Senator Mitt Romney (R-Utah) on Thursday released a plan to provide families with a monthly cash benefit of as much $350 for each child, embracing calls by President Joe Biden and Democrats to increase the child care tax credit to help low-income Americans struggling during the pandemic.
Romney’s Family Security Act would replace the Child Tax Credit with a $3,000 yearly benefit per child — $4,200 for kids under the age of 5 — spread out in monthly installments that begin four months before a child’s due date, according to a summary of the proposal.
“American families are facing greater financial strain, worsened by the COVID-19 pandemic, and marriage and birth rates are at an all-time low,” Romney said in a statement. “This proposal offers a path toward greater security for America’s families by consolidating the many complicated programs to create a monthly cash benefit for them, without adding to the deficit.”
Romney’s proposal — which he predicts would boost nearly 3 million children out of poverty — is likely to get bipartisan backing, with a top White House official signaling support for his framework.
“Really looking forward to see what @SenatorRomney will propose here,” White House Chief of Staff Ron Klain tweeted on Thursday, “an encouraging sign that bipartisan action to reduce child poverty IS possible.”
The program would be administered through the Social Security Administration and would be funded by what Romney calls the consolidation of several other benefits.
His plan is designed not to increase costs on the government because it proposes eliminating the Temporary Assistance for Needy Families block grant, the Child and Dependent Care Tax Credit, and the “head of household” tax filing status, creating billions of dollars in savings for the government.
The TANF program provides grants to states and territories to give families financial help and support services, like child care assistance, job preparation and work assistance.
Romney’s plan would also be funded by revenue gained by eliminating the state and local tax deduction altogether. A provision of the 2017 federal tax law imposed a $10,000 limit on such deductions.
The Earned Income Tax Credit to low income families would also be simplified under the proposal to $1,000 for single earners and $2,000 for married couples, regardless of the number of children in the family.
Democrats have called for establishing a monthly child care allowance — suggesting it would better help families if they could get their tax credit in installments throughout the year as opposed to a lump sum at tax time — although it could be difficult for the Treasury Department to set up such a program.
They have been weighing a proposal to expand and transform the long-standing tax credit for children into the country’s first-ever child allowance as part of the next coronavirus stimulus package — although the plan was projected to cost more than $100 billion annually.