The Trouble With Mitt Romney’s Family Security Act
Sen. Mitt Romney (R–Utah) recently introduced a universal child allowance in an effort to reform federal welfare programs. That goal is worthy, but his means would be counterproductive.
For all intents and purposes, he’s proposing a kid-centric version of entrepreneur and aspiring politician Andrew Yang’s “basic income.” According to Romney’s summary of his own plan, “The Family Security Act would provide a monthly cash benefit for families, amounting to $350 a month for each young child, and $250 a month for each school-aged child.”
To his credit, the senator’s new proposed entitlement wouldn’t be unfunded. Romney would “pay for” the new child allowance plan by eliminating the state and local tax deduction, a tax break that mostly benefits higher-income taxpayers. He would also get rid of the head-of-household filing status and eliminate the Dependent Care Tax Credit, along with the Temporary Assistance for Needy Families program. Additionally, Romney’s plan would reform the Earned Income Tax Credit and reduce that program’s spending from $71 billion to $24.5 billion. The EITC has mixed incentives on work, suffers from large improper payments, and is mainly a spending program, thus financed by taxes on other people.
These offsets explain why the plan is advertised as “deficit neutral.” However, it would grow the size of government by increasing b
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