We’re a looooooong way from this moment. Remember?
Eight years and a thousand lifetimes later, Senator Mitt Romney just uncorked a family welfare plan so progressive that various lefty commentators are comparing it favorably to Joe Biden’s. Biden’s own chief of staff took to drumming up interest in it online this morning:
Really looking forward to see what @SenatorRomney will propose here — an encouraging sign that bipartisan action to reduce child poverty IS possible.https://t.co/7oOepQGpDQ
— Ronald Klain (@WHCOS) February 4, 2021
The Romney plan is called the Family Security Act and would make benefits to adults with children both more generous and more easily available than they are currently. Right now there are various obstacles to getting some sugar from Uncle Sam if you’re a parent. For starters, you only qualify if you have income: The current child tax credit is refundable, meaning that you get zippo if you’re not earning anything. It’s also capped at just $2,000 per year. And of course, being a tax credit, it doesn’t arrive in your bank account until tax season.
Romney wants to chuck all of that and start over. No more tax credits. From now on, families get a monthly welfare check depending upon how old their children are. Each child under age six gets $350 per month (or $4,200 per year, higher than Biden’s plan) while each child between the ages of 6 and 17 gets $250 (or $3,000 per year), with a total monthly cap of $1,250 (i.e. $15,000 annually) per family. Importantly, there’s no income requirement anymore. Because it’s not a tax credit, there’s nothing to “refund.” If you have a kid and your household is below the very high income cutoff of $400,000 you get a check — even if you’re out of work.
And in fact, Mitt’s plan does compare favorably to Biden’s plan in terms of generosity of benefits:
Romney’s Child Allowance Improves on Biden Proposalhttps://t.co/0KX55EGojM pic.twitter.com/KtvEwzygI6
— People's Policy Project (@PplPolicyProj) February 4, 2021
It’s a “reformicon” dream. The reformicons were centrist wonks like Reihan Salam and Ross Douthat who countered conservative orthodoxy during the tea-party era by insisting that taxing and spending weren’t *always* bad. It depended on what the taxing and spending were for, they said. A party like the GOP that claims to stand for the family might reasonably decide to tweak the tax code to ensure that more benefits accrue to families, partly to encourage people to have more children and partly to stabilize existing families that might otherwise fall apart under financial strain. That’s Romney’s explicit goal with his new plan: “We simply think this is about making a national commitment to America’s families,” an aide told HuffPost. By redistributing taxpayer money to lower-class families (well, to all families, but the lower class will benefit most) he’s embarked here on a populist program that should intrigue nationalist colleagues like Marco Rubio, Mike Lee, and Josh Hawley.
According to the Niskanen Center, Romney’s proposal would put a major dent in America’s child-poverty problem:
“We have not comprehensively reformed our family support system in nearly three decades, and our changing economy has left millions of families behind,” said Romney, the GOP’s 2012 presidential nominee, in a statement. “Now is the time to renew our commitment to families to help them meet the challenges they face as they take on most important work any of us will ever do — raising our society’s children.”…
Romney’s plan would have a dramatic impact on lowering child poverty, according to an analysis by the Niskanen Center, a center-right think tank. The percentage of children in poverty would fall by about 32 percent, with close to 3 million lifted out of poverty. Additionally, the percentage of children in “deep poverty” would fall by about 50 percent, meaning about 1.2 million children would be lifted out of deep poverty, the analysis found.
It’s hard to imagine any Republican endorsing a plan to send welfare checks directly and regularly to taxpayers pre-COVID, but the pandemic and its scheme of relief payments have clearly moved the Overton window. Liberal commentators of various stripes are in raptures upon seeing a well-known Republican — and former party nominee, no less — embracing an anti-poverty program that would redistribute billions every year to families in need.
This is a good plan by @MittRomney, and Democrats should eagerly work with him to pass it. There's items worth debating in here — particularly the pay-fors — but what a wonderful world where this is what we were debating. https://t.co/4Ii1vwoUWw
— Ezra Klein (@ezraklein) February 4, 2021
If this gets done, Romney will have a footprint in American social policy that rivals presidents, given his birthing of Obamacare. https://t.co/EPW295PtFo
— Josh Barro (@jbarro) February 4, 2021
Gov't programs that aid the poor are invariably full of paperwork, convoluted eligibility requirements and barriers that trip people up. This is what they look like: https://t.co/rPwqBvqB9r
One great advantage of Romney's proposed child credit is that it would have none of that.
— Emily Badger (@emilymbadger) February 4, 2021
The big breakthrough with Romney and other proposals now, which is why anti-poverty groups are so enthusiastic, is that they would kick in to ALL families, not just incomes above a certain threshold. This runs into 80s/90s-era fights about welfare with much less cachet right now.
— Benjy Sarlin (@BenjySarlin) February 4, 2021
The eternal question: How are we going to pay for this? Romney’s solution is to make his bill deficit-neutral by scrapping a bunch of existing welfare programs and tax deductions/credits. Temporary Assistance to Needy Families would be out. So would the current child tax credit, of course. Same goes for … the state and local tax deduction, a Democratic favorite given all of the wealthy communities Team Blue represents. That’s why Romney’s plan will probably struggle to draw votes in the Senate despite the liberal praise for it. It’s too generous for most Republicans but it’s also too stingy in its pay-fors for most Democrats. Some Dems will rule it out on grounds that the SALT deduction is sacrosanct; others will dislike the idea of cutting programs like TANF, which some lower-income families rely on, instead of hiking taxes on the rich. (“The question is how you’d finance a child tax credit expansion for low-income kids,” said one lefty think-tanker to Vox. “Their answer, largely, is to take away resources from low-income kids.”) Conservative critics like Robert VerBruggen also get anxious about the effect a potential $15,000 stipend per year will have on the incentive parents have to work:
The [earned income tax credit is possibly the most popular anti-poverty measure among conservatives. Basically, it rewards the poor for working, helping to ensure that work pays better than welfare. Some research has found that it’s effective in pushing single parents to find jobs — though there are also good reasons to be skeptical, recently laid out in a study from Princeton’s Henrik Kleven. Other common criticisms are that it gives very little money to the childless, making it a weird hybrid of a work subsidy and a parenthood subsidy, and that it imposes a marriage penalty. Plus, like any welfare benefit, it starts phasing out at relatively low incomes.
Since Romney’s child credit would replace much of the aid that the EITC gives to parents, he’d transform the credit into a work incentive solely for adults. Single people could get up to $1,000 a year, and married people twice that, regardless of how many kids they had. This would cut spending on the credit by about two-thirds. It’s a defensible change, but some may worry about shrinking a pro-work tax credit to fund one with no work incentive at all.
An important footnote to Romney’s plan, though, is that its deficit-neutrality means it can be made permanent through budget reconciliation. Biden’s plan is a one-year temporary measure because it would add to the deficit; to make it permanent he’d need to either figure out a way to make it deficit-neutral after 10 years or find 60 votes in the Senate to pass it the old-fashioned way, which ain’t happening. Romney’s plan, by contrast, could be passed with 50 votes if Dems adopted it and added it to Biden’s COVID relief package. That ain’t happening either given the lefty anxiety about some of the pay-fors Romney prefers, but his proposal may be a starting point for Dems to find alternative ways to cut other, more palatable forms of spending to make his plan feasible. Imagine if Mr. 47 Percent ended up partnering with the guy who was on the ticket opposite him in 2012 to pass the largest expansion of benefits for American kids in ages.
In a way, Trump would deserve ultimate credit. Without him coming along to blow up tea-party orthodoxy about spending, it’s unimaginable that Romney’s plan would gain any sort of credence on the right. Trump exposed the fact that the GOP’s devotion to small government is an inch deep and that there’s much more appetite for a nationalist program of activist government than Reaganite dogma would have you believe. Romney’s seizing that opportunity to do penance for his infamous comments eight years ago.