Why Democrats should run on a universal child allowance
Democrats are in an ambitious mood. Most of the party’s leading lights rallied around Sen. Bernie Sanders’s vision of single-payer healthcare last week. To carry on the party’s venture into bold imaginative plans to provide direct help to American families, Democrats should run on a universal child allowance in 2018 and 2020.
Here’s how it would work: under a universal child allowance, the government would send every American family a check each month to help with the cost of raising kids. Proponents of a child allowance recommend monthly payments of at least $200 to $300 per child. That could pull up to 42 percent of the 15 million impoverished children in the U.S. out of poverty altogether.
Most other advanced countries already provide this kind of cash benefit to families. In Canada, for instance, families receive about $350 per month per child, and more for children under six years old (though these benefits phase out for the upper-middle class).
But the U.S. is behind the times on this issue. We already recognize the role for government to top off families’ incomes, subsidizing families with children through the Child Tax Credit and the dependent tax exemption. But by baking these subsidies into the tax code, little of the money reaches the families that need it most. And these benefits help families only once each year in a lump sum tax refund, rather than on a regular basis to meet the real-time needs of raising a family.
There are a lot of good reasons for Democrats to embrace a child allowance. Chief among them is that the program would relieve the inhumanity of one-fifth of all American children growing up in poverty. Things are so dire that many families resort to free “diaper banks” to get their baby supplies.
Rescuing kids from poverty would reverberate across the broader American economy. The human toll of child poverty costs our economy upwards of $670 billion each year in squandered potential and lost growth. A recent study by the left-leaning Roosevelt Institute found that a child allowance would grow our economy, increase workers’ pay, and create jobs.
By running on a child allowance, Democrats would draw a sharp contrast with their Republican opponents. Going into 2018 or 2020, the GOP will have burned most of its political capital trying to take benefits from the poor and middle-class in order to cut taxes on the rich, both in the failed Obamacare repeal effort and the coming tax reform battle. With a child allowance, progressives would make the opposite promise: providing a clear new benefit to help families cope with modern financial pressures, funded disproportionately by tax hikes on the wealthy.
A child allowance holds appeal for Democrats across the party’s ideological spectrum. For those like Sen. Bernie Sanders and Rep. Keith Ellison on the left, a child allowance would draw on social democratic reforms abroad to build a more equal income distribution at home. Tech-minded progressives like Rep. Ro Khanna of Silicon Valley have expressed interest in a child allowance as a way to curb oncoming financial pressure from automation and technological change. A child allowance ought to also appeal to establishment Democrats like Sen. Cory Booker, who has long committed to combating child poverty and closing the academic achievement gap between rich and poor students. A child allowance would do both — expanding opportunity by narrowing that gap, since children perform better in school when their family income increases.
Democrats have already been moving in this direction. During her 2016 presidential campaign, Hillary Clinton proposed significant expansions to the Child Tax Credit. Democratic Rep. Rosa DeLauro has also proposed to add on a refundable tax credit for young children. The Center for American Progress — the Democratic Party’s go-to policy shop — has proposed creating a sort of quasi-child allowance for young children by giving families the option to receive monthly $125 advance tax credits — wonk-speak for direct payments from the government. And that’s not to mention the party’s long tradition of protecting American children — from LBJ’s Great Society anti-poverty programs and idea for Medicare-for-Kids, to George McGovern’s child allowance proposal, to Ted Kennedy’s Children’s Health Insurance Program, on through Obamacare’s Medicaid expansion.
Meanwhile, a team of researchers is readying a child allowance pilot experiment in multiple cities across the United States. This could provide policymakers with live data on the impact the program would have nationally.
A child allowance won’t bankrupt us, either. We could fund a $250 per month child allowance by raising just $69 billion in new revenue each year, in addition to the $96 billion currently spent on child-related tax benefits. To put that in perspective, President Trump’s proposed tax cuts would cost $780 billion each year, disproportionately benefiting the wealthy.
For decades now, too many Americans have found themselves caught in a semi-permanent recession, with financial pressures piling up even as their own economic fortunes slowed to a stand still. These voters took a chance on Trump because he promised them relief from the economic forces bearing down on them — things like trade, tech-driven obsolescence, and immigration.
As Trump betrays his core promise to resuscitate these voters’ economic wellbeing, Democrats must stand ready with real solutions for an economy that isn’t working for them. A child allowance would provide immediate tangible relief to millions of American families being squeezed by rising costs and low pay. Democrats should take that idea and run with it in 2018 and beyond.