The current debate on child benefits, galvanized by Senator Mitt Romney’s Family Security Act, has given conservatives the opportunity to change their approach to pro-family policy—away from old-style reformist tax credits and toward direct payments, away from remedial welfarist approaches and toward affirming the American family.
While much energy has been expended on Senator Romney’s proposal, it is time for conservatives to look beyond discrete proposals and to approach family policy as an orienting goal that can enable other political goals and as an investment in the nation’s long-term prosperity. Long-run economic growth is wholly determined by growth in the labor force as well as technologically induced productivity growth.
As a first step, conservatives should set a clearly defined goal for national spending on family support: one dollar in twenty, or 5% of GDP. Since federal programs tend to expand over time, providing a goal for spending will be essential for prioritizing and consolidating established programs. But it may also prove essential for policymaking, setting both a target benchmark and purpose around which to reorient and expand existing spending and to craft new programs.
In my 2019 proposal with Maria Molla under the name FamilyPay, we proposed a generous direct family benefit of approximately $500 per child per month across the board. We suggested that, as family size increases, more of the benefit be provided as “CarePoints”—a card tied to family- and home-related expenses.
Once a form of direct family payments is in place, the One Dollar in Twenty Plan could add the following programs:
- The Baby Loan. Married couples expecting their first child should be entitled to a $20,000 interest-free loan from the U.S. Treasury on goods and services tied to child-rearing and homemaking. A couple expecting their second and third children should be eligible for additional $10,000 loans. After the birth of the third child, the entirety of the loans should be written off.
- The American Dream Bank. Married couples with two minor children who are buying new or existing homes, and meet credit requirements, should be eligible for an interest-free loan up to a maximum amount of 40% of the conforming loan limit. The loans should be administered by a national family investment bank backed by the Federal Reserve. Such a program would help iron out the intergenerational inequalities in the housing market that currently prevent young people from forming families.
- A Fuller “FamilyPay.” In order to make robust family life a reality for more families, parents should receive double the amount of the Family Security Act’s benefit, but one half of the benefit should be an unconditional cash payment while the other half should be restricted to eligible home, family and educational expenses via a “CarePoints” system. By tying CarePoints expenditures to domestically manufactured products, the program will help to reorient American manufacturing around the family home. Products for which no domestic manufacturing exists could be imported or subsidized.
A version of the One Dollar in Twenty Plan is already being implemented in Hungary, which aims to spend one dollar in twenty on family support—and includes forgivable loans for expecting parents, home purchase assistance, and direct family payments. If the one-in-twenty amount seems out of reach in the United States, it shouldn’t. Per-capita GDP in the United States is four times that of Hungary.
If any government can support the family in a robust manner, it is ours.
[Note: This post is from the policy forum 7 Proposals to Make America More Family-Friendly.]