Williams: Biden’s Proposed Child Tax Credit Is Smart Fiscal Policy, But That’s Not the Real Reason America Should Take Better Care of its Children
As more details of the Biden administration’s pandemic recovery plans came into focus last week, one element — aimed at reducing child poverty — stood out.
The proposed child tax credit would provide monthly checks to American parents to help them cover the costs of having and raising healthy children. The size of the checks would be linked to the income and number of children in a family, with each child under the age of 6 qualifying their family for a total of $3,600 across the year (i.e. a family with two toddlers would receive $7,200 across the course of a year), and each child between 6 and 17 qualifying a family for a total of $3,000 annually. Individuals with incomes over $75,000 and couples making more than $150,000 would receive smaller benefits. This represents a significant expansion (and improvement) of the existing child tax credit, which is only delivered annually and is not fully available to many low-income families.
While the approach would be a novelty in the United States, these sorts of child allowances are common in other developed nations, such as Canada, the United Kingdom, France, and many others. The awful juggling acts the pandemic has imposed on millions of working American parents have made it clearer than ever that caring for children is work — inestimably valuable work. Child allowances recognize that the public has a real interest in valorizing and supporting families for taking it on. Early analysis suggests the proposal could reduce child poverty by more than 50 percent in our country.
So far, the administration’s proposal would currently cover just one year of payments, as part of a broader pandemic recovery plan. But some in Congress are interested, including Senator Mitt Romney (R-Utah), in extending some sort of child allowances for at least several more years.
If made permanent, these child allowances would represent a generational sea change for present — and future — American families. That’s because, in this country, we may talk as if our children’s lives are precious, but … when it comes time to walk that talk, we usually wind up discounting them all the same. U.S. spending on programs targeted at supporting families and children is lower than any other major developed country, and children’s share of the federal budget has been falling for years.
Our kids bear the costs of our national parsimony. When children’s families, particularly early in their life, struggle with poverty, that can directly affect their long-term development, health, and academic achievement.
What’s more, lower-income homes are more likely to face housing and food insecurity, as well as other impactful trauma. Worst of all, a large body of neuroscientific research has found that constant exposure to these sorts of pressures, known as “toxic stress,” can cause long-term damage to children’s brains.
Since President Biden’s child allowances plan would likely cost over $100 billion annually — or about $70 billion less than the annual lost tax revenue from the Trump administration’s 2017 tax cuts — it’s inevitable that the coming debate will be largely conducted in the language of budgets and balance sheets. But here’s the thing: it’s actually vastly more expensive to build systems to overcome the negative early developmental, health and academic patterns that can result from an economically precarious childhood.
There’s ample evidence from Nobel Laureate economist Dr. James Heckman and others showing that efforts to improve children’s long-term social, educational and economic trajectories are most efficient in the early years. It’s relatively cheap to change a child’s prospects when their brains are young and still growing — and poverty-related stress hasn’t yet reached toxic levels. These efforts only get less efficient as they grow older.
Grade repetition and additional educational services for struggling students are more expensive and less effective. Career training for struggling workers in their 20s and 30s is even less efficient. And so forth, all the way up to mass incarceration, which perhaps represents the nadir of inefficient public policies — it drains resources while squandering human capital. And indeed, the United States’s low spending on families and young children have delivered us the highest incarceration rate of any country in the world.
Child allowances offer a simple proposition: the country will save significant resources by supporting families at the outset, when children are young. Research suggests that when a family’s income goes up, children’s well-being improves in both the short and long term.
And yet, don’t miss the paucity of that proposition — the inadequacy of framing kids’ development in terms of return on investment. Whatever sense it makes to think this way as a congressional budget staffer or a macroeconomist, it is wholly unsuited to talking seriously about children and childhood.
What does the line—“[he] cut the number of children in poverty by as much as 54 percent”—really mean anyway? It’s the sort of phrase you etch into a presidential memorial in 30 years. It’s a topic for a panel discussion on public policy. But it’s not the actual point.
The point is that children are both vulnerable and blameless. They are born into a world they did not choose. Each child’s life is ultimately her own project to develop and complete, but it is many years before she gets to take control. She deserves a childhood free from want, a childhood in which she is cared for, safe and well fed. A country as rich as ours can choose to reduce child poverty because doing so will improve children’s academic achievement and allow us to reduce our spending on remedial education, health care and more.
Or we can reduce child poverty simply because she deserves a real chance to grow into a healthy adult life full of opportunities to thrive. We can do it because there is no actual virtue in allowing millions of children to suffer simply to flatter our national disinclination to pay for a humane, modern, developed, democratic society. Or, put simply, we must do it because it’s the right thing to do.
Conor P. Williams is a fellow at the Century Foundation, a progressive think tank. All views expressed here are his alone.
Support The 74's year-end campaign. Make a tax-exempt donation now.