Mitt Romney’s Plan to Pay Parents Up to $15,000 a Year

Mitt Romney’s Plan to Pay Parents Up to $15,000 a Year

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Plus, Dems debate limits for $1,400 relief payments
Thursday, February 4, 2021

Mitt Romney’s Plan to Pay Parents Up to $15,000 a Year

Sen. Mitt Romney (R-UT) on Thursday proposed sending American families a cash benefit of at least $3,000 a year per child as part of a plan that he says would immediately lift nearly 3 million children out of poverty.

Romney’s plan represents a Republican response to President Joe Biden’s call to provide more support to families struggling through the pandemic, signaling some bipartisan support for the idea. Romney’s plan provides more generous benefits than Biden’s, though it also proposes to eliminate some other popular benefits.

The details:
Biden’s $1.9 trillion coronavirus rescue plan calls for temporarily increasing the child tax credit, which now provides $2,000 a year for children up to 16 years old, to $3,600 for children under 6 and $3,000 for older kids.

Under Romney’s Family Security Act, parents of children up to 5 years old would get $350 a month, or $4,200 a year. Parents of kids ages 6 to 17 would get $250 a month, or $3,000 a year. Families would become eligible for the payments four months before a child’s due date, and the maximum monthly payment would be $1,250, or $15,000 a year. Like the current Child Tax Credit, the benefits would begin phasing out for individuals earning $200,000 and couples making $400,000. Any overpayments or underpayments would be reconciled through annual tax filings, meaning parents would still get monthly payments and would have to pay back any overpayments when they file their taxes.

How Romney would pay for his plan:
Romney says his proposal wouldn’t add a dime to the deficit — meaning that it could be made permanent under the reconciliation process rather than creating a temporary benefit, as Biden’s plan does.

To make his plan deficit neutral, Romney would eliminate what he calls “overlapping and often duplicative federal policies,” including the Child Tax Credit, now worth up to $2,000 per child for parents with income over $11,000, and the Temporary Assistance for Needy Families (TANF) welfare program. He would also revamp the Earned Income Tax Credit, cutting spending under the program by nearly $50 billion, and eliminate the State and Local Tax Deduction (SALT) and head-of-household status for tax filers.

In total, the Romney proposal represents a significant overhaul that would remake federal child support benefits, delivering monthly payments from the Social Security Administration instead of an annual tax credit and other benefits. You can find Romney’s summary of his plan here. An analysis by the right-leaning Niskanen Center think tank includes this breakdown of pay-fors:

The effects on child poverty: “The calls for upping aid to families with children come as the U.S. wrestles with a child poverty rate well above the average for wealthy countries,” CNBC’s Tucker Higgins reports. “About 17% of children in the U.S. — or 12 million kids — lived in poverty as of 2019, a number that had been slightly declining before the Covid-19 pandemic, according to the Kids Count project at the Annie E. Casey Foundation.”

Romney’s plan would bring more than 5.1 million people out of poverty, reducing the poverty rate by 14% overall and by nearly a third for children, according to the Niskanen Center analysis.

What’s next: The Romney plan garnered some praise from analysts across the political spectrum.

“The Romney plan is an improvement over the Biden plan in three ways,” Matt Bruenig, an analyst at the progressive People’s Policy Project think tank, wrote in a blog post. “First, it provides more benefits. Second, it uses the Social Security Administration, which should increase participation, among other things. Third, it likely phases out at a higher income level than Biden’s plan does, which will make the program easier to administer and more universal in its coverage.”

White House Chief of Staff Ron Klain tweeted that Romney’s proposal is “an encouraging sign that bipartisan action to reduce child poverty IS possible.”

But it’s not clear yet whether it can win the support of lawmakers in either party. The elimination of existing benefit programs and the SALT deduction may be a sticking point for Democrats.

“Take a deep breadth [SIC] folks,” tweeted Gene Sperling, who directed the National Economic Council under Presidents Bill Clinton and Barack Obama. “YES, it’s a big sign of progress for a Republican like Romney to back a child allowance. But, NO, we shouldn’t accept for a second that the way to pay for it is slashing EITC, SNAP & TANF instead of raising taxes on top .1%”

A White House spokeswoman told CNBC that the administration welcomed Romney’s focus on cutting child poverty hoped to work with Romney and others on a bipartisan plan that would provide aid on a permanent basis, and not add to the deficit.

Democrats Debate Tighter Limits for $1,400 Relief Payments

President Joe Biden says he has no intention of breaking his promise to deliver $1,400 relief payments to millions of Americans suffering amid the coronavirus pandemic, but he has indicated that he is willing to send the aid to a smaller group of people than he originally indicated in his $1.9 trillion Covid relief package.

Responding to concerns from lawmakers on both sides of the aisle, Democratic policymakers are now discussing narrowing the income groups that would receive the relief payments, The Washington Post’s Heather Long and Jeff Stein reported Thursday.

Under the new plan, which Long and Stein note is tentative and subject to change, individuals earning up to $50,000 and heads of household earning up to $100,000 per year would receive the full $1,400 payment. In Biden’s original formulation, the limits were set at $75,000 and $150,000, respectively. Under both proposals, payments would drop off above those levels.

The new plan would result in 71% of Americans receiving the full payment, according to Kyle Pomerleau of the American Enterprise Institute, with another 17% receiving a partial payment. Under Biden’s original proposal, 85% of Americans would receive the full payment.

Children would receive $1,400 under the new proposal, so a family of four that meets the income requirement would receive $5,600.

In terms of federal spending, the new plan would cost about $420 billion, according to calculations by Marc Goldwein of the Committee for a Responsible Federal Budget. Biden’s plan by comparison would cost about $465 billion.

Quote of the Day

“It is nonsense and everybody should ignore it. It is boring and it is the worst part of the United States Senate, but it is a very important means to an end.”

Democratic Senator Brian Schatz of Hawaii, describing the “vote-a-rama” that kicked off Thursday in the upper chamber, part of the process that will allow Democrats to pass a budget resolution and then try to enact President Biden’s $1.9 trillion fiscal rescue plan with just 51 votes, eliminating the need to win support from Republicans.

During the vote-a-rama, which could stretch into Friday, senators can offer amendments to the bill, most of which stand no chance of being adopted. “While leaders and many senators tend to dislike the vote-a-rama,” Bloomberg Steven Dennis wrote, “it’s a rare opportunity for backbenchers and potential future presidential candidates to put the Senate on record on a pet issue or try to show off for their political bases.”

Number of the Day: 7.4 Years

At the current rates of deployment, it will take 7.4 years to vaccinate 75% of the world’s population for Covid-19, the threshold for returning to something like normal life. That’s according to a calculator built by Bloomberg News, which claims it has “the biggest database of Covid-19 shots given around the world, with more than 108 million doses administered worldwide.”

The variation between countries, however, is enormous. Israel, the world’s leader, is expected to hit 75% vaccination in two months, while in the U.S., it will take 11 months. On the other end of the spectrum, most countries haven’t even begun their vaccination efforts yet.

“The pace is likely to accelerate further as more vaccines become available,” Bloomberg’s Tom Randall wrote Thursday. “Some of the world’s biggest vaccine-manufacturing hubs in India and Mexico are only just getting started. More than 8.5 billion doses of vaccine have been contracted by countries through more than 100 agreements tracked by Bloomberg.”

Chart of the Day: Government Shrinking and Growing

Most federal agencies shrank during the Trump administration, but the total civilian workforce at the federal level is about 4% larger today than it was when former President Trump first took office, thanks to significant growth in a handful of areas, led by Veterans Affairs and Homeland Security.

Although Trump was unable to shrink the government as much as he may have wanted to, his efforts to reduce what he derided as the “deep state” had real effects, The New York Times reported this week, further damaging a federal apparatus that has been neglected for decades.

“Our government has suffered literally decades of rust,” Max Stier, president of the Partnership for Public Service, told the Times. The effects of that neglect are visible today, Stier said, and include an unemployment system that has trouble distributing funds quickly and equitably, and a public health system that is struggling to coordinate the production and delivery of supplies during a global pandemic.

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