The Family Security Act: A Government Plan to Subsidize Children – Joe Carter

The Story: Sen. Mitt Romney of Utah has proposed a new plan that would give monthly cash payments to parents and reform federal aid for low-income Americans. Should Christians support such a policy?

The Background: In early February, Sen. Romney released a new plan called the Family Security Act that would have a profound effect on American families with children.

The proposal creates a child allowance of $4,200 per child under age six (to be distributed at $350 per month) and $3,000 per child ages six to 17 (to be distributed at $250 per month), administered through the Social Security Administration. Any child with a Social Security Number is automatically eligible. The maximum allowance per family would be $15,000 per year, or $1,250 per month (which would limit the benefit for families that have four or more children under the age of six or six or more children from the age of six to 17 to $15,000 a year).

Parents would be eligible to apply for the benefit four months before the child’s due date. The child allowance would also be available to families with no income, and would only phase out for the highest-earning households (single filers making more than $200,000 and joint filers making more than $400,000).

This plan would repeal the Child Tax Credit (CTC), which is currently administered through the tax code, and is worth a maximum of $2,000 per child. The CTC is subject to a $2,500 minimum-income requirement, a phase-in rate, and a maximum refundability of $1,400 for workers with no tax liability to offset.

To measure the effect of this plan, consider a married couple with two children, ages four and nine, making $38,990 (150 percent of the federal poverty line). The couple receives an end-of-year lump sum tax return of $7,041. Under the Family Security Act, the annual benefit would increase by $2,318, and the couple would receive over 75 percent of the total amount through predictable monthly installments.

Sen. Romney estimates the expanded child benefit would cost $229.5 billion annually, which is $112.5 billion more than the CTC. To pay for the expanded child benefit, the Romney plan would make $66 billion in federal tax and spending offsets.

The Romney plan would eliminate head of household filing status, eliminate the Child and Dependent Care Tax Credit, eliminate the itemized deduction for state and local taxes paid, and eliminate Temporary Assistance for Needy Families. The plan would also change some eligibility for the Supplemental Nutritional Assistance Program.

Romney’s plan would also reform the Earned Income Tax Credit (EITC). The change would eliminate marriage penalties under the EITC, reduce improper payments and IRS audits by making it easier for families to claim the correct credit, and maintain the adult dependent component of the EITC separately to ensure no family earns less than the EITC in its current form. Romney estimates the reformed EITC would cost $24.5 billion annually—about $46.5 billion less than the current EITC.

According to the Niskanen Center, Romney’s child allowance would reduce U.S. child poverty by roughly one-third, and deep child poverty by half. (Detailed estimates by race and by state are available in the Niskanen Center’s “Analysis of the Romney Child Allowance”).

What It Means: “If you want more of something, subsidize it; if you want less of something, tax it,” President Reagan is widely quoted as saying. A subsidy, as defined by the Corporate Finance Institute, is an incentive given by the government to individuals or businesses in the form of cash, grants, or tax breaks that increase the supply of certain goods and services. When the government subsidizes corn or oil we have more of both commodities. But will we have more babies if we subsidize children?

Maybe so. “For decades, the family size that American women say they want, on average, has been larger than what they have,” Ramesh Ponnuru writes. “By changing economic and social conditions somewhat, a child allowance could shrink the gap between what the demographers call ‘ideal’ and actual birthrates.” Lyman Stone makes a similar point about family size.

Ross Douthat calls the plan “softly pro-life” and David French writes, “Given that we know financial concerns factor into the abortion decision, it strikes me that the Romney proposal provides a promising vehicle for using public policy to promote life even in a pro-choice administration.”

Even if it doesn’t increase the birthrate, by giving subsidies for children, Romney’s proposal advances natalism, the perspective that childbearing and parenthood are desirable for social reasons and should therefore be promoted. Christianity is inherently pro-natal, based on the first command God gave humankind: “Be fruitful and increase in number; fill the earth and subdue it” (Gen. 1:28).

By giving subsidies for children, Romney’s proposal advances natalism.

Of course, the Bible doesn’t prescribe a particular public policy position on this issue. As Christians we must try to align our Christian convictions —such as being pro-natal—with policy that is likely to fulfill our goals while reducing unintended consequences. While we cannot know for sure how effective the Family Security Act would be, we can compare it to similar programs. For example, this act is similar in many ways to the EITC, which has been the single most effective federal antipoverty program for working-age people in American history.

Christians can disagree about what government policy should govern the family, just as we disagree about how policy should affect the church. But perhaps we can agree that while many other social structures are equal in dignity and value—businesses, schools, unions—the family should nevertheless be considered “first among equals” and be given special consideration when we make decisions about public policy.

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