Stimulus Check Update: Is It Possible? Will Monthly Boosted Child Tax Credit Payments Be Renewed?
- Just as it appeared monthly CTC payments were dead, the subject has been resurrected.
- Ongoing monthly payments would impact the majority of American families with children.
Never say never when it comes to the CTC.
Just when we thought monthly expanded Child Tax Credit payments were deader than disco, the possibility of boosted monthly payments has been resurrected.
For the past few months, Sen. Mitt Romney has been quietly working on a new plan that he believes his fellow Republicans can support. Romney -- frequently seen as a reasonable voice in the room -- has also been talking with Democrats about the proposal.
Family Security Act
The plan is called the "Family Security Act." According to Sen. Romney's website, it involves modernizing federal support to families by depositing a monthly cash benefit into the bank accounts of families across the country. It would also "support families during pregnancy, promote marriage, and provide equal treatment for both working and stay-at-home parents."
The Family Security Act calls for $350 a month for children from birth to age 5 and $250 a month for children ages 6 through 17. You'll notice that this raises the total child tax credit for a young child to $4,200; for a child between the ages of 6 and 17, the credit remains $3,000.
According to Romney, "American families are facing greater financial strain, worsened by the COVID-19 pandemic, and marriage and birth rates are at an all-time low."
The senator went on to say that the U.S. has not comprehensively reformed its family support system in nearly 30 years and that the changing economy has left millions behind. Romney also claims that the Family Security Act would provide families with greater security without adding to the federal deficit.
Proof assistance makes a difference
President Biden's 2021 American Rescue Plan was a huge success, providing Americans with a third round of stimulus funds worth up to $1,400. The bill also expanded the Child Tax Credit, increasing the credit by up to $1,600 (from $2,000 to $3,600) and sending monthly payments of either $300 or $250 a month, depending on the age of the eligible child. Not only did the American Rescue Plan help lift millions out of poverty for a time, but it also allowed families the dignity of being able to pay their bills, purchase needed medications, and fill their pantry with food.
How it would work
If passed, here's how the Family Security Act is proposed to work:
- The income threshold for payment would be $200,000 for single filers and $400,000 for joint filers. The benefit will be reduced by $50 for every $1,000 above the current Child Tax Credit.
- A parent can apply to receive the benefit four months before the due date of a new child, with a maximum monthly payment of $1,250 per family.
- The plan will be available to children with a required Social Security number (SSN).
- According to Romney's office, this plan eliminates marriage penalties.
- The adult-dependent component of the Earned Income Tax Credit (EITC) will be separately maintained to ensure that no family earns less than the EITC in its current form.
Here's how it would be paid for
Romney's office says that current spending on the Child Tax Credit and EITC amounts to $188 billion, and his plan will cost $254 billion. To offset the $66 billion shortfall, he proposes the following:
|Eliminate head-of-household status||$16.5 billion|
|Eliminate Child and Dependent Care Credit||$4.7 billion|
|Eliminate Temporary Assistance for Needy Families (TANF)||$16.5 billion|
|Change Eligibility for the Supplemental Nutrition Assistance Program (SNAP||$3.1 billion|
|Eliminate State and Local Tax Deduction (SALT)||$25.2 billion|
|Annual Total||$66 billion|
The moral of the story may be to "never say never." The moment we wrap our heads around what's coming out of Washington, something new comes along. Movement on extending the boosted Child Tax Credit has been stalled for a while, but perhaps Romney's plan will get talks going again. That can only benefit the people who came to depend on those boosted payments during the past year.
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