March 8, 2019

The American Family Act — A Roadmap To End Child Poverty



Since the 2016 publication of Toward a Universal Child Benefit, the Niskanen Center has been a tireless advocate of transforming the Child Tax Credit (CTC) into a fully refundable child allowance. Child allowances are not just an effective tool for reducing child poverty, but also reinforce respect for the immense pluralism of family lifestyle and consumption needs. As I put it in my presentation at the Brookings Institution, unlike many other potential interventions, child allowances “leave paternalism to the parents.”

Our work progressed in 2017 with the creation of a transpartisan coalition to promote a larger, more refundable CTC as part of tax reform. In the end, the CTC was doubled, and in a harrowing floor battle Senator Marco Rubio won concessions that expanded the refundable portion by nearly $40 billion over ten years.

At the same time, our work and the work of our allies inspired Senators Sherrod Brown (D-OH) and Michael Bennet (D-CO) to introduce a CTC expansion of their own: The American Family Act. Under the act, households would be eligible for:

  • $300 per month ($3,600 per year) for each child under the age of 6;
  • and $250 per month ($3,000 per year) for each child under the age of 17.

Over the last year, the drumbeat for a child allowance has been growing, and just yesterday the American Family Act was reintroduced, this time with over 173 cosponsors in the House and 36 cosponsors in the Senate. The numbers keep growing.

To accompany the reintroduction, my colleague Robert Orr and I are today publishing a new report that analyses the distributional impact of the American Family Act, and explores the arguments for and against a child allowance. Using the latest available data, we find that the American Family Act:

  • Creates an average net-benefit of $1,355 per family;
  • Reduces the number of children in poverty by 4.5 million, a 39 percent reduction;
  • Reduces the number of adults in poverty by 3.2 million, a 10 percent reduction;
  • Eliminates absolute child poverty, and reduces deep child poverty by 50 percent.

There is much more in the full report, available here.