Go big on family
President-elect Joe Biden has said he wants to unify the country. From a policy perspective, that means working with Republicans on issues with strong interest from elements of both parties. Expanding the child tax credit and creating a paid family leave program are two opportunities he should pursue.
The child tax credit, which reduces a parent’s income taxes by as much as $2,000 per child under age 17, offers something for both Democrats and Republicans. Up to $1,400 per child is refundable, which means that parents can get some money for each qualifying child even if they have no net income tax liability. Republicans like it because it helps to defray the cost of raising children, making larger families somewhat more affordable. Democrats like it because it helps reduce child poverty and supplements other programs such as the earned-income tax credit, which helps reduce overall poverty. As a result, the Wall Street Journal reports, there is already discussion underway for a potential bipartisan deal to increase the child tax credit amount and the portion that is refundable to taxpayers.
A broader bipartisan coalition could include instituting a program for paid family leave. Republicans such as Sens. Marco Rubio of Florida and Joni Ernst of Iowa have already introduced bills to create a program that would give parents the ability to take paid time off to care for newborns or sick family members.
Combining these measures into one large bill would be good for American families of all stripes. U.S. fertility rates have been declining for years and are now below the level needed to keep population stable. This means unless we significantly increase immigration, the country’s population will decline in the future, endangering economic growth and the fiscal stability of our entitlement programs that rely on payroll taxes for their funding. Increasing government support for child rearing will help to offset any negative economic factors that keep families from having as many children as they want.
Increased financial support will also improve the quality of family life for most Americans. Paid family leave, for example, will allow mothers and fathers from all financial backgrounds to take time off to bond with newborn children, something many parents from upper income families already do. A larger child tax credit and more refund-ability will also lessen the financial strain that families of all backgrounds feel from raising children, something that will reduce the stress that damages so many families.
It will take determined presidential leadership to break through entrenched partisan gridlock and cut a meaningful deal. But the overlap in partisan interest in these ideas suggests that such an effort could succeed if Biden makes it a priority. America’s families will cheer if he does.