Should the Child Tax Credit reduce my total tax liability? I owed $5K and after taking the deduction for both children, my tax liability remained the same.

Yes, it will reduce your tax liability.  However, if you are watching the meter, generally, the Child Tax Credit is calculated into your numbers before you go to that section.  If you would have responded to one of the questions in a manner that made you ineligible for the credit, you would have seen your tax due increase.

You can double check to verify that you received the Child Tax Credit by looking at line 19 of your 1040 Form.  If you are using the online version on the left side of your screen click Tax Tools>>Tools>> View Tax Summary.  If you are using the desktop version, you can simply switch to forms mode to see your form 1040.