Policy Experts Evaluate Biden and Romney Child Tax Credit and Allowance Plans

By Katrina Schmidt 

The Urban Institute recently hosted a discussion on the Child Tax Credit (CTC) and current proposals from President Joe Biden and Senator Mitt Romney to expand support for children and families in response to COVID-19, highlighting the pros and cons of both options.
Elaine Maag, principal research associate at the Urban-Brookings Tax Policy Center, Samuel Hammond, director of poverty and welfare policy at the Niskanen Center, and Myra Jones-Taylor, chief policy officer at Zero to Three, joined Urban Institute President Sarah Rosen Wartell for the virtual panel.
The group of policy experts analyzed Biden’s plan to expand the CTC, including making the credit fully refundable and allowing families to receive the credit in advance in monthly segments, comparing it to Romney’s proposal to create a universal monthly child allowance by replacing the CTC and consolidating other security net programs.
Jones-Taylor highlighted that both Republicans and Democrats putting forward proposals that would take major steps to address child poverty is a significant change in policymaking.
“Do we want to think about this as a tax credit that is based on income? Or is this a fundamental shift in the social contract that says that all of society benefits when children are doing well?” Jones-Taylor asked. “This is about making sure that everyone has a fair shot.”
Maag and Hammond noted that a strength of both proposals is that they take a month-to-month or quarterly approach, rather than an annual benefit, an advantage that addresses the financial realities many Americans face.
Biden’s proposal would help the CTC reach more families and also provide more direct support with full refundability, Hammond said, particularly through the monthly advance payment.
However, Jones-Taylor pointed out that the Romney approach pays for the allowance by consolidating other safety net programs, which could limit the allowance’s ability to address poverty, and Maag said that the proposal would not be accessible to children without social security numbers.
Policymakers’ views on how to best address poverty and whether or not there is a need to tie public benefits to work have shifted in recent years and are part of the reason these proposals have come forward now, Hammond and Jones-Taylor said.
“We need to trust that families know how to best spend their money,” Jones-Taylor said.  
Watch a recording of the event here.