Conservatives: Don’t ignore the child tax credit

When Sen. Joe Manchin, D-W.Va., announced he was pulling the plug on his support for President Joe Biden’s signature “Build Back Better” initiative, Democrats protested and Republicans cheered. But beyond these predictable partisan reactions lies a golden opportunity for conservatives to propose durable bipartisan solutions to some of the problems President Biden was trying to tackle, particularly in the all-important area of family policy.

According to media reports, one of the key dealbreakers for Sen. Manchin was the package’s proposed extension of the expanded child tax credit—the policy that is also likely to have the most immediate effect on average Americans. Last month, tens of millions of American families stopped receiving the monthly checks that began last summer as part of pandemic relief, which many hoped to see made permanent. Many conservatives, leery of government handouts, are likely to celebrate the end of the checks—and indeed, polls show a majority of Republicans favored ending this temporary expansion. However, this may be short-sighted.

At the heart of the debate over the child tax credit expansion and extension are two distinct issues: Should the tax credit be fully refundable, as it became in 2021, and if so, should it be dependent upon employment?

Historically, the tax credit was exactly what it sounds like: a credit against taxes owed. If a family owed $4,000 in federal taxes and had two kids, under the old policy (a $2,000 per child credit) they would owe no taxes. But if they owed only $3,000 in taxes, they would not get paid the extra $1,000. Under the 2021 policy, not only did the per-child credit go up to $3,600 per kid but it also was separated from the tax bill entirely. The same family with two kids owing $4,000 in taxes now no longer owed taxes and received an additional $3,200 from the IRS. This is no longer a “tax credit” we are talking about, and we should stop calling it one. It is a government subsidy for child-raising. But is that a bad idea?

Conservatives might object on three grounds: (1) It will cost too much, (2) it will encourage laziness and dependency, or (3) that’s just not the government’s job. If we think that child-raising is of prime importance, the first objection is easily countered: simply offset the benefit by increasing taxes somewhere else, as Sen. Mitt Romney, R-Utah, has proposed. The second objection can be countered by tying the child benefit to earned income, as scholars at American Compass have proposed, essentially matching every dollar parents earn up to $400 per month per child. This proposal would offer more encouragement to work, not less, addressing one of Sen. Manchin’s main concerns with the Biden plan.

But what about the last objection? Maybe it’s just not the government’s job to pay people to have children. This seems obvious to many conservatives, but maybe it’s time to think outside the box. For one thing, even the most generous proposals fall well short of the actual cost of child-raising. The question is not whether the government should “pay people to have children,” but whether it is in our national interest to help cover some of the immense costs of doing so. At a time when many Western countries, including the United States, are facing a demographic winter, any policy proposals that have a chance to reverse plunging birthrates deserve serious consideration. Moreover, as Christians, we believe there are few things more important for our society or the world than bearing and raising children. Wouldn’t we want government policy to reflect that priority?

At the root of our hesitation, perhaps, is the classical idea that government exists simply to prevent and punish harmful actions, not to encourage and reward virtuous and wholesome acts. But this idea falls short of Biblical truth. Both the Apostle Paul (Romans 13:3) and the Apostle Peter (1 Peter 2:14) describe government as ordained by God “to punish those who do evil and to praise those who do good.” Historically, Christians have understood such “praise” as including positive reward and encouragement. If so, and if there is scarcely any temporal good greater (and any temporal task harder) than bearing and raising children, then why shouldn’t conservative Christians support a government family policy that uses public resources to reward and support this critical good?

To be sure, the road to hell is paved with good intentions, and even the best policies will have trade-offs and unforeseen consequences. Any proposals for long-term government child support should receive careful scrutiny and spirited debate. But it is high time for Christian conservatives to play an active, constructive, and open-minded role in that debate.