Tuesday, April 6, 2021

Under Biden and Romney Stimulus Plans, An Approach to Help Families

Under Biden and Romney Stimulus Plans, An Approach to Help Families

“In the old days, we thought that the more complex things were, the better targeted they would be,” said Diane Whitmore Schanzenbach, an economist at Northwestern who has studied social welfare systems. “We’ve learned in the last 20 years that the more complex things are, the more likely the worst-off people will drop out.”

If American parents were receiving monthly deposits, they would be highly aware of them — which could make the programs more popular and politically durable. Currently, for example, Social Security is very popular even though it has progressive features that favor lower-income Americans. (Notably, Mr. Romney’s proposal would distribute the child allowance, beginning mid-pregnancy, through the Social Security Administration rather than through the tax system.)

Also, under both plans, many more people would be eligible for the checks than receive current child benefits. Among them would be the parents of 27 million children (parents who do not earn enough to qualify for the current child tax credit), including the parents of about half of all Black and Latino children. It would also include rich people — in Mr. Romney’s plan, all parents would get the checks, and couples earning $400,000 and up would be expected to repay some or all of it at tax time.

“This would be tangible and noticeable, and I think that’s all to the good in making it politically sustainable,” said Chuck Marr, senior director of federal tax policy at the Center on Budget and Policy Priorities. “Society is acknowledging that kids are expensive.”

Finally, the Biden and Romney plans would abolish the work requirement attached to most family benefits, and would make them available both to parents who stayed home and to those who paid for child care.

At $3,000 a year for parents of school-aged children, the benefit wouldn’t be large enough to substitute for a job. But it’s an acknowledgment that children need financial support, regardless of their parents’ employment status. Mr. Romney’s plan underlines this idea by changing one of the main benefits for poorer families, the earned-income tax credit. Now, it mostly supports low-income working parents, but the new plan would repeal the credit’s child benefit, making it primarily focused on rewarding work, regardless of parental status.

“This is a real departure, and I think it’s a recognition that it’s not your child’s fault if you’re not working, and your child is most definitely the one who suffers if you don’t have income,” said Elaine Maag, who studies tax policy and programs for low-income families at the Urban Institute.

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