Sen. Romney's (R-UT) Family Security Act 2.0 offers chance to talk about bipartisan policies to reduce child poverty
RESULTS volunteers have, for years, been advocating for improvements and expansions of the Child Tax Credit (CTC). This included successful expansions in 2009 during the Great Recession, in 2015 we helped make the 2009 expansion permanent, and during the American Rescue Plan (ARPA) negotiations we helped make the CTC fully refundable – so it reached children in the lowest-income families – for the first time in history. For the past 1.5 years, RESULTS volunteers urged Congress to continue those historic changes through the budget reconciliation process.
On the heels of all the wonderful advocacy done by RESULTS volunteers, Senator Mitt Romney (R-UT) just released a revised version of his Family Security Act from 2021 called The Family Security Act 2.0 (FSA). Considering that, we thought it would be helpful to provide some context to the FSA proposal that outlines both its strengths, and areas which need improvement/cause concern (this is where your advocacy comes in!).
FSA and its Strengths: The FSA includes one of the most successful parts of the 2021 CTC, monthly payments. Monthly payments allowed families to have more stability in their family budgets and pay for monthly expenses like rent, food, utilities, and childcare, all while consistently lowering monthly child poverty rates. Encouragingly, the FSA also provides a larger benefit than the one included in ARPA, providing $4,200/year for children 5 and under and $3,500 for children 6-17 (by comparison the ARPA CTC was $3,600 and $3,000 for same age groups). As an anti-poverty organization, RESULTS is particularly focused on larger monthly payments reaching the lowest-income families.
Finally, the FSA includes a $700/month benefit for families during the last 4 months of pregnancy. This benefit would be extremely helpful as pregnancy often requires mothers to work less, or not at all. When they are unable to decrease work hours as needed, they put themselves and their pregnancy at substantial health risks. This is especially true for Black women who die during birth at 3 to 4 times the rate as white women.
RESULTS commends Senators Romney, Daines (R-MT), and Burr (R-NC) for moving forward the conversation about policies that can reduce child poverty.
RESULTS Concerns: While the monthly payments and larger benefit amounts for lower-income families are improvements over the 2021 CTC, RESULTS continues to advocate against income requirements that would limit the ability of families with limited or no income to get the CTC. The FSA requires families reach a certain income threshold in order to be eligible for the benefit. While RESULTS has always advocated for full refundability, as it was responsible for 88 percent of the CTC’s poverty reduction, it is important to note that the income requirements of the FSA are far superior to current law.
Under current law a family making below $2,500 is completely shut out of benefits. Also, a family would need to reach about $24,000 in income to receive the full value (the credit phases in at a very slow $0.15/dollar earned above $2,500). Under the FSA proposal, families would be eligible for benefits at the first dollar earned and would reach the full benefit at $10,000 earned. It is particularly problematic that larger monthly payments would go to families much higher up the income scale while still leaving out many of the lowest-income families.
Despite being an improvement over the current CTC, the FSA’s income requirements remains one of RESULTS primary concerns with the FSA. It is likely that the income requirement will drastically reduce the FSA’s ability to reduce child poverty. The December 2021 CTC payment, for example, lifted 3.7 million children above the federal poverty line. Ensuring the full CTC reaches families with little or no incomes, in particular, plays a key role in reducing racial poverty gaps. Already Sen. Romney’s proposal is being modeled by economists and policy experts, with the conservative Niskanen Center projecting that the FSA will reduce child poverty by 12.6 percent. This is a huge step back from the 2021 CTC, which cut child poverty almost in half. Additionally, because Social Security income is not considered income under the FSA, which means retired or disabled caregivers raising children would not be eligible. In fact, there are no exemptions from the income requirements in the FSA – despite broad acknowledgement that some caregivers may not be able to engage in paid work.
Finally, given the work done to administer monthly payments through the IRS, RESULTS is also concerned about moving administration to the SSA – which could impact access to other anti-poverty programs. And the FSA requires that at least one parent possesses an SSN – another step backwards from current law – and one that would make millions of U.S. citizen children ineligible for the monthly payments. RESULTS will continue to monitor discussions happening on the hill regarding our concerns with the FSA and will keep you up to date.
Problematic Payfors: In addition to the refundability/eligibility requirements, the FSA also raises concerns in terms of how it is paid for. The FSA drastically cuts the Earned Income Tax Credit (EITC) and eliminates the head-of-household deduction, both programs provide critical support for low-income families (the EITC remains unchanged for those without children). According to Chuck Marr, from the Center for Budget and Policy Priorities, these changes mean that, “a single mom who makes $25,000 as a cook & has a toddler & a daughter in the second grade…..(even with the Child Tax Credit increase) would [see her income] FALL by roughly $450, leaving her family worse off”.
Mitt Romney has stated that he wants to reform the EITC to get rid of what he calls a “marriage penalty”, which he says disincentivizes marriage. We believe there are ways to bring fairness to the tax code and encourage marriage, that do not come at the expense of single parents. Your advocacy will be critical in order to bring this perspective to your Members of Congress and the media.
Mitt Romney’s Family Security Act is far from perfect, but it does have some strong improvements over existing law. We are cautiously optimistic that this proposal can further a bipartisan conversation around the permanent expansion of the CTC. As this bill begins to be considered by policymakers, your advocacy will be critical to make the improvements needed to the final bill. We urge you to share information about the new proposal – including RESULTS concerns about those left behind in the FSA and the cuts to EITC, etc. – with policymakers (especially Republican offices) in your lobby meetings and follow up. With your advocacy, we can make our tax code stronger and more equitable to ensure it has the greatest impact in reducing poverty.
As always, you can count on RESULTS to provide up-to-date information on the discussion and inform you of how your advocacy can make the biggest difference on poverty in our country and world.
Thanks for all you do!
For more on Senator Romney’s proposal, along with a 4 minute review of CTC developments on Capitol Hill and RESULTS long-term CTC campaign goals, see the recording of RESULTS Policy Update and Office Hours from June 22, 2022.