Congress ended pandemic money for parents, but some states have embraced the idea
For a brief period of time during the coronavirus pandemic, the federal government gave most parents monthly money — up to $300 per child — with no job requirements or restrictions on how the money could be spent.
The experiment, through an expanded child tax credit, died last year after 12 months, when Republicans and Sen. Joe Manchin III, the moderate Democrat from West Virginia, refused to renew it.
But a growing number of states are moving forward with their own programs, often with Republican support. Last week, Colorado became the ninth state in two years to guarantee some form of cash income to its poorest parents. The law, which was passed with bipartisan support, will be the second most generous law in the country, allowing parents to earn less than $35,000 a year and up to $1,200 a year for each child under six.
Minnesota’s program, which became law last month, is the most generous, guaranteeing families earning $35,000 or less with up to $1,750 in cash annually for each child under age 17.
“Focusing on the well-being of children and supporting families has been a really big selling point,” said Halah Ahmad, vice president of the Jain Family Institute, a think tank that supports guaranteed income and worked with Colorado lawmakers to pass the new program.
The state’s child tax credits are much smaller than the federal benefit was, and a household’s budget is unlikely to change dramatically. At least initially, most will be paid annually rather than monthly, which may make them less useful in day-to-day spending decisions.
Still, proponents of the programs say they will set an important precedent and test the theory that governments can expand financial assistance to families without discouraging parents from working outside the home — a longstanding political and economic concern.
It was in response to those concerns that President Bill Clinton reshaped federal Social Security in 1996 by linking work requirements to financial assistance for single mothers. But the pandemic, inflation and childcare shortages have prompted some lawmakers to rethink that model.
In addition to Colorado and Minnesota, New York, California, Maryland, Massachusetts, New Jersey, Vermont and New Mexico have also implemented guaranteed income child discounts over the past two years, with cash payments ranging from $25 to $1,083 per year per child. depending on family income.
The policy, most popular with Democrats, has won about a third of Republican state legislators in favor, according to an analysis by the Jain Family Institute. That’s in stark contrast to Republicans in Congress, who have united around the idea that child tax credits should be tied to work requirements.
State Senator Janice Rich, a Colorado Republican representing parts of the rural Western Slope, said co-sponsoring the legislation was a piece of cake because it would help families struggling with inflation in housing, child care and energy costs.
“I can’t help what the federal government decides,” she said, referring to Republicans in Congress who opposed making the expanded federal tax credit permanent. “It seemed like the right thing to do for families in Colorado.”
Ms. Rich noted that other early childhood issues had also been bipartisan winners in the Colorado legislature, such as efforts to improve access to pre-K and affordable child care.
Still, there’s a lot of debate about expanding tax credits for children, for legislators in both parties. In Montana this year, a coalition of Democrats and conservative Republicans killed an attempt by Governor Greg Gianforte, a Republican, to provide $1,200 per child annually to families earning up to $50,000.
Some legislators prefer that public money be spent on established childcare programs, while others remain concerned that cash payments will discourage employment.
“We don’t want to go back to pre-Social Security reform,” said Kevin Corinth, a senior fellow at the American Enterprise Institute, a center-right think tank and former White House economic adviser under President Donald J. Trump.
In Washington, he added: “Republicans seem pretty united in the view that you shouldn’t get a child tax credit unless you have a certain income. The fact that a state like Colorado has Republicans buying the child support is somewhat surprising.