Would a child allowance help low-income children?

Over the past month, US family policy has captivated the attention of policymakers across the ideological spectrum. At the forefront of the family policy conversation: a universal child allowance. In early February 2021, Senator Mitt Romney proposed a sweeping plan to combine several tax credits and the major US cash welfare program into a universal child allowance, paid in cash to families on a monthly basis. Democrats responded with a plan of their own that would introduce a slightly smaller child allowance, but keep other federal benefits intact. How would a universal child allowance affect child poverty in the US? Does this policy hold fast to the conservative tradition of pursuing “temporary, targeted, and timely” federal supports? 

Joining Naomi and Ian in this episode is AEI Rowe Scholar in poverty studies Angela Rachidi. She discusses the history of poverty alleviation programs in the US, the potential unintended consequences of a child allowance, and the policy agenda of a new “pro-natalist” movement on the right focused on removing barriers that prevent Americans from having the number of children they desire. Later, Ian, Naomi, and Angela explore means-tested “baby bonds” as a potential alternative to the child allowance. 

Show Notes:

03:50 | Child allowance proposals on the Left and Right

04:40 | Key differences between Romney proposal and Democrat’s policy

06:45 | A return to pre-1996 welfare

10:30 | Why send cash to high income families?

14:05 | Pro-natalist case for a child allowance

16:30 | Ideal fertility vs. actual fertility rates; what are the tradeoffs?

19:05 | What about means-tested “baby bonds?” 

22:20 | Will a child allowance proposal become law in the near future?

Resources :

Fix family poverty with free markets, for once | Naomi Schaefer Riley and Angela Rachidi | Reason

How would a child allowance affect employment? | Angela Rachidi | AEIdeas

Romney’s child allowance proposal would eliminate decades of anti-poverty progress | Angela Rachidi | RealClearPolicy