As birthrates dip, some conservatives warm to the child tax credit

Tom Brenner/Reuters
Vice President Kamala Harris listens as President Joe Biden delivers remarks about the child tax credit relief payments that began this week. He spoke in the Eisenhower Executive Office Building's South Court Auditorium at the White House in Washington, July 15, 2021.

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Thanks to a child tax credit passed by Congress in March, more than 35 million families with children began receiving their first monthly child credit payments this week. The credit, worth up to $300 a month per child for all but the highest earners, expires next year, but President Joe Biden has vowed to extend it.

Republicans have also promoted plans for more financial aid for families, including a proposal from Republican Sen. Mitt Romney of Utah for a near-universal monthly child credit. Some conservatives support the bill, in part, as a way to address the nation’s declining birthrate.  

Why We Wrote This

A newly expanded child tax credit, while passed by Democrats, is an idea that also speaks to values held by many conservatives: supporting struggling families and countering a decline in birthrates.

Last year, the birthrate fell to a 41-year low in the U.S., one of several countries that recorded fewer births.

Senator Romney has said his plan could convince some women not to have an abortion and nudge other couples to have children despite the cost of doing so. “For a civilization to survive and thrive, it must maintain its population,” he told the Deseret News.

But while Oren Cass, executive director of American Compass, a conservative think tank, shares the worries over declining U.S. birthrates, he says the main goal for Congress should be to relieve the financial stress on existing families.

Rebecca Woitkowski, a mother of two in Bedford, New Hampshire, says she imagined having four children until she realized how much child care costs. Her kids, ages 7 and 3, were spaced apart for this reason. “Paying for infant and toddler care for two children was out of reach for us.” 

For Ms. Woitkowski, a nonprofit policy advocate, the extra money she’s getting from the child tax credit passed by Congress in March will help pay for summer camps.

That’s likely true for others as well. More than 35 million families with children began receiving their first monthly child credit payments this week. Democrats have hailed the program, part of a pandemic relief bill, as a landmark $100 billion effort to reduce child poverty. 

Why We Wrote This

A newly expanded child tax credit, while passed by Democrats, is an idea that also speaks to values held by many conservatives: supporting struggling families and countering a decline in birthrates.

As it stands, the credit, worth up to $300 a month per child for all but the highest earners, expires next year. President Joe Biden has vowed to extend it, and Senate Democrats included it in their $3.5 trillion budget proposal. As with other social spending plans, Democrats aren’t counting on votes from across the aisle, given the antipathy among Republicans toward welfare programs. 

But the child tax credit has a conservative lineage. Its original form – capped initially at $1,000 and later raised to $2,000 – was introduced by a Republican-run Congress in 1995 and passed in 1997 with the support of social and religious conservatives.

Now, some “pro-natal” conservatives have an additional reason to support child credits: cash transfers can help to promote family formation and child rearing at a time of falling birthrates. Other wealthy countries have tried this approach, with varying degrees of success, to reverse their own baby busts. 

These concerns, which predate the pandemic’s impact on birthrates, aren’t yet driving the mainstream conservative agenda. Some Republicans recoil at the idea that a government should play any role in personal decisions about childbearing. But families’ needs are coming into sharper focus as the debate over tax credits and child poverty raises questions about what it means to invest in parents and children as part of an effective pro-natal policy. 

“Parents bear costs that nonparents don’t and they’re advancing the next generation. That’s the way to think about it,” says Patrick Brown, a fellow at the Ethics and Public Policy Center, a conservative advocacy group. “The question is whether there’s a political constituency for this.” 

Baby bust sharpens focus on families

Democrats hope to extend the current child credit through the budget process, but Republicans have also promoted more financial aid for families. In February, Republican Sen. Mitt Romney of Utah proposed a near-universal monthly child credit. His bill won support from many conservative groups, including religious organizations and taxpayer groups, which applauded his plan for being deficit neutral. By not imposing work requirements or other conditions on eligible parents, the proposal broke with Reagan-era orthodoxy on welfare. 

The fact that a Republican lawmaker was going toe-to-toe with Democrats in crafting social policy that would help hard-up parents is significant, says Samuel Hammond, director of poverty and welfare policy at the Niskanen Center, a centrist think tank. “There’s a shift towards an openness to social spending on families, and that’s been driven in part by a realignment around working-class constituencies” who vote Republican, he says. 

Mr. Hammond, who helped draft Senator Romney’s plan, says there is another factor: the baby bust. “There is on the right a growing recognition that declining fertility is a problem.” 

Last year, the birthrate fell to a 41-year low in the U.S., one of several countries that recorded fewer births. The U.S. rate began falling after 2008 when economic uncertainty and job losses led couples to delay childbearing. But while the economy recovered, the birthrate didn’t. 

Senator Romney has framed his plan, which would initiate cash transfers to parents four months before a child’s due date, as a pro-natal policy. He has said it could convince some women not to have an abortion and nudge other couples to have children despite the cost of doing so. 

In an interview with the Deseret News, he expressed concern over the declining U.S. birthrate, noting that had it stayed the same since 2008, there would be nearly 6 million more children alive today. “For a civilization to survive and thrive, it must maintain its population,” he said.  

This rhetoric plays well with conservatives who see the family as the bedrock of society and fret over its fracturing. W. Bradford Wilcox, director of the National Marriage Project at the University of Virginia, says he would like to see Congress enact a child allowance. 

“I think making the child tax credit permanent would give Americans greater confidence when it comes to having and raising kids,” he says via email. 

What’s the impact of pro-natal policies?

Studies show that pro-natal policies can reverse declining birthrates, particularly when cash is coupled with other benefits, such as child care subsidies and paid parental leave, though such packages can be costly for taxpayers and may yield only a short-term boost. 

In 1988, Quebec began awarding first-time baby bonuses that scaled up significantly for additional children. Multichild families were also eligible for generous maternity leave and subsidized home loans. Quebec’s fertility rate initially rose, then tapered off in the 1990s, though it remains above Canada’s national average. 

In recent years, Poland’s conservative government has taken a similar approach in response to falling birthrates and mass emigration. Its monthly cash transfers, which are more generous for multichild families, are credited with a bump in the birthrate and have been copied by other governments in Eastern Europe trying to reverse falling fertility rates.  

Melanie Stetson Freeman/Staff/File
Rebecca Woitkowski plays with her son, Swayze, and daughter, Natasha, in Bedford, New Hampshire, Feb. 4, 2021. Ms. Woitkowski, a nonprofit policy advocate, supports extending the child credit.

By itself, making a $300 a month child credit permanent may not move the needle in the U.S., says Mr. Brown, a former staffer on the Joint Economic Committee in Congress. “The money that we’re talking about is helpful on the margins, but it’s not going to have a big bang for your buck,” he says. 

Some Americans question the need to move that needle, arguing that a baby bust is good for the planet and its finite resources and that slower U.S. population growth – the last decade (2010-19) was the slowest since the Great Depression – is an opportunity not a crisis. 

Supporters of pro-natal policy point to surveys of parents and would-be parents who say they want to have more kids than the current average of 1.6 per woman. In a 2018 Gallup survey, 4 in 10 adults said the ideal number of children in a family was three or more, suggesting a gap between aspiration and reality. 

“It’s harder than ever to support a family, and that’s why people report they’re not able to have the kids they say they want to have,” says Oren Cass, executive director of American Compass, a conservative think tank. 

President Biden also wants Congress to legislate other forms of support for families, including pre-kindergarten for all 3- and 4-year-olds and paid parental leave. But while social conservatives agree that families with children need more support, they look askance at Democrat plans to build out a federally funded child care system. Critics say this could penalize stay-at-home parents and those who arrange care for kids in their community.

The effects of a declining birthrate 

Until 2008, the U.S. fertility rate trended higher than in other rich countries, in part because of immigrants who skewed younger. But demographers warn that without immigration, the U.S. population of 330 million would flatline in the coming decades and start to resemble rapidly graying societies like Italy and Japan with low ratios of workers to retirees and sluggish economic growth. 

Mr. Hammond, of the Niskanen Center, says the U.S. fertility rate today is roughly where Japan’s was 30 years ago. “It may not seem like a problem now,” he concedes.

While Mr. Cass shares the worries over declining U.S. birthrates, he says Congress should first relieve the financial stress on existing families. 

Pushing a pro-natal agenda to support a permanent child allowance could backfire, he warns. “It’s a mistake to frame the policy in those terms, that the primary motivation is that people aren’t having enough kids and if we pay them they will have more kids,” he says. 

But changing demographics are already reshaping states like New Hampshire, which has the second oldest population after Maine. Last year, New Hampshire recorded more deaths than birth, as did half the states in the union. Fewer annual births mean smaller school-age cohorts: In the last 20 years, 1 in 7 public schools have closed in Maine, New Hampshire, and Vermont. 

At a Democratic campaign event Thursday in a park in Manchester, New Hampshire, Ms. Woitkowski, the policy advocate from Bedford, spoke in support of extending the child credit, noting that working parents in New Hampshire struggle to find affordable child care and that many are also still paying off student debt. 

Also at the event was Stacy Brown, a high school teacher in Hampton, New Hampshire. She teaches a unit about population growth and why birthrates are falling in countries like Japan. She’s also a mom, with two children, ages 10 and 7, who were eating ice cream on the sidelines. Like other parents, Ms. Brown cited the high cost of child care as a deterrent to having large families.  

“It seems so simple to me: Make it easier for families, and people will have more children,” she says. “It’s not a mystery. But we can’t seem to prioritize or value that.”

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