America’s social safety net is a well-meaning patchwork of federal, state, and local programs that make poverty easier to endure rather than easier to escape. But it doesn’t have to be this way. Senator Mitt Romney of Utah recently released a plan that would change the way government provides aid to families with children. This plan moves the social safety net in the right direction by replacing counterproductive programs with an approach that empowers families.
The Family Security Act (FSA) would provide a monthly cash benefit to families with children worth up to $4,200 per year until age five and $3,000 per year until age 17. The plan is projected to cost $66 billion more than the current tax credit for children but is paid for by replacing other federal programs such as Temporary Assistance for Needy Families (TANF) and the tax credit for daycare.
The plan would also replace the state and local tax deduction that is primarily used by high-income households in high-tax states such as California and New York.
Provisions in Senator Romney’s plan move the social safety net in the right direction and it includes principles we can build on for broader reform at the federal, state, and local levels of government.
Empower families by allowing them to spend money as they see fit. Tax credits are limited, only applying to childcare or certain types of assistance. Cash can be used based on each family’s unique needs and preferences. This shift would signal a belief in parents to do the right thing for their families rather than a belief that parents need to be micromanaged by government bureaucrats.
Simplify social assistance so people can focus on building their future. The existing safety net is a jumbled mess of overlapping programs that are difficult to navigate. It is tough for people to find work and become self-sufficient when navigating and enrolling in social assistance programs requires someone’s full-time attention.
Target assistance to those who need it most. As incomes increase and situations improve, a thoughtful phase-out keeps the cost, and thus the taxes required to pay for it, lower than a universal benefit. Phase-outs that are too aggressive can deter people from moving up the income ladder since more income means a smaller benefit, but ultimately some phase out is the right move – even if it comes with a small disincentive to work.
Budget neutral, effective social assistance is sustainable. The federal government spends over $350 billion per year on safety net programs, and this doesn’t include many health-related programs, social security, or state and local spending. The problem is not a lack of money, but an inability to use money effectively, as exemplified by overlapping programs that duplicate administrative costs and fail to help people escape poverty. Reforming and replacing less-effective programs with a more flexible and empowering option is possible. This recognizes the agency of struggling Americans, while also acknowledging the unsustainable trajectory of federal spending.
Public policy is never perfect and requires making trade-offs. If we truly want to help people escape poverty – rather than simply endure poverty – we would do well to build on the discussion Senator Romney’s proposal has started by continuing to engage one another in a broader conversation about improving our existing social safety net in a direction that empowers people rather than controls them.
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February 11, 2021 at 03:53AM
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Romney’s Family Security Act Is A Step In The Right Direction - Forbes
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