Published June 16, 2022
Last year, Sen. Mitt Romney jolted the D.C. policy conversation with his proposed Family Security Act. For the first time, an elected Republican was proposing collapsing the tangle of low-income tax credits and child-related provisions in the tax code into a single, monthly child benefit.
At the time, it was a bridge too far for other elected Republicans. But a retooled design and a new co-sponsor suggests that Romney’s Family Security Act 2.0 may thread the needle between different factions on the right and become a much-needed signature policy for the GOP on its quest to become the “parents’ party.”
Romney’s newly revamped child benefit offers stability and predictability to parents, encouraging families to have at least one parent in the workforce while not penalizing those couples who have a parent stay home with the kids (about one-quarter of married couples). It offers a subtle yet real encouragement of marriage, and it would begin providing assistance to expectant mothers during pregnancy. In short, it is exactly the kind of support for families Republicans should embrace as they prepare for the potential end of Roe and adjust to a new, working-class-centric policy agenda.
Republicans have generally, though not uniformly, been in favor of the original child tax credit, which reduces federal income taxes owed with the number of children in a family. It was, of course, a Republican Congress that passed the first CTC in 1997, as well as one that doubled the size of the CTC to $2,000 in tax reduction per child as part of the 2017 Trump tax cuts.
But parents who do not earn enough to owe that much in federal income taxes can’t take full advantage of the CTC. Due to the design of the credit, low-income and working-class families receive less than higher-earning families—about one-third of all children live in families that do not receive the full CTC amount.
In response, Romney’s original plan would have sent monthly checks to all but the wealthiest parents. By providing a benefit to parents with few to no earnings, and paying for it by eliminating the Temporary Assistance for Needy Families program, Romney was accused by some on the right, like AEI’s Scott Winship, of turning back the clock on the perceived success of mid-’90s welfare reform, and making it more attractive for low-income parents to drop out of the workforce.
Many on the left and some on the right tried to argue that decreased parental labor force participation wouldn’t be as bad as critics feared. “There is no intrinsic value to labor outside the home that raises it to a higher dignity than the work of parents,” argued Leah Libresco Sargeant, a conservative communitarian writer, in the pages of the New York Times.
But it wasn’t just elected Republicans and think tank analysts who had a problem with a benefit unmoored to participation in the workforce—it was voters, even the ones who would benefit from the proposal. Polling from American Compass, a think tank that seeks to reorient Republican economic orthodoxy, found that universal benefits weren’t universally popular.
In focus groups I conducted in conjunction with the Institute for Family Studies, we heard working-class parents say it was important that tax benefits feel earned. “A lot of people that don’t work and get the benefit, it’s a little unfair,” said one Ohio mom. “It’s going to just allow them to abuse it.”
This, I believe, contributed to the relative lack of popularity of the Biden administration’s expanded CTC last year, along with some implementation hurdles. By not having some visible connection to work, unconditional cash for parents struck too many as welfare through the back door—including, ultimately, Sen. Joe Manchin, whose reservations about the expanded CTC kept it from being extended.
With the expiration of the one-year pandemic expanded CTC, and polling showing a red wave, Republicans could, and should, prioritize delivering for working-class families. Romney’s Family Security Act 2.0 should be the model.
The Romney plan’s redesign stands with one foot firmly in conservative principles while being aggressive about using federal resources to support the institution of the family. Making the case for a child benefit rest too heavily on reducing child poverty leaves many Republicans cold, as conservatives rightly point out that having a working parent is the best way to escape the long-term effects of generational poverty. Instead, the FSA 2.0 now encourages families to have a connection to work, while making those benefits more simple and straightforward.
A simple example helps put this in context. Due to the current CTC’s phased-in benefit, Annette, a single mom making $17,000 a year with two school-age children, would receive about $2,635 in CTC-related benefits; her neighbor, Barbara, with two kids the same age and an annual income of $27,000, would receive $4,000. These benefits come annually, with some portion of the amount taken off their taxes and the rest sent as a tax refund. Instead, under the Romney plan, both moms would get a regular check of $500 per month.
Earning the benefit would be somewhat like earning frequent flier status—every family that earns at least $10,000 qualifies for the full monthly benefit of $250 per child (with an additional $100 a month for children under 6,) save for those bringing home $400,000 as a couple (or $200,000 for single parents). Parents who don’t earn $10,000 would see their benefit scaled down commensurably, to encourage work-force participation. Families could claim the benefit for up to six children, and could also opt into taking the traditional CTC on their tax returns instead, rather than the monthly payment.
By setting a single threshold, the revised Romney plan rewards marriage, as two potential workers can tag-team to qualify for the benefit. Less than 1 percent of married couples with kids made less than $10,000 in 2019, according to American Community Survey data. Instead of a sliding scale, the flat threshold avoids penalizing families that have additional children. And the plan is explicitly pro-life, allowing pregnant women to claim the credit four months before their child’s due date.
As in its previous incarnation, the plan would be run through the Social Security Administration, which is better suited to administering a social benefit than the IRS. It is made budget-conscious by eliminating the state and local tax deduction (SALT), which primarily rewards high-income residents of high-tax states. Romney also proposes streamlining the earned income tax credit to account for the more generous CTC, which would have the welcome side effect of removing marriage penalties and smoothing benefit-reduction cliffs. This version of the plan wisely spares TANF while eliminating head of household filing status and the child and dependent care tax credit, which affect a relatively smaller number of tax filers. While long-term budget estimates are always uncertain, Romney’s office estimates these changes would fully cover the cost of the new benefit.
Crafting the child benefit in this way rewards families who work while still offering some support to those who have lower earnings. And it also assuages conventional GOP fears of a new benefit incentivizing parents to drop out of the labor force. The new design won the support of North Carolian Republican Sen. Richard Burr, who has been heavily involved in child care and education space on the Hill, and Montana Republican Sen. Steve Daines, a staunchly pro-life legislator. Their endorsements suggest the bill has the potential to attract more support in the caucus as well.
Last week, the Republican Study Committee (RSC), led by Indiana Rep. Jim Banks, released its own slate of 10 principles to “Restore the American Family.” The RSC, made up of some of the most conservative members in the House, included language about giving families flexibility in federal benefits, incentivizing work, and holding that “supporting strong families should be the benchmark for conservative policymakers in both social and economic policy.” What that looks like in legislative text was left open, strategically, and could be easily married to the FSA 2.0.
The willingness of populist House members and moderate GOP senators to speak the same language about supporting working families is a signal moment for the Republican party. In the 2017 tax cuts debate, the Trump White House and establishment Republicans infamously chose not to support the efforts of Sens. Marco Rubio, Mike Lee, and others to make the child tax credit more generous to working-class families.
It is a mark of how far the party has embraced its new orientation toward families and non-college-educated voters that Romney and Burr, no one’s idea of populist firebrands, are leading the charge for a child benefit that would most benefit lower- and middle-income families. Their more red-blooded peers and would-be colleagues should join in.
The Romney plan is not the final word in conservative pro-family policy. The plan could be modified to give more support around the first months of parenthood, or Congress could take up paid leave in a separate proposal. The Child Care and Development Block Grant, which provides low-income parents with targeted assistance for child care, could be improved along the lines suggested by Sen. Burr and Sen. Tim Scott. And a cost-of-living agenda that focused on, among other things, boosting the supply of housing, would disproportionately benefit young parents.
But a benefit that meaningfully supports parents in a straightforward manner and with a clear connection to work should become the calling-card of a Republican coalition dedicated to making family life easier and more affordable. The latest iteration of the Family Security Act should be embraced by the populist and establishment wings of the party, so that when voters hear Republicans talk about being a party of parents, they’ll know GOP officials mean it.
Patrick T. Brown is a fellow at the Ethics and Public Policy Center, where his work focuses on developing a robust pro-family economic agenda and supporting families as the cornerstone of a healthy and flourishing society.