Senator Mitt Romney’s proposal to consolidate several child-related benefits into a flat child allowance is a noble but misguided effort to reform the social safety net. A flat child allowance would return U.S. anti-poverty efforts to the unsuccessful policies of the past — when federal welfare policies devalued work and undermined state-led efforts to fight poverty. Rather than enacting a flat child allowance, Congress should prioritize policies that strengthen connections to work and help more poor families become upwardly mobile.
Last week, Senator Romney outlined a plan to consolidate the Earned Income Tax Credit (EITC), the Child Tax Credit (CTC), the Child and Dependent Care Tax Credit (CDCTC) and the Temporary Assistance for Needy Families program (TANF) into a flat child allowance and a simplified EITC. Romney’s plan would consolidate these programs into a monthly check of $350 for every child age 0–5 ($4,200 per year) and $250 for children age 6–17 ($3,000 per year). All families with income under $400,000 per year ($200,000 if single) would receive a check — regardless of their employment status or income — departing from a current model that largely benefits working families, many of them low-income. Additionally, the proposal would replace the EITC with a small earnings credit. Senator Romney proposes to pay for his plan by eliminating TANF and the CDCTC, and by eliminating state and local tax deductions.
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