Mitt Romney pushes cash for kids

Republicans and Democrats alike have supported sending direct payments to Americans to help them financially during the pandemic. Now, Sen. Mitt Romney, R-Utah, wants to make the idea permanent by sending regular checks to parents with children.

Romney’s plan, called the Family Security Act, would overhaul family tax breaks and welfare to create a child allowance of $350 a month for children younger than 6 and $250 a month for kids up to age 17, with a maximum allowance of $15,000 per year, or $1,250 per month per family. Supporters of the proposal, including some conservatives, say it would correct the anti-marriage effects of the existing welfare system, but not all Republicans agree the changes would benefit families in the long run.

The U.S. welfare system has not seen comprehensive reform since 1996, while “the modern economy has left families further behind … forced to navigate a maze of complicated programs with few assurances,” Romney’s proposal states.

The child allowance would replace direct cash welfare to low-income households known as Temporary Assistance for Needy Families (TANF). Congress would fund the payments by eliminating the state and local tax deduction (a federal subsidy for high-tax states) and ending the head-of-household filing status, as well as a daycare-related deduction. The plan would also reform the earned income tax credit, cutting the program’s spending from $71 billion to $24.5 billion, in part by removing the child tax credit.

Parents would be eligible to apply for the allowance four months before a baby’s due date, a pro-life feature. It would be available to families with income levels starting at zero and phasing out beginning at $200,000 per year for an individual or $400,000 per year for a married couple—similar to the current child tax credit.

Some conservatives praised Romney’s proposal as a step toward reducing child poverty and removing the welfare system’s marriage penalties. Many individuals who now receive TANF see their benefits quickly reduced or eliminated if they marry and combine their income with their spouse’s.

Ramesh Ponnuru, a visiting fellow at the American Enterprise Institute, noted that the family size American women say they want on average is larger than what they have—and a child allowance could shrink the gap between the ideal and actual birth rate. The United States already has a birth rate lower than what is needed to replace the existing population, which could lead to a labor shortage and shrinking economy in the future.

W. Bradford Wilcox, director of the National Marriage Project and senior fellow at the Institute for Family Studies, said that as the United States approaches the lowest fertility rates in its history, “It is imperative that Congressional Republicans put their money where their mouth is on family issues.”

But some conservatives argue a child allowance would have a negative effect on work, marriage and fertility rates.

“Romney has good goals, but his plan moves existing money around in a way that is anti-work and will undermine marriage,” said Robert Rector, a welfare expert and senior research fellow for the Heritage Foundation. He noted that TANF, eliminated under Romney’s plan, requires many of its beneficiaries to work, as does the child tax credit. Historically, welfare programs that gave parents larger benefits without work requirements led to less marriage and babies, he said.

The plan also represents a net increase in taxes—a tough sell to many Republicans even if the child allowance is designed to offset the hike. For years, Republican Sens. Marco Rubio of Florida and Mike Lee of Utah have advocated raising the child tax credit. Following the release of Romney’s plan, they criticized the child allowance as “universal basic income … not tax relief for working parents” but instead “welfare assistance.”