Capitol Hill can be a troubling place. There’s name-calling, grandstanding, duplicity, occasional corruption, and more bad policy than one writer could ever fully address. There are also hordes of lobbyists dressed to the nines trying to coax Capitol Hill staffers to their side, a big reason Congress adopted so-called temptation rules barring gifts to lawmakers and their aides.
But every once in a while there is a shiny example of what is good on Capitol Hill – when political parties drop the charade, when lawmakers put aside petty differences, and when good policy that benefits large numbers of Americans is enacted into law – like the Child Tax Credit (CTC).
The CTC was originally a part of the House Republicans’ Contract with America, and it was eventually championed and passed as part of the Taxpayer Relief Act of 1997. The original tax credit provided a $500-per-child nonrefundable credit. That means that it primarily benefited middle- and upper-income families, but it was a start.
The thing about kids is that they are expensive, and the costs can be a major disincentive to have kids. While $500 dollars of tax relief obviously didn’t fully offset this cost, it did slightly ease the burdens associated with having and raising kids in the first place. However, and possibly more importantly, it helped provide resources in one of the most important places that a society could provide resources – our future leaders.
This is important because, as Dr. Garret Jones makes the case in Hive Mind, better education and schooling can raise IQ. Higher IQs lead to higher savings rates, more productive teams, and even more effective bureaucracies. Most importantly Dr. Jones makes the case that higher IQs are a bellwether of a country’s overall prosperity. In other words – if we focus on ways to help our kids today, we will be a better country tomorrow.
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Now, that initial CTC wasn’t perfect, but it was a start. Since then, the credit has been updated to become more valuable – doubled on two occasions – and expanded to reach more people by becoming refundable. However, one of the more interesting changes happened in the fairly recent American Rescue Plan (ARP). The ARP was one of the COVID Relief bills and looked at addressing some of the long-run impacts of the pandemic as well as the troubles that the recovery was sure to experience. It once again increased the size of the CTC (now $3,000 and $3,600 for kids under 6, and instead of being a tax refund that is claimed at the end of the year on your taxes, it is now broken down into monthly checks delivered to families with kids.
These were good changes, but they aren’t the most important part – the updates were passed by a Democrat-controlled House and Senate and a Democrat-controlled White House. The urge among my fellow Republicans to fight this change are understandably strong, but we must remember - the CTC is bipartisan.
There is still room for politicians to work together. Members of both parties are still fighting for American families. They still care.
We often get caught up in the infighting between parties. Grudges turn into public policy fights. But, if we can all rally behind our kids, then that is a start to a better future.
This is important to remember heading into the winter – before the back and forth starts up again -- we need members of Congress to stop and remember why they got in the fight in the first place, to make this country better off for the next generation. What better way to do that than to ease the financial burden of raising kids? Our children will grow up healthier, smarter, and more productive. That helps us all.
When there is a political fight over Capitalist vs Socialist policies, or when there is a fight between conservative and progressive ideals – we need to step back and look at the bigger picture. We need policies that help make us a better country tomorrow. The CTC is a bipartisan approach that does just that.
Charles Sauer is an economic policy expert, author, and the President and Founder of the Market Institute.
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