Romney Revamps His Family Security Act

And this time, he’s got company.

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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.

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  1. Avatar photo
    Ben Connelly

    I’m more open to this version than I was to the last version. Seems like a step in the right direction.

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    Ms. SSM

    Why does the article keeping using married couple stats? For example “ Less than 1 percent of married couples with kids made less than $10,000 in 2019, according to American Community Survey data. ”. Isn’t the relative question how many PARENTS make less than 10k? It’s a weird data choice that makes the info in this piece seem incomplete. I like the plan but I’d have liked more complete info on the plan not what we got which seems cherry picked.

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      O.W.L.

      What I read is that the wage floor is set so low that they can tick the "is there a work requirement" box to satisfy the concern that lazy loafers would be wallowing on their sofas and collecting that sweet, sweet $250 per month per kid. So yes, there is a work requirement but it is so low that only the edge cases would be excluded from the benefit. It is a fig leaf. Smart policy in my opinion--if you are making a lot of money, the child stipend won't affect your family the same way it would for a couple who has 2 kids and is trying to get by on less than $50K per year.

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    Ms. SSM

    Well. Everything Romney wants to get rid of -HofH filing status and dependent care credit - will negatively impact me. And I’m just over the limit to be eligible for his plan. That’s a bummer for my personal wallet. I have really bad luck with child tax credits.

    However substantively the plan isn’t bad. It’s just got needless features like work requirements. An unmarried parent who is the child’s primary caretaker shouldn’t need to work to get the benefit. Maybe she’s in school. Maybe daycare costs more then work earns. We should stop micro managing parenting and just try to help. If we want more people to do it we should make our programs simple and universal. That’s the most cost effective program type. I mean I can live with an income cut off (as a pregnant person I’m only mildly bitter). But any other requirement to make people “feel” better seems pretty stupid.

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    Afalstein

    This is good. I would have preferred that pro-family policies like this would have been levied prior to the (rumored) elimination of Roe vs Wade; I think it would cut down on a lot of the charged feelings if having children were less of a burden. But regardless, this needs to go through. Population rates are dropping around the world, and if the US doesn't want to end up in the same boat as China, they need to start encouraging parents to have babies.

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      Scarlette Tarte

      It won't though. Other places with low birth rates have tried this and it never works. They have even tried direct payments for each child born as bonuses. It has never raised birth rates anywhere. Women, once in control of their reproductive choices, do not go back to having larger families. They always choose to have fewer, not more (with oddities like the Duggars being very rare exceptions)

      Better to increase immigration if you want a growing and prosperous nation paying a boatload of taxes.

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        Afalstein

        Increasing immigration is also a good idea, but IMO a stopgap measure. It doesn't really fix things, it just moves the problem down the line.

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    Paul Gerrard

    Doesn’t this create a scenario where people are more dependent on government.

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  6. Mathew A

    I think this is pretty reasonable. Having kids is expensive, this will help. It could also potentially help lower the abortion rate, also a good thing.

    Finally we shouldn't forget that the US birth rate has fallen below replacement levels. This won't solve that problem, but should help.

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  7. Duane Truitt

    A bill that encourages workforce participation is an inherently positive factor, given the labor shortage of the last year and a half. Perhaps if a recession hits next year as many predict, the labor market may get a little less tight. But even so, encouraging more people to work is the right thing to do. Perhaps incorporating incentives or benefits to obtain training or education to be able to get a higher paying job would also help.

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      O.W.L.

      I'm old enough to remember when conservatives thought mothers should raise their kids and not work outside the home. Now it seems like what passes for conservativism is that moms should be wage slaves. Who is raising their kids? No wonder nobody is having kids right now.

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      1. Duane Truitt

        Who cares about labels like "conservative"? I certainly don't, and most people don't except ideologues. What matters is good policy.

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    Rochejaquelein

    As others pointed out, this article skips over the critical fact that this is revenue neutral only because it kills the remainder of the SALT tax deduction, a pillar of tax policy since the dawn of the modern tax era. I like Romney and I am convinced by the policy, but its an absolute hard, hard, hard no for me if a a program that is supposed to benefit all Americans gets funded by completing a revolutionary and radical overturning of settled tax policy in order to actively discriminate against particular areas of the country.

    The power to tax is the power to destroy, and the modern Republican party seems hell bent on punishing and destroying areas and classes that don't vote for them in order to fund bribes to their new rural vote banks. I don't think that this is Romney's intention or thinking, but by using the completion of the SALT betrayal as a pillar for his policy he is using cheap and divisive tactics. If it was anyone else but him, I'd suspect the whole thing is a heads I win tails you lose bit of cheap partisanship pretending to be a bold move across the aisle and tailored more for political gains in November than actually passing.

    The conservative case for the SALT deduction is fairly simple and was once widely accepted. Conservatives should like taxation, and the policies it funds, to be located as far down the federalist ladder as possible, closer to the people who pay the taxes and benefit from the services. The higher up the ladder you go, the easier it is for people who not only don't pay the taxes but don't even know anybody who pays the taxes to vote themselves largess from the taxpayers. Catholics call this subsidiarity, but its an idea that at least used to be part of Conservative federalism.

    Being able to deduct state taxes doesn't mean people don't dislike the taxes -- its not a one for one offset for most people and they still see the money coming out of their paychecks. SALT deduction didn't stop Prop 13 or a host of other tax rebellions at various times. Nor did it stop low or no tax jurisdictions marketing themselves on that basis. But it does incentivize states slightly to fix problems with their own taxpayer's money first, at a level closer to the problems and the funding source. This is an affirmative good, a feature not a bug.

    Over time, far too many issues that should be local became federal, in particular welfare and social transfers. Some of this perhaps made sense -- as much as I loathe farm subsidies, there is perhaps an argument for a national approach to agricultural problems. Much of it did not. And all of it suffers from putting the maximum distance possible between the people paying the taxes and the beneficiaries of the wealth transfer.

    With the SALT deduction in place, certain states built high tax models and certain states low tax models under a commonly understood traditional tax regime. Utah and Texas could succeed with low tax models, but California (in addition to much waste) could take a different approach. Basket cases economically included both high and low tax states.

    That didn't stop far too many welfare programs being federalized from FDR to LBJ onward, but it created at least some incentives not to rely on DC for everything. Without SALT, thats gone.

    Historically, a handful of politically overrepresented states have been able to divert vast amounts of taxpayer money in one form or another from more productive states. Some (archetypically West Virginia, whether Byrd, Manchin or the new GOP WV) suck up taxpayer cash from Dallas, Chicago and the coasts and historically support cultures of welfare dependency on other peoples dimes -- remember LBJ started the war on poverty in Appalachia, always richer in political power than anything else.

    SALT deductions was one of the few things that put a brake on this. And lets not pretend that it was cut out of some noble ideological commitment. It was first gutted and now potentially eliminated because the new era is a divisive and regional party that wants to wage class war and punish areas of the country it doesn't like. Senator Cruz, among others, was quite clear when the original obscenity passed that it was done to punish the productive areas of blue states.

    If you want to raise my taxes again to punish me for where I live while funneling my tax dollars to people who live in states that vote for you, I distrust your politics and your policy, even if you are Mitt Romney.

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      O.W.L.

      Great point. I hadn't thought about it that way, so you changed my thinking. One of the arguments for capping the SALT deduction was that the tax advantages given to property owners (mortgage interest and property taxes are deductible) it distorted the housing market. Fair enough, but going after the property tax part of the equation seems to me a really inefficient way to correct that distortion.

      Perhaps a better way is to phase out the mortgage deduction, but keep the deductibility of state and local taxes for the reasons you outline. I think the 2017 cuts did some of this, although indirectly, by raising all of the standard deductions so that fewer people found that their mortgage interest expense was enough to make it worthwhile to itemize.

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      1. Mathew A

        If I had my druthers I would get rid of mortgage deduction, and SALT deduction.

        Just give everyone a bigger standard deduction. Stop the hidden subsidies.

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      David Chen

      "With the SALT deduction in place, certain states built high tax models and certain states low tax models under a commonly understood traditional tax regime. Utah and Texas could succeed with low tax models, but California (in addition to much waste) could take a different approach. Basket cases economically included both high and low tax states."

      How is this a good thing? A high tax model that isn't as high as the costs should be is not fiscally responsible at all. That's like if you can write off HOA fees by making improvements to your personal property. Why would anyone pay HOA fees at all if you can just keep improving your own lot?

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        Rochejaquelein

        We're not in the same HOA. We're in the same Police district. Federalism is about allowing different states to make different choices. Federal authority should be limited to where it is needed, which I'd argue should be much more limited than what it does now. The SALT deduction encourages spending at a local level.

        One of the biggest problems with California taxation and spending, despite the referendums, is that its too big, and power and spending aren't localized enough compared to, say, New Hampshire. This tends to over time produce overspending and misallocation of resources. Of course *the federal government is rather bigger*.

        I'd take these critiques more seriously if the deepest Red States weren't (with some admittedly huge exceptions like Texas and Florida) massively and consistently net recipeients of Federal funds. People high fiving about sticking it to the cities while living off of DC subsidies.

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          David Chen

          Then roll back the federal government as part of the proposal. If the Dems want their SALT deduction, make the fed much smaller.

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            Rochejaquelein

            But then who would pay for the rural Protestant herrenvolk, our natural lords and masters? Who would pay for ethanol and military bases the military wanted closed a decade ago? Who would pay for SSDI, whose per capita grant matched up so well with Trump’s vote?

            The “real Americans” get endlessly subsidized from the fed, brag about the “low tax” state they run and then throw away a century of tax policy to extract more money from the hated cities to fund them.

            That’s what this is about, takers taking more.

            I’m not a dem, but at least they’re honest when they take money from me. The new GOP base yells at me bout being a socislust while they cash my checks.

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      2. Mathew A

        You can try and justify it all you want, but tax breaks are a subsidy. They allow high tax states to foist off some of the cost of their high taxes on other states tax payers. That's wrong

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          David Chen

          Exactly. Its one of the things in the 2017 tax bill I liked.

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    3. Mathew A

      SALT deductions serve as a tax subsidy for high tax states. It reduces your total dollars taxed. Other states shouldn't have to subsidize your states high taxes.

      This is not punishing you for where you live. This is you bearing the full costs of the high tax state you live in instead of asking other people to subsidize it.



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        Rochejaquelein

        Did you read my explanation? The bit about federalism and states being a better place to raise taxes? Apparently not.

        Your reductive approach is correct only if you, like the wildest fringe of Great Society proponents, would prefer that the Federal Government do absolutely everything. If you take that view, then yes, its perfectly acceptable to have politically overrepresented rural areas run their "low tax" states while using a federal safety net paid for in reality by the other states, since only the federal government can redistribute wealth and run social programs.

        Of course, the problem with this is that then national politics in all its peculiarities and distortions decides who gets the cash, and the people taxed are frequently very different from the people paying taxes.

        This is of course very convenient if you live in a battleground state or one with quirky political power and a crap economy, as you can have zero taxes and let the other states pay for everything. But its not the American tradition, and its directly counter to the idea that power and choice, and the taxation decisions that go along with them, should be exercised at State or better yet local levels. Thats a conservative idea -- it used to be a core conservative idea.

        You want to talk about subsidies? Lets talk about a government sponsored mortgage insurance racket that has been carefully calibrated so as to benefit all but the wealthiest in most Red States while over time becoming useless to the middle classes in the big urban areas. That's a deliberate choice. Lets talk about the entire history of the State of Kentucky. Lets talk about vastly under market leases on federal land. Lets talk about the siting of defense industry jobs based on where Senators, not the best workers or infrastructure, are located.

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        1. Mathew A

          Raise taxes at the state level all you want. That doesn't mean the rest of us have to subsidize you

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            Rochejaquelein

            So you did not in fact read the explanation or engage the argument.

            Out of curiosity, do you live in one of the few states that is a net contributor to federal tax coffers? Because I do, based on figures from before the SALT betrayal funneled even more of our money to the red Protestant rurals.

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      PWLaw

      I was not happy when the 2017 tax law changed the SALT deduction. I was downright angry when Republican elected officials and their voters cheered the idea that it would punish blue state voters. I was among a very small portion of taxpayers whose tax rate increased under the 2017 tax law. The fact that I am self employed and pay the full fica tax makes it worse.

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    David Chen

    Am I the only one who initially thought someone threatened Romney and he's getting more security now?

    Crazy what one's first instinct is in this day and age.

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    EricRemcon@gmail

    Am I the only one here that thinks the federal government should not be collecting federal tax dollars from ALL, then giving to the preferred group (in this case families)?

    Even if this plan ends up being paid for (highly improbable because few government spending bills are truly paid for in the end) we will be raising taxes (eliminating SALT) and using the money for a new benefit. If we are OK with raising taxes, how about dealing with the $1T yearly federal budget deficit (not to mention the $30T debt) before we start new entitlement programs. If we can raise taxes for families, then why not health care or college or mortgages or cell phone bills?

    Families are great. Government policy should be pro-family. I understand the arguments for a progressive tax code (cut struggling, low earners some slack). But I am against redistribution schemes, no matter the cause. We should definitely provide a helping hand to the poor (ex: food, rent, assistance) but not decades long or life time handouts (ex: food stamps forever as long as you stay below a certain income level). Monthly per child payments is a decades long handout (redistribution).

    Federal tax revenue should be used for community wide benefits (military, law enforcement, courts, interstate trade support (roads)). Federal tax revenue is confiscated, there is no opting out. If a local community or state decides that families are a priority, they can use local tax dollars to support that and those that don’t agree with that premise can move elsewhere.

    I’m sure that many would argue that families are a community wide benefit, but that seems squishy to me. The same thinking could be applied to health care, actually it already is in the form of Medicare and Medicaid. Both of those program’s budgets are exploding and will be insolvent in a decade without changes. The federal government’s reach and fiscal responsibilities have been expanding outside of the original intent for nearly a hundred years.

    I thought classical conservative thought stood for a small, focused federal government, not small government – unless I agree with the cause ???

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    1. Mathew A

      "Am I the only one here that thinks the federal government should not be collecting federal tax dollars from ALL, then giving to the preferred group"

      I'm sympathetic to this view. But we've had a welfare state for 50+ years now, and getting rid of it doesn't seem to be much of an option (note SS and Medicare are also welfare, that's why their is an unfunded entitlement obligation).

      Moreover, since birth rates have fallen below the level needed for a stable population, we should probably take steps to offset this if possible.

      Think of it this way, raising kids is REALLY expensive. And those kids will be future tax payers and pay WAY more in taxes back.

      Final though, we don't want kids to go hungry in this country.

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        Scarlette Tarte

        People are not going to have more kids because of this program. While I applaud and support it (although I do not believe in making children of non working parents suffer by denying them the full benefits) if Republicans are doing this to encourage more "baby having", then they are misguided.

        Women, once allowed to determine for themselves how many children to have, will always decide for fewer, not more. This has been shown to be the case in every place where birth control has been introduced and where women encouraged to use it. This is a good thing, and also protects valuable resources, of both the family and society. Ecologically speaking, it's the best thing.

        No offering of money has ever made women decide to have more children. France comes to mind. The offered solid cash benefits, free au pair services (for a few months after child birth) and a myriad of other benefits all in an effort to get women to produce more French citizens.
        It has proved a failure.

        Far better to have this program just to help families with kids, and then actually get behind improving our immigration system and upping the numbers of people working in this country and paying taxes that way. Higher numbers of immigrants is actually the way to go if the goal is more people working and paying taxes to support our economy and our social programs, not to mention find things like the most expensive military on the planet.

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        1. Mathew A

          I do know that in all developed countries birth rates are declining, and most (all?) of them are now below the number needed for a stable population.

          And while I agree that could have some ecological benefits it will first cause HUGE social problems. For one, our entitlements programs are built on ever increasing population.

          Moreover, increasing immigration levels to the point where it makes up for a declining birth rate will cause other social problems.

          Finally, within the next couple of decades, global population growth will start to decrease. So you probably won't even be able to get immigrants.



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      David Chen

      I agree that our deficit is nuts and in theory, the most responsible thing would be a long period of belt tightening to try to chip away at it. It would also infuriate tons of people who (rightfully) see it as "the olds ran up this debt, and now the youngs have to pay it off."

      But we either need to be pro-family or pro-immigration or the country will wither and die from just aging. Pro-immigration seems to be a lost cause politically, so this may be the next best thing.

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        O.W.L.

        We could always...raise taxes. For half a century, Republicans have been cutting tax rates. If Americans want the government to fund things like retirement pensions and health insurance, along with guaranteeing the security of the free world, and myriad other programs then let's just be honest that that is what we want and be willing to pay for it.

        And before you @ me with "Americans don't ALL want to have these things" I'll just point to the fact that Republican administrations have never taken away a significant benefit. They just talk big. They know if they did their voters would do more than erect a gallows in front of the Capitol.

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          Scarlette Tarte

          Our tax rate is actually too low. We should raise taxes. With or without this program.

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        rlritt

        Women just aren't going to have more kids just to fuel the workforce. And at some point it's not reasonable to work and pay day care for more than a couple of kids.

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          O.W.L.

          That's the beauty of Romney's plan though. The child tax credit is roughly the amount of money a middle-income working person nets after paying for child care and taxes. When we were expecting our second, my husband and I sat down and did the math. At the time I made about 40% of the household income; he made 60%. With two kids in daycare, the actual cash money that would be in our bank account after daycare, taxes, and the cost of a second car was....(wait for it)...$225 per month. So we sold the second car and I took care of the kids full time for three years.

          It was a relatively short period of time in the great scheme of things, and our quality of life was worth far more than the $225 per month we didn't have available to spend each month.

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        Man-Eating Cow

        I believe in a generous immigration policy.

        But I do believe we need to have a policy.

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          David Chen

          That would be a start.

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        EricRemcon@gmail

        I’m with you on the pro-immigration front. Legal immigration (with reasonable assimilation, not a bunch of mini – Mexico or India or China or Russia cities/states) is a positive for the economy, the country (collect the innovators), and a traditional American principle.

        Federal tax collection for redistribution purposes, even if it aids the aging population problem, is not an American democratic principle. If we are fixing the birth rate problem by encouraging more government dependency, are we really solving the problem?

        As far as who is left holding the bag after decades of mismanagement, that is a huge problem – that is why it needs to be talked about NOW and chipped away at instead of adding to the spiral with more mismanagement. The federal budget pay for scope and overall spending needs to stop inflating year after year!

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        1. Mathew A

          "If we are fixing the birth rate problem by encouraging more government dependency, are we really solving the problem?"

          A child tax credit is no encouraging more dependency. It's helping offset the costs of raising future tax payers.

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            David Chen

            I agree with this characterization more. Children are damn expensive in every way. I can't imagine how much aid would create actual dependency.

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          David Chen

          A generalist cash stipend is less distorting than say - financial aid.

          I dunno. I regularly see our government spend tons of money to no benefit except maybe a small amount of special interest groups that do nothing for the country (unions, big co, etc). This seems like an improvement over that status quo.

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