Press Release Health and Social Programs Inequality Poverty United States

Watered Down Child Benefit Proposal Imposes Earnings Test, Excludes Millions of Children

July 07, 2022

Contact: KL Conner, 202-281-4159Mail_Outline

Washington — Utah Senator Mitt Romney’s new child allowance proposal, the Family Security Act 2.0 (FSA2), is characterized as an expansion of the current Child Tax Credit. In a new analysis, CEPR Senior Policy Fellow Shawn Fremstad finds the revised proposal a retreat from Romney’s earlier commitment to disconnect work and childbearing in the same policy.

Instead of expanding support for families with low incomes, the Family Security Act 2.0 proposal adds a $10,000 minimum earnings test. The analysis details how this creates winners and losers compared to current law. 

The earnings test classifies millions of children as undeserving or less deserving because their parents do not earn enough. Furthermore, the proposal continues a discriminatory trend in federal tax law that favors married couples with a dependent, nonemployed adult (typically a dependent wife) over married, dual-earner families and single-parent, single-earner families. 

“Romney’s retreat is a reminder that Congressional conservatives remain steadfast in their opposition to a normal child allowance that treats low-income children, single parents, student parents, relative caregivers, and apparently even fetuses fairly,” said Fremstad.

No matter what Congress passes, if anything, Fremstad sees the need for a coordinated push to establish inclusive child allowances in states that already have refundable state earned income tax credits.

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