This country is about to embark on a grand, real-time social experiment in cutting childhood poverty. It is an outgrowth, oddly enough, of the worst pandemic in modern times, and originated in a Republican idea now decades old.
President Joe Biden's proposal for an expanded child tax credit traces back to right here in Minnesota, where, in the mid-1990s, the late GOP U.S. Rep. (later Sen.) Rod Grams proposed a $500-per-child tax credit, aimed squarely at working- and middle-class families. It gained broad bipartisan support. The credit was signed into law by Democratic President Bill Clinton and was doubled as part of a tax cut proposal from GOP President George W. Bush. It was doubled again as part of the tax package signed into law by President Donald Trump in 2017.
Now Biden's American Relief Plan would take the credit to $3,000 per child for the next year, but with an interesting addition: monthly checks deposited directly into the accounts of qualifying families. The checks are expected to average about $300 per child and start as early as mid-July.
Raising the amount, but more importantly turning it into a regular stream of income, is, in the words of congressional expert Norm Ornstein, "a hugely significant game-changer." It is expected, he said, to cut child poverty by half. An astonishing 88% of families with children under 18 will qualify, including 1 million children in Minnesota alone.
"We will learn something from this," Ornstein said. A year is not enough time to determine long-range effects, he said, but it will be possible to see whether regular, monthly infusions help average families weather life's storms better, or just afford more of its necessities. A survey earlier this year showed that fewer than 40% of Americans held emergency funds of $1,000.
"There have been countless studies on how best to deal with poverty," Ornstein said. "You can create huge bureaucracies, and elaborate requirements, or you can just give them the money they need. In general, when that has been done, it has helped them thrive. If this gets extended, I think it cuts poverty far more widely and effectively than the whole [President Lyndon] Johnson-era poverty program."
Adding a child care component, Ornstein said, would create a level of stability that has eluded many families while affording them a measure of autonomy and dignity that can be hard to come by with other government programs. That it reaches such a broad swath of the country removes the stigma that typically accompanies anti-poverty efforts.
The initial expansion of the credit will cost about $110 billion. Extending it the full four years, as Biden wants, would cost significantly more. It would in some respects create, for most American families, a type of universal basic income once supported by another Republican — President Richard Nixon.
We cite the history of these proposals to show that they have long been bipartisan in nature. Biden's framing of the credits as monthly tax cuts is smart branding. And the plan's noble purpose confirms that sometimes America finds a sweet spot where good policy can be good politics for both sides.