 for kids under 18; that money comes on top of wage growth that is already outpacing inflation for lower-income households.

In Washington, reducing poverty means pushing family incomes above an arbitrary threshold corresponding to the number of people in the household. For the actual people affected the extra money can be a lifesaver; low-income families report using the child payments mostly for necessities like food, clothing and shelter . Monthly survey data from the U.S. Census has also found that households with children reported notable declines in difficulty obtaining food and meeting basic expenses before and after child payments went out, changes that were absent in households without children. Research suggests that people who grow up poor tend to earn less money, have worse health outcomes and a higher likelihood of winding up in trouble with the law.

In short, the new child tax credit payments are cutting down on real human misery by partially making up for the labor markets indifference to parents, who have more expenses and less flexibility to work at whatever jobs might be available.