Have Kids? Mitt Romney and Joe Biden Want the Government To Pay You Thousands Every Year
President Joe Biden and Sen. Mitt Romney (R–Utah) are both pitching significant overhauls to the safety net programs for American families by proposing direct monthly child allowances paid to parents.
While the plans differ somewhat in their specifics, both aim to subsidize the costs of raising children in a more direct way than the federal government currently does, a noble goal that would likely boost the economic prospects of poorer parents who may not be able to access the full value of benefits provided via the current tax credit system. But with the country more than $27 trillion in debt, both plans ultimately amount to a promise to hike taxes on the very children that the government would go deeper into debt to subsidize—although Romney’s plan does offset some of the new costs by shuttering existing welfare programs—and both may unintentionally hobble the incentives for poor parents to remain in the workforce.
Biden’s plan, currently included as part of the $1.9 trillion COVID-19 relief bill the House is drawing up, would send parents an annual total of $3,600 per child under age 6 and $3,000 per child aged 6-17. The payments would phase out for single parents earning more than $75,000 annually and for couples who earn more than $150,000. Although it is officially just a one-year program (payments would be allocated beginning in July and based on 2020 income taxes), The New York Times reports that the goal is to eventually make the change permanent.
Romney’s plan offers slightly larger benefits that would extend to a more expansive set of parents, but it would also abolish other welfare programs that Biden’s plan would maintain. Romney would pay parents an annual total of $4,200 for every child under the age of 6 and $3,000 per child aged 6-17, with the payments phasing out for individuals who earn more than $200,000 annually or couples earning more than $400,000. It is intended to be permanent from the start.
If a parent (or parents) qualified for the full payments during all 17 years of a child’s eligibility, he or she would receive a total of $57,600 per child under Biden’s plan and $62,600 under Romney’s.
As with any expansion of the federal welfare state, the first question that should be asked is how much will this cost and who will pay for it. Romney’s plan comes with an estimated price tag of $254 billion annually, but the senator says those costs are fully offset with a series of changes to existing welfare programs. The child allowance would replace the existing child tax credit program and require a significant overhaul of the current earned income tax credit (EITC), which offsets taxes for low-income families. He would also permanently abolish the state and local tax (SALT) deduction, whic
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