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Luke Shaefer proposal for Universal Child Allowance influences Senate tax proposal

November 9, 2017

On June 21, a proposal by Christopher Wimer (Columbia University), Jane Waldfogel (Columbia University), and the Ford School’s Luke Shaefer – “A Universal Child Allowance to Combat Child Poverty” – was published in Spotlight On Poverty, a non-partisan initiative focused on poverty policy debates.

In their proposal, the social scientists recommend converting the Child Tax Credit (CTC) into a universal monthly child allowance, providing support to all families with young children. They provide three potential models: monthly payments of $250 per child regardless of age; monthly payments of $300 per child under age 6 and $250 per child ages 6-17; or monthly payments of $300 for the first child under age 6 and $250 for the first child age 6-17, with a reduction in the amount per child for each subsequent child in the household.

As they note, every other wealthy democracy in the world has such a program – and the U.S. could greatly reduce childhood poverty by adopting such a policy and virtually eliminate extreme poverty for children in households with less than $2 a day in income.

On October 26, two Democratic U.S. Senators – Colorado’s Michael Bennett and Ohio’s Sherrod Brown – unveiled legislation that would more or less convert the CTC into a monthly payment program and greatly raise the value of the credit, allowing low and middle-income families to receive more benefits. As noted in both Slate and Vox articles examining the proposed American Family Act of 2017, families would get $300 a month for each young child (ages 0-5) and $250 for older children (ages 6-18).

While not a universal program, both authors for Slate and Vox note that the Bennett and Brown CTC proposal bears some striking resemblance to the one proposed by Wimer, Waldfogel, and Shaefer, and that it appears to rely heavily on their and other poverty research. And more importantly, it would achieve some of the researchers’ goals to remedy some of the negative effects of recent welfare reforms.

“I’ve really grown to think that simple and near universal is better,” Michigan’s Shaefer told Jordan Weissmann of Slate. “I think [Bennet and Brown’s bill] lives up to what we need as a cash safety net, a base level that families can’t fall behind, while providing a tax cut to middle class families all in one fell swoop.”

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--By Jackson Voss (MPP '18)