Making the Conservative Case for the CTC


September 1, 2022
by David Plasterer, Senior Policy Associate

In 2021, Congress enacted the American Rescue Plan Act (ARPA) which cut child poverty by more than a third by expanding the Child Tax Credit (CTC) to reach the lowest income families. ARPA also increased the benefit amount and created monthly payments. Those monthly CTC payments helped families put food on the table, pay the rent, and keep the lights on. 

Food insecurity and other material hardship dropped after the CTC payments started (see data from the Census Bureau, Columbia University, and Journal of the American Medical Association. Children’s Health Watch notes that the CTC payments reduced hunger and improved health in families who received them. ARPA showed that investing a modest amount in children and families ($250-$300 per child each month) makes a huge difference. Families caught a break and even thrived. Not only could they pay the bills, they ate healthier, invested in education, and avoided predatory payday loans. 

Unfortunately, the expanded CTC was only temporary and ended in January 2022. A majority of senators opposed a broader set of investments in the reconciliation bill, now known as the Inflation Reduction Act (IRA). Because the IRA passed without an expansion of the CTC, a bipartisan end of year tax and spending package is our best chance to expand the CTC in 2022. The bill will need 60 votes in the Senate to become law, which means it will need broad bipartisan support. While that may seem like a daunting task, the CTC was created by and has been expanded multiple times with bipartisan support, and with our advocacy it can happen again. That is why, when we are talking to different policymakers, including more moderate and conservative members, it is vital that we use arguments that resonate with them. 

This messaging will vary depending on the audience – and what resonates with you, the advocate. Many RESULTS volunteers have been talking about tax policies that can reduce poverty with policymakers for months, if not years, and we urge you to incorporate what you’ve seen be effective in your past interactions. For many, this includes strategies centered around bipartisanship, strengthening families, parental freedom, economic growth, child development, self-sufficiency, and “dignity of work”.  

Finally, it is important to use data from sources that are credible to conservative members. That is why throughout this blog post we have tried to use as many conservative and nonpartisan sources as possible to make the case for expanding the CTC. Even the title of this blog is borrowed from a report from the nonpartisan Niskanen Center, which works closely with many conservative members of Congress, titled “The Conservative Case for a Child Allowance”. If you have the time, it can be very helpful to read conservative arguments straight from their source.

Before we dive into the conservative case for expanding the CTC, I want to thank you for all you do. Without your amazing advocacy and detailed lobby reports, we would not be able to produce tools like this blog that will (hopefully) help you as you meet with moderate and conservative members of Congress. We appreciate you and the time it takes to complete lobby reports. We do read them, and they help us to plan our legislative strategy and provide tailored messaging for you to use with your policymakers. So, again, thank you for all you do.

Bipartisanship 

The CTC has a long history of bipartisan support since it was first enacted in 1997. Many moderate lawmakers take pride in being a “bipartisan dealmaker” and are unlikely to vote for partisan legislation (especially when it isn’t from their own party). We need to convince these “bipartisan dealmakers” that expanding the CTC should be a priority – whether it is in the short term through an end of year tax plan, or in the long-term when a new and potentially divided Congress takes office in 2023. You can share that there is growing bipartisan support for expanding the CTC, as evidenced by Senators Romney (R-UT), Burr (R-NC), and Daines (R-MT) releasing the Family Security Act and Representative Pete Meijer (R-MI) leading a Dear Colleague letter supporting an expanded CTC in the House. 

In 2017, as part of the Tax Cuts and Jobs Act (TCJA), many Republicans voted for a Sen. Marco Rubio (R-FL) led amendment that increased the child tax credit amount from $1,000 to $2,000. The TCJA also set certain corporate tax breaks to expire in 5 years and now corporations are asking for them to be extended. Share that it would be a great bipartisan compromise to pair these two policies together again this year in a year end tax extender bill. The conservative National Review published this article showing how corporate tax breaks and CTC expansions have been passed together many times over the last 35 years and that it would be wonderful to see that happen again.

Ask policymakers how they can move bipartisan policies like the CTC forward with colleagues. Ask them to take a leadership role in pushing tax policies that reduce child poverty with their own Congressional leadership, with peers from their own party, and by reaching across the aisle. Ask them what their concerns are with existing proposals and what they are doing to improve them and move forward. Urge them to engage with colleagues to improve existing proposals by focusing on children in the families with the lowest incomes. If they say no, ask what they think Congress should do to strengthen families and reduce hardships for children. 

Strengthening Families & Supporting Healthy Child Development

Republicans and moderate Democrats have, for decades, carried the mantle of being “pro-family”; the CTC expansion provides the perfect opportunity for them to show their commitment to American families. Patrick Brown, a researcher at the conservative think tank Ethics and Public Policy Center, recently wrote that conservatives’ “pro-family rhetoric will need to be backed up with policy proposals that match”. The CTC provides that exact opportunity.

One of the most important ways that the expanded CTC strengthens families and increases family stability is through providing monthly payments. Having a steady supplement to their monthly income helped families avoid high-interest payday loans for financial help and helped keep them stably housed. The CTC has been helpful in preventing families from getting evicted or experiencing homelessness. When children remain stably housed, they are less likely to have developmental delays and behavioral challenges.  

Another effective tool we have in making the case for broad bipartisan support for the CTC is sharing details on how children develop in safer and more self-sufficient homes. Conservative policy analyst Robert Orr noted that monthly CTC payments increase educational attainment, lead to higher wages when children grow up, improve maternal health, reduce child maltreatment, and increase economic self-sufficiency among women.

Parental Freedom/Choice

Conservatives and moderates, like most Americans, value the freedom to raise their children in a manner consistent with their values and to make their own choices on how to spend family income. Because the CTC is a direct cash payment, it improves a family’s ability to do both of those things. Families receive CTC benefits monthly and can choose how to use it based on what is best for their family. Most families used their CTC payments on monthly expenses like food, essential bills, and rent. Families pay their bills monthly; they should receive support monthly as well.   

Libertarian political philosopher Matt Zwolinski noted in his argument for a Universal Basic Income that “providing people with money gives them options, and thus the ability to live their lives in accordance with their own will…”. For some families, “living in accordance with their own will” means having the choice to have one parent stay home to care for their children, which is a hallmark of traditional conservative family values. The flexibility of monthly CTC payments can make that option possible.

Programs that provide direct cash assistance also benefit from low administrative costs in comparison to other anti-poverty programs. As Blake Turpin, a Bill Emerson National Hunger Fellow who served with RESULTS, says, “These programs were effective because they were relatively simple in terms of delivering the benefit – they put cash directly into people’s pockets through the tax code.” 

Economic Growth – Especially in conservative districts

Direct payments to families, especially lower income families, are typically spent immediately in the local economy. In fact, 73 percent of families with the least amount of cash on hand spent their CTC in the first week. The CTC has an 8 to 1 return on investment, boosts consumer spending, and generates billions in revenue from state and local sales tax. It also helped roughly 300,000 low-income families start small businesses which lead to long-term economic mobility for families. And because the CTC was often used to pay rent, it can help stabilize local housing markets. Additionally, rural areas, typically represented by conservative members, benefit disproportionately from the fully expanded CTC. This is because families in conservative districts have, on average, lower incomes and larger families. Unfortunately, 32 percent of children (over 3 million total) living in rural areas are left out of the full CTC under current law.

On Inflation

When talking about how the CTC can boost your local economy, you may hear your member say that cash payments like the CTC increase inflation. Inflation is a major issue across the globe right now and is making it harder for families to afford basic necessities. The CTC is one of the best tools we have to help families with rising prices. In fact, 84 percent of families making under $30,000 per year said that CTC payments were somewhat or very important in meeting day-to-day expenses. Additionally, 54 percent of the inflation we currently see is due to historically high corporate profits, not because of the CTC.

Dignity of Work

We know many policymakers are focused on an earnings or work requirement to get the CTC. You may hear about a University of Chicago study that showed the CTC reduced employment, especially among single mothers. This study suffers from credibility issues that are explained in detail by the Niskanen Center. Additionally, real-world evidence of the labor force effects of the CTC debunks the projections contained in the study entirely. For instance, according to the nonpartisan Tax Policy Center and the very respected and nonpartisan National Bureau of Economic Research, there was no difference in employment outcomes for families receiving the expanded CTC in comparison to families not receiving the CTC. 

You could also share that, according to a study by the Social Policy Institute written as a rebuttal to the University of Chicago study, 1.4 million CTC households have left their jobs since the payments stopped, primarily because they can no longer afford to go to work. Now, as inflation has increased, families are facing even greater obstacles to making ends meet. The CTC broke down barriers to work. We urge you to share why you think investing in dramatic reductions in child poverty should be the goal, and that you are focused on reducing hardship for children regardless of their parents’ work history.

Supporting our Troops

We believe that all of our elected officials support our troops, even when they disagree about foreign policy or military funding levels. While supporting our troops is a universal value, conservatives tend to focus on this value the most and can be moved to action when veterans welfare is at stake. It could be helpful to share that under current law there are 670,000 children in veteran families who are not eligible for the full CTC due to income requirements. It does not reflect the values of our nation to allow veterans who served our country to raise kids in poverty.

For further consideration, watch the recording of our September 2022 Policy Forum.


Photo by Olga DeLawrence on Unsplash

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