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Keep the Child Credit Tied to Work
The Biden administration is trying to launder widespread support for emergency COVID relief into irreversible changes to the nation’s economic policy. Upon signing the $1.9 trillion American Rescue Plan (ARP) in March, President Biden explained that “everything in this package is designed to relieve the suffering and to meet the most urgent needs of the nation.” But within a week, he was celebrating that “this is the first time we’ve been able to, since the Johnson administration and maybe even before that, to begin to change the paradigm.” Fortunately, the American people are smarter than that, as their attitudes toward the expanded Child Tax Credit make clear.
Riding the wave of bipartisan enthusiasm for direct checks in response to the pandemic’s economic shutdowns, the ARP implements a one-year expansion of the Child Tax Credit: nearly doubling its value, offering payments monthly instead of at year’s end, and, most importantly, making all families eligible regardless of whether anyone in the household works. (Previously, as the term “tax credit” implies, the credit was paid only to families with taxable income, as a credit against taxes paid.) Just a few months into the “temporary” program’s implementation, Democrats are proposing to include a multi-year extension in their budget package, with proponents daring anyone to rescind their newly created entitlement.
Voters are nonplussed. Separate polls in July by Morning Consult and YouGov both found support for the one-year program but opposition to making it permanent. Now, American Compass has released the results of a more in-depth survey that shows both how little COVID has shifted the nation’s permanent attitudes and how badly the idea of unconditional, unending cash subverts American principles of reciprocity and self-sufficiency.
Our survey of 2,000 registered voters found top-line results similar to the other polls: 56% support at least the one-year expansion while 26% oppose even that; 36% favor a permanent expansion while 46% prefer only a temporary expansion or oppose it altogether. Democrats and Republicans had predictably partisan views, while Independents opposed the permanent expansion by 27% to 55%.
For those supporting permanent expansion, we asked whether they preferred it for “all families, regardless of whether they work to earn money” or “only for families that have at least one working adult.” After offering those options, only 28% of voters were left supporting permanent, unconditional cash. Among Democrats, support fell below half. White, college-educated Democrats were the only group where even 51% were in favor.
This helps make sense of the concerted effort to obscure the true nature of the policy. President Biden has infuriated progressives by avoiding any mention that families without earned income are eligible, while his administration struggles to get those families enrolled. The White House webpage dedicated to the program uses the term “working families” five times in the first three paragraphs. Four friendly infographics highlight what families with different income levels can receive, but the lowest-income example features two working adults with household income already above the poverty line. Even on “Child Tax Credit Awareness Day,” the president began his statement by calling his policy “a significant tax cut to America’s working families.”
Biden proudly touts that sending out checks will “cut child poverty in half,” but this argument is unpopular when Americans understand the premise. Our survey explained that the poverty-reduction claim came from counting the new government benefit as income and asked respondents their reaction. More than half rejected the Biden talking point and instead sided with the view that “reducing poverty means getting families to the point where they can support themselves.” Only one-third agreed that “if sending money to families raises their total income above the poverty line, the government is doing a good job reducing child poverty.” Working-class voters were least likely to accept the handout model of poverty reduction, and even among Democrats only 53% were supportive. Independents were nearly as committed to self-sufficiency as Republicans.
Voters aren’t being stingy; they just want to see a connection to work. Our survey found that increasing the credit’s size was far more popular than extending it to all families regardless of work status. We also asked how benefit eligibility should be calculated, offering three options: the current expansion’s unconditional formulation; the pre-expansion system in which the credit value cannot exceed the value of taxes owed; or an income-match formula that caps the credit value at a household’s total earnings the prior year, similar to Senator Josh Hawley’s Parent Tax Credit proposal.
No option garnered a majority. The unconditional option received 40% support, but 60% of Americans preferred some requirement that the family earn income itself: either the income-match (32%) or the status quo ante (28%). This places the median voter squarely in the camp supporting an expanded credit capped at household income. That option was the most popular one with working-class voters and Independents. Even among Republicans, the status quo option earned only 47% support, meaning that most preferred something more generous and the median Republican preferred the income-match.
In the upcoming budget debates, Democrats will argue that extending the Child Tax Credit expansion merely means continuing a popular program. They are wrong and must be called on it. But Republicans will find themselves on even weaker ground if they propose nothing in response but the old system, which provides a credit only against taxes paid and thus offers little for hard-working households with low tax liability.
What America needs, and what American voters want, is more creative policymaking that better supports families—including those who don’t earn enough to pay much in taxes—but always with the expectation that families receiving public support are also working to support themselves.
Co-authored with American Compass research director Wells King.Return to the Commons
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