SALT LAKE CITY — Sen. Mitt Romney unveiled a plan Thursday to send American families $350 a month for each young child and $250 for each school-age child on an ongoing basis.
The Family Security Act aims to streamline existing federal family policies to create one universal child benefit. The legislation would consolidate many complicated programs to create a monthly cash payment for families without adding to the deficit, according to Romney, R-Utah.
“American families are facing greater financial strain, worsened by the COVID-19 pandemic, and marriage and birth rates are at an all-time low,” Romney said in a statement.
“On top of that, we have not comprehensively reformed our family support system in nearly three decades, and our changing economy has left millions of families behind,” he said. “Now is the time to renew our commitment to families to help them meet the challenges they face as they take on (the) most important work any of us will ever do — raising our society’s children.”
Also Thursday, Sen. Mike Lee, R-Utah, and Sen. Marco Rubio, R-Fla., released a joint statement on new proposals to further expand the child tax credit, which they successfully did in 2017. They say tax return data shows it had a positive effect on millions of American families.
In the current pandemic relief bill under consideration, Lee and Rubio said they would favor increasing the credit to $3,500, and $4,500 for young children, which is more than what President Joe Biden is proposing in his plan. Biden would raise it to $3,000 per child and $3,600 for children under 6 years old.
But Lee and Rubio said they do not support what has been called a “child allowance,” paid out as a universal basic income to all parents.
“That is not tax relief for working parents; it is welfare assistance,” the senators said. “An essential part of being pro-family is being pro-work. Congress should expand the child tax credit without undercutting the responsibility of parents to work to provide for their families.”
Romney said his proposal would ensure that expecting parents receive the financial help they need associated with preparing for a child, and low-income families would no longer have to choose between a bigger paycheck or maintaining eligibility for government support.
The Social Security Administration would administer the payments, which would be available to all children with a Social Security number.
Romney proposes to pay for the plan by eliminating several federal programs and income tax deductions and consolidating overlapping and duplicative federal policies. Temporary Assistance for Needy Families and the head-of-household tax filing status would be eliminated.
The plan also does away with the state and local tax deduction, which Romney said is an inefficient tax break to upper-income taxpayers. But most families that previously claimed that deduction would net more money through their larger monthly child benefits, he said.
Angela Rachidi, an American Enterprise Institute scholar who tracks poverty policies and issues, said her main concern about the Romney proposal is that it would provide a flat benefit to nonworking families as he proposes to make the child tax credit fully refundable to all families with children.
“To make matters worse, he proposes to replace TANF with this child allowance, and TANF has a work requirement,” she said, referring to Temporary Assistance for Needy Families.
Romney would be replacing a work-focused program with an unconditional cash transfer to poor nonworking families, Rachidi said. It would reduce labor force participation among poor mothers and deprive them of a path toward upward mobility, she said.
Matt Bruenig, founder of the left-leaning think tank the People’s Policy Project, deems Romney’s plan “better than Biden’s” and worse than his own, noting some differences between the three approaches.
None of them exclude the poor from receiving a child benefit, as occurs when families have to make a certain amount of money to get a child tax credit, since it’s not completely refundable.
Romney’s plan has a more generous lifetime benefit, Bruenig writes, capping the lifetime benefit at $62,600 compared to Biden’s proposed $57,600.
Romney’s proposal would also be administered by the Social Security Administration instead of through the tax code. That makes more sense to Bruenig, who told the Deseret News that no other benefits not tied to earning a living — think Social Security or benefits for those with a disability — go through the IRS. Administering it through Social Security is likely to increase participation, he said.
He hopes the Romney proposal will be a “starting point” on which to build.
“A child allowance would put more money into the hands of low-income and middle-income parents more effectively than most other programs,” Andrew Cherlin, Griswold professor of sociology and public policy at Johns Hopkins University, recently told the Deseret News.
Under Romney’s plan, parents would be eligible to receive the payment four months before their child’s due date, with a maximum monthly payment of $1,250. The plan would immediately lift nearly 3 million children out of poverty, while providing a bridge to the middle class, he said.
The monthly payment would be $350 a month for children ages 0 to 5, $250 a month for children 6 to 17.
Romney also said the proposal would promote marriage and treat working and stay-at-home parents equally.