WASHINGTON, DC – Democrats in Congress announced a plan to provide lower and middle-class families with direct cash payments per child as a means of strengthening family stability and reducing childhood poverty.
This plan would dramatically reform the Child Tax Credit, increasing the annual amount from $2000 to as much as $3600 per child and allowing families to receive the credit in monthly installments rather than in an annual lump sum after filing taxes.
The announcement comes just days after Senator Mitt Romey (R-Utah) announced a similar plan with a maximum payment of $350 per month ($4200 annually) for each child under six and $250 per month ($3000 annually) for children between the ages of six and 17, allowing up to $15,000 in direct payments annually per family.
While Romney’s plan would eliminate other federal tax credits and programs (namely the Temporary Assistance for Needy Families (TANF) fund), the plan endorsed by the Biden White House would leave those programs in place. However, both plans would make any child with a social security number eligible, all but eliminating work requirements for parents in need.
Even though the dual proposal of direct monthly payments from both sides of the aisle presents a significant step forward for child advocates who have long pushed for reforms to increase government support programs’ effectiveness, some Republicans have already criticized both Romney and Biden for their efforts.
Senators Marco Rubio (R-FL) and Mike Lee (R-UT) have called the plans “welfare assistance,” decrying the notion of expanding federal support for children whose parents are not currently working.
It is unlikely that Rubio and Lee’s proposal of an increase in the tax credit alone would do much to lift large numbers of children out of poverty.
By contrast, Romney states his plan, which is deficit-neutral and fully funded for at least the next five years, would lift roughly three million children out of poverty. According to the Center on Budget and Policy Priorities, Biden’s plan would add $120 Billion to the national debt. Still, it would raise nearly 10 million children out of poverty, nearly seven million of whom would be children of color.
Both the Romney Plan and the Biden Plan are expected to be debated as a part of the upcoming COVID-relief package moving through Congress. Some combined version of the two will likely emerge in the final bill, perhaps dramatically shifting how the US Government attacks the issue of poverty through direct payments and moving millions of families closer to the middle class.