The government wants to pay people for having kids. Is this a good idea?

Elise Solé
·9 min read
Should people get paid for having children? (Getty Images)
Should people get paid for having children? (Getty Images)

Raising children is priceless, but it's sure not cheap. That's why "America's Rescue Plan," a $1.9 trillion stimulus bill backed by President Biden and approved by Congress on Wednesday, will mitigate some costs by refunding parents in monthly payments.

Here's the payout for parents: Funded by the Internal Revenue Service, the government will increase the Child Tax Credit (which, every tax season, gives parents $2,000 per kid under the age of 17 and for kids between the ages of 17 and 24, a credit of up to $500 each) to $3,000 per child ($3,600 for a child under age 6) and include 17-year-olds as qualifying children. The Child Tax Credit would also be completely refundable. Right now, if the credit amounts to more than taxes owed, parents are reimbursed only $1,400 of that $2,000. According to the Washington Post, which obtained the 22-page proposal, the benefits would end for singles earning more than $75,000 and couples earning more than $150,000. Payments would be sent monthly, beginning in July (with the second half paid out during tax season).

Parents earning less than $125,000 per year would also be reimbursed 50 percent of their childcare costs for kids younger than 13. "And, all families making between $125,000 and $400,000 will receive a partial credit so they receive benefits at least as generous as those they can receive today," according to the White House plan.

Although Biden pitched the enhanced child tax credit for one year, the Washington Post reports that he is open to a permanent change.

The bill, which Biden is expected to sign on Friday, would relieve families — 52 percent of which believe the U.S. had done a poor job of supporting working parents before the pandemic, according to results of a recent Yahoo Life-YouGov poll (although that number fell to 48 percent once the pandemic began). In that vein, 37 percent believe the government has a significant responsibility to help working parents. And 63 percent support expanding the Child Tax Credit, with 21 percent opposing the measure (16 percent are unsure).

Besides breaks for parents, the proposal includes plans for national vaccination distribution, the reopening of schools and essential worker back hazard pay, with an overall goal of reducing childhood poverty. According to the Center for American Progress, 11 million American children (one in seven) live in poverty, with the U.S. "consistently ranked" as having one of the worst rates, particularly during the coronavirus pandemic. Columbia University's Center on Poverty and Social Policy has said that Biden's overall proposal would cut childhood poverty in half.

How does Biden's plan compare with that of others?

Biden isn't the only politician campaigning for parents — Utah Sen. Mitt Romney, New Jersey Sen. Cory Booker and the nonprofit organization Girls Who Code proposed similar payouts.

Romney's "The Family Security Act," funded by the Social Security Administration, would give parents monthly payments of $350 ($4,200 per year) for kids up to 5 years old and $250 ($3,000 per year) for kids ages 6 to 17. Under Romney's plan, wealthier folks could cash in, meaning, single-filer parents who earn less than $200,000 and joint-filing couples earning less than $400,000.

However, to pay for his plan, Romney would need to eliminate the Child and Dependent Care Credit (which, each tax season, compensates parents who file taxes jointly, a percentage of childcare costs based on their adjusted gross income) and kill federal anti-poverty programs. That includes the Temporary Assistance for Needy Families (TANF), which provides services like job training and childcare, and the SALT Deduction, which deducts local and state taxes from people's federal tax returns and the Head of Household status, which mostly serves single parents. As part of enacting his new act, Romney would also make changes to the food assistance program Supplemental Nutrition Assistance Plan (SNAP) and the Earned Income Tax Credit, which supply tax breaks to low- to moderate-income families.

Meanwhile, Booker, along with Rep. Ayanna Pressley, promoted the American Opportunity Accounts Act, aka "baby bonds" (which Booker introduced in 2019 during his unsuccessful presidential campaign). Under this plan, the government would open and fund a savings account with a 3 percent interest rate for individuals, depositing $1,000 at birth and additional amounts each year, depending on household income, until age 18. The money could be used for major purchases like education or homes, "the kind of investments that change life trajectories," read an announcement.

For example, the child of a family earning an annual income of less than $25,100 would receive $2,000 per month, giving them $46,215 by the age of 18; the child of a family earning $43,925 per year would receive $23,948 by age 18.

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And Girls Who Code endorsed the Marshall Plan for Moms, a campaign to pay mothers "for their unpaid, unseen labor and to pass policies addressing parental leave, affordable childcare, and pay equity," as described by a January letter in the New York Times signed by celebrities like Amy Schumer, Gabrielle Union and Charlize Theron. “Sound crazy? It’s not,” read the ad. “It’s time to put a dollar figure on our labor. Motherhood isn’t a favor and it’s not a luxury. It’s a job.” This month, the Marshall Plan for Moms was introduced to Congress by Rep. Grace Meng of New York, who explained in a press release that “Moms throughout America are screaming out for help."

"The problem is that we [always] think motherhood is a choice and because of that, we don't believe anyone should help," Girls Who Code founder Reshma Saujani tells Yahoo Life. "But what COVID exposed is that we didn't choose for schools to close — hybrid plans were created assuming that one parent would be home. No one thought about single moms, who run 70 percent of low-income families. When they lose jobs, the entire family suffers. None of this is a choice."

What do parents think?

“Cash will help struggling parents but government programs specifically geared toward helping people with basic needs like food and job training are essential,” Kristen from Massachusetts tells Yahoo Life. “A plan [like Romney’s] that decreases these programs in exchange for cash is not working toward change.” She adds: “However, using income as a qualifier without factoring the geographical differences in the cost of living puts some at a huge disadvantage — a family making $150,000 in California lives very differently than one in Florida."

Ann, of Burlington, Vt., favors Biden’s plan for preserving federal programs for low-income families. “However, I feel strongly that married couples earning more than $100,000 per year should not benefit from these programs,” she tells Yahoo Life. “If the programs are aimed at those at or below the poverty line, then don’t give money to those who don’t need it.”

"My family would qualify for full benefits under the Romney plan, and that is not true of the Biden plan, but I am lucky that we don't struggle," Christin from Seattle tells Yahoo Life. "The elimination of TANF, EITC and reduction to SNAP in the Romney plan is concerning, especially since they are proven measures that help to prevent child poverty and food insecurity."

Leigh from Barre, Vt., prefers Romney's plan over Biden's for its higher payouts. "And as a stay-at-home mom, I wouldn't benefit from Biden's childcare reimbursements," she tells Yahoo Life.

And many have opined about the Marshall Plan for Moms. "You have it wrong," someone tweeted. "Make it for caregivers of all kinds. What about the grandparents on Social Security who could use support? What about dads? Foster parents? I support full time pay for any stay home caregiver."

Someone else called the plan "a God-send for struggling single mothers" on Twitter. And in a CNN op-ed, Alyssa Milano called the Marshall Plan for Moms "an important first step," adding, "This pandemic has illustrated, once again, a core truth of our nation: the work of women is essential. It's time we were paid like it."

Is it realistic to pay people for having children?

Theoretically, yes, when compared with policies abroad. Swedish families receive an allowance of approximately $150 per month until age 16. In France, social security payments cover the cost of raising two or more children, regardless of employment, until age 21, depending on a family's income. And in Canada, families are paid $563.75 per month for each child under the age of 6 and $475.66 per month for each child ages 6 to 17.

So, what's stopping the U.S. from enacting similar plans? “The United States has historically valued individualism over collectivism,” Daniel Roccato, a clinical professor of finance at the University of San Diego, tells Yahoo Life. “Neither approach is right or wrong — but it’s how we’ve evolved, which served us well in regard to innovation and entrepreneurship. But not as much when it comes to the health and care of families.”

As the richest country in the world, the United States could offer more family assistance. It's the only nation (among 41) that doesn’t mandate family leave. And while the 1993 Family and Medical Leave Act (FMLA) promises employees up to 12 weeks of unpaid, job-protected leave each year and the protection of health benefits, it only applies to certain employees — those who have worked for at least one year and for companies that employ 50 or more people.

C. Nicole Mason, the president and CEO of the Institute for Women's Policy Research, tells Yahoo Life that America is overdue for change. “Truthfully, we haven’t had a serious conversation around families and moving people out of poverty since 1996, with the national welfare reform bill,” she said, referring to TANF. “However, we need to make sure we don’t eliminate life saving programs that benefit families.”

Mason suggests a meaningful examination of gender roles and expectations. “If we believe that every person who is a primary caregiver will have their basic needs met, we would create [appropriate] policies but that's not how we understand motherhood,” she says. “That's not how we enter the conversation. So our policy outcomes are a reflection of what we believe about mothers and which are deserving.”

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