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FEDERAL PANEL SEEKS $1,000 TAX CREDIT FOR KIDS

A federal commission on Monday recommended giving parents a $1,000 tax credit for each child as part of a plan to help protect America's youth from poverty and despair by strength-ening families.

"Investing in children is no longer a luxury but a national imperative," the National Commission on Children said in its report.The panel spent two years studying the condition of America's youth and concluded that while most children are happy, healthy and secure, too many are in jeopardy.

"We could not avoid questioning the moral character of a nation that allows so many children to grow up poor, to live in unsafe dwellings and violent neighborhoods, and to lack access to basic health care and a decent education," it said.

It recommended a series of steps to ensure children have financial security, strong families and access to good health care and education. It said the proposals would cost the federal government $52 billion to $56 billion in the first year.

The commission did not recommend how to pay for its proposals, but it said financing options include spending cuts in other federal programs and new taxes such as a value-added tax, excise taxes or higher income taxes on the richest Americans.

Sen. Jay Rockefeller, D-W.Va., who led the commission, said eliminating federal funding for a manned space station would be one way to pay for the program.

"It is a lot of money, but in a six-week period, a two- or three-month period, we spent $56 billion in the Persian Gulf," Dr. J.D. Northway, another commission member, said Monday. Northway, a pediatrician and president of Valley Children's Hospital in Fresno, Calif., told ABC's "Good Morning America" that "it's time for us in this country to declare a war on the problems facing America's children."

About $40 billion would go for a refundable tax credit for all youths through age 18 that would replace the existing personal tax exemption for dependent children. Families that did not owe taxes would get a check from the government.

Except for high-income families, present law allows a taxpayer to exempt from taxation $2,150 for each dependent child. This translates to a tax savings of $666.50 per child for people in the highest, 31 percent, bracket, but only $322.50 for those with the lowest incomes.