Spotlight Exclusives

A ‘Refreshing’ Bipartisan Debate on Child Poverty

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Both parties are advancing serious proposals to reduce child poverty, proposing competing plans that differ on many details but share a central theme: sending monthly aid to families with few restrictions.

At an event on the topic last week sponsored by the Urban Institute, Urban President Sarah Rosen Wartell noted that the mere existence of a real, bipartisan debate about child poverty is notable and welcome in and of itself. “It’s a refreshing change, almost a throwback, to have a substantial debate on policy around a shared goal,” she said.

Panelist Sam Hammond, director of Poverty and Welfare Policy, Niskanen Center, and an adviser to Sen. Mitt Romney (R-UT) on his child allowance legislation, outlined the two major proposals. Under current law, the child tax credit provides $2,000 per year for children up to 16 years old and is paid out yearly. The tax credit doesn’t apply to those making less than $2,500 per year.

  • The Biden administration, as part of the president’s $1.9 trillion American Rescue Plan proposal, has called for increasing the child tax credit so that households would receive $3,600 for each child under 6 and $3,000 for older children and make the credit fully refundable. Under Biden’s plan, the Internal Revenue Service would be instructed to advance these credits on a monthly or quarterly basis. Only single parents making less than $75,000 and couples making less than $150,000 would qualify for the full amount.
  • Romney’s Family Security Act would provide monthly cash payments of $350 for each child under 6 – $4,200 per year – and $250 per month — $3,000 per year — for each child age 6 to 18. Families would become eligible four months before each child’s due date, meaning the household would receive $1,400 before the child is born. In a major difference, the Romney plan would be administered through the Social Security Administration and would be financed by consolidation and/or elimination of existing social safety net programs such as TANF. More parents would also qualify for the full benefit under the Romney plan; couples could make up to $400,000 a year and singles $200,000 a year before the benefit started to decrease.

Myra Jones-Taylor, Chief Policy Officer, Zero to Three, said that the pandemic has exacerbated an existing crisis, as families – and particularly families of color – were already struggling before COVID-19 hit. “Strengthening the child tax credit is critical at this time in order to alleviate some of the stress that these families are feeling,” Jones-Taylor said.

Elaine Maag, Principal Research Associate, Urban-Brookings Tax Policy Center, said both proposals would improve upon the existing tax credit, which, while effective, doesn’t help as many families as it could because of income restrictions. Maag said 27 million children under the age of 17 and 25% of the lowest income families don’t get a benefit from the credit because they don’t earn enough.

The significance of the current debate, Jones-Taylor said, is that it opens the door to creating a child tax credit/allowance that, rather than based on earned income, instead is part of a social contract that “believes all of society benefits when children are doing well. If we make that shift, we can talk about children having rights, not about deservedness.”

Hammond underlined the universal aspect of Romney’s plan, which would deliver some benefit to all American families with children. He compared Romney’s legislation to being similar in scope and intent to Franklin Roosevelt’s creation of Social Security more than an effort like former President Lyndon Johnson’s “War on Poverty,” which was focused more solely on low-income communities.

Jones-Taylor noted that Romney’s call for reductions or eliminations of some existing anti-poverty programs was a concern and could result in “unintended consequences that are pretty far reaching.” But she and other panelists applauded the emergence of a substantive debate on such an important issue. And in that spirit, Spotlight offers a sample of some of the commentary and analysis on one or both of the plans below.

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