It’s the moment we’ve all been waiting for: Sen. Mitt Romney (R-Utah) is bucking his party and endorsing a Democratic initiative that long should have been bipartisan one. This politically courageous stance is raising hopes that more Republicans might follow his lead.
On Sunday, Romney and Sen. Michael F. Bennet (D-Colo.) unveiled a promising bipartisan proposal that would expand the child tax credit. But more than that, it potentially signals a coming Republican Party realignment over the federal government’s obligations to families. That’s because Romney is the first GOP lawmaker ever to endorse what’s known as a “fully refundable” child tax credit, according to Joshua McCabe, an Endicott College professor and author of a book on the politics of the child tax credit.
The Bennet-Romney proposal expands the child tax credit in two key ways. First, it makes the existing credit more generous to families with children under age 6 by raising its maximum value to $2,500 (vs. $2,000 available under current law).
Additionally, and perhaps more historically significant: The proposal would for the first time ever extend the child tax credit to the very poorest children by making the first chunk of the credit available to families regardless of income. That is, families with kids might have very low or even zero earnings (think: a single mom working toward a degree, say, or a retired couple raising their grandchildren) and still get a significant check.
The technical term for this is that the first $1,500 of the credit for children under age 6 (or $1,000 for older kids) would be “fully refundable.” In practical terms, it means parents get money just for being parents, and they don’t have to do anything in exchange for the cash.
Even more astonishing, given Romney’s support, is that this proposal would be paid for largely by closing a capital-gains tax loophole enjoyed by the very wealthy.
Right now, the United States has one of the highest child-poverty rates among developed countries. That’s at least partly because we spend so little on families and children, despite ample evidence that income supports are associated with higher test scores, health and future earnings.
Democrats focused on anti-poverty efforts have long fought to change that. Bennet, who is running for president, has shown especially strong leadership on this issue, co-sponsoring three separate proposals this congressional session that would expand the child tax credit to varying degrees. The most generous of the proposals would cut child poverty nearly in half.
But there’s no reason this kind of idea should be exclusively a left-wing prerogative.
These policies, after all, possess a number of conservative virtues. Among them: They don’t require more government bureaucracy. They support stay-at-home parents the same as parents with careers. They don’t tell people how to spend the money. (They “leave paternalism to the parents,” as Niskanen Center’s Samuel Hammond put it.)
And they help Americans support larger families. Right now, demographic trends suggest that American women in particular are having fewer children than they say they would like.
But making the tax system (and safety net) more generous to kids — and, in particular, poor kids — has not exactly been a Republican priority of late. The 2017 Trump tax cuts were predominantly focused on helping corporations, with relatively small changes for child-related benefits, a reflection of the party’s decades-long shift toward prioritizing the interests of business over those of families.
Many Republicans have been outright hostile toward the idea of a fully refundable child tax credit, fearing it will discourage work among the very poor. The risk appears relatively modest, though some research even suggests that child-allowance programs support work, at least for certain demographic groups.
Meanwhile, a few GOP outliers — including Sens. Marco Rubio (Fla.), Mike Lee (Utah) and Josh Hawley (Mo.) — have been trying to carve out space for the party to show it is less plutocratic and more sympathetic to the needs of struggling families. Nonetheless, they’ve still resisted endorsing a fully refundable child tax credit, perhaps because of the historical Republican allergy to anything that might be branded as “welfare.”
Which is why it makes it so interesting that Romney — he of the infamous “47 percent” makers-vs.-takers comments — is now endorsing this proposal. His state stands to benefit quite a bit, of course, given the many large Mormon families who live there. But given this multimillionaire politician’s pro-business background, his endorsement might provide just the political cover that the Rubios, Lees and Hawleys of the world need.