POLITICS
01/15/2021 17:58 EST | Updated 01/18/2021 15:08 EST

How Joe Biden Could Make Monthly Checks A Thing

Congress could transform boring annual tax credits into exciting monthly checks for people with children.

President-elect Joe Biden this week proposed a COVID-19 relief package that would deliver one-time $1,400 checks to most Americans. 

The direct payments Congress sent most households last year in response to the coronavirus pandemic were so popular with the American public that lawmakers approved a second round of checks last month, and Biden promised to do a third.

But Biden paired the checks with an array of other policies that are more complicated and outright unwelcome among Republicans on Capitol Hill, who have panned the proposal despite some support for additional direct payments. Even with Democrats controlling the Senate, passing the bill would be difficult. 

Buried inside the Biden plan, however, is an obscure policy that could be the nucleus for a program of sending people checks every month. It’s a proposal to expand the child tax credit, which currently pays working parents as much as $1,400 per child annually through refunds at tax time. 

Biden’s plan would boost the refunds to up to $3,600 per child and make it easier for lower-income families to get the full amount. 

Some Republicans like the idea of expanding the child tax credit.

“A larger child tax credit is an excellent idea,” Sen. Mike Lee (R-Utah) told HuffPost in a statement Friday. “It will alleviate child poverty and continue to lower the parent tax penalty.”

Brooks Kraft LLC/Corbis via Getty Images
Sen. Mike Lee (R-Utah), shown here in a reenactment of his swearing-in ceremony, said that an expanded tax credit would "alleviate child poverty and continue to lower the parent tax penalty.”

Sen. Marco Rubio (R-Fla.) championed a more generous child tax credit in 2017 as part of the Tax Cuts and Jobs Act. (One reason other Republicans went along is that the credit helped offset the loss of other family-friendly tax provisions in the law’s simplification of the tax code.)

And Sen. Mitt Romney (R-Utah) co-sponsored a bill with Sen. Michael Bennet (D-Colo.) to increase the tax credit in 2019. 

Biden’s proposal resembles the American Family Act, proposed in 2019 by Bennet and Sen. Sherrod Brown (D-Ohio), which would have boosted the maximum credit to $3,600 ― and instead of paying out after you file your taxes, the Internal Revenue Service would distribute refunds in advance, on a monthly basis.

Annual tax refunds are already one of the federal government’s most important antipoverty programs. Under Bennet-Brown, low-income parents would get about $300 per month in cash and would not need any earnings to qualify. Switching to monthly support would make life easier for parents, and increasing the benefit would slash child poverty by 40%. 

Biden retained the earnings requirement and omitted advance payments from his proposal, which would only apply for this year, but Democrats did include advance payments in one version of a coronavirus relief bill that passed the House last year. It’s not clear if the tax credit will remain a priority for Democrats.

Recognizing that kids are expensive and that raising them presents obstacles to employment, most other countries pay parents a child benefit or child allowance. The U.S. could get there, however backwardly, through a set of changes to its complicated system of tax credits. (Already, the federal government cuts monthly Social Security checks to senior citizens.)

The idea of a big new federal program with monthly benefits has been poison in American politics, with lawmakers often doing social policy through the tax code, but the bipartisan love of checks in recent months suggests that might not be true anymore.

Matt Bruenig, founder of a left-wing think tank called the People’s Policy Project, has advocated transforming the various tax credits available to low-income workers into a monthly child benefit.

”The checks have been wildly popular,” he said. “Now is the time to seize the energy and move the tax credits into a real benefit program.” 


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