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Romney’s push to revive child tax credit hinges on work requirements

The Republican senator said several Democrats have "expressed interest" and spoken with him about his proposal, which includes key differences from the previous tax credit.

WASHINGTON — Over the past few months, Sen. Mitt Romney, R-Utah, has quietly pushed for a Republican-friendly version of the expanded child tax credit that he hopes could gain bipartisan support.

His proposal would bring back the direct monthly payments many parents used for six months last year to cover the cost of food, clothing and child care before Congress let the tax credit expire.

But Romney's form of extra monthly payments would add stringent work requirements, slash programs that aid vulnerable Americans and make significant changes to the tax code.

While the additional work requirements and the reduced safety net programs could be tough pills for Democrats to swallow — even before they consider the sticky issue of tax reform — a bipartisan bill might be the only way for the expanded child tax credit to land on President Joe Biden's desk.

Romney has largely worked with fellow Republicans on his plan, but conversations with Democrats have increased in the last month or so, a senior GOP aide familiar with the proposal said.

“I think momentum is growing quite a bit, and there’s more interest because folks on the right want to do something,” the aide said. “I think folks on the left are realizing if they don’t do it bipartisan, it’s not going to happen.”

It's unclear which Democrats might be receptive to Romney's pitch. He said Thursday "there's several Democrats who have expressed interest and have spoken with me." He declined to name any.

Sen. Michael Bennet, D-Colo., who has been involved with Democratic efforts to secure an extension of the expanded child tax credit, has said he's open to advancing the policy as a standalone bill, including working with Republicans to pass it. Thus far, he has expressed opposition to cutting social programs and adamantly opposes adding work requirements.

"As I’ve said in the past, work requirements don’t work, as study after study has shown," he said. "We shouldn’t punish children simply because their families are struggling to find work, particularly during a pandemic.”

The tax credit debate hasn't made great strides on the Democratic side, however, as Sen. Joe Manchin of West Virginia — a key vote for Democrats — remains opposed to reviving the previous policy.

Among Manchin’s top concerns, which Democrats have said they can’t satisfy, is that people who aren't working might receive benefits. Manchin has told reporters that any expanded child tax credit should include a work requirement, and he floated an income limit of “$75,000 or less” in an interview with West Virginia MetroNews’ “Talkline” on Jan. 27.

In a statement Wednesday, a spokesperson said Manchin "supports the existing child tax credit that is still in place," which doesn't provide direct monthly payments to parents.

The $1.9 trillion American Rescue Plan Act, which was enacted about a year ago, boosted the child tax credit from $2,000 to $3,600 per child under age 6 and $3,000 per child under age 17. While it previously applied only when tax returns were filed, the 2021 provision allowed recipients to receive half of the total credit in monthly payments from July through December.

A recent study showed just how effective the payments were in lifting children out of poverty but also how quickly the rate shot back up after the program ended.

The child poverty rate jumped from 12 percent in December to 17 percent in January, meaning 3.7 million children were plunged back into poverty after the monthly payments expired, according to a Columbia University study.

Sen. Richard Blumenthal, D-Conn., indicated that he is open to hearing about the proposal from Romney but isn’t interested in a policy that includes work requirements.

“I’m very leery of job requirements,” he said. “I’ll have to see what they propose.”

Blumenthal said there are administrative challenges to work requirements, and he raised concerns about the potential effects they could have on low-income households.

“I would want to see how it would work," Blumenthal said, “practically and — frankly — morally.”

What's in Romney's plan

Romney's proposal, which hasn’t been introduced as legislation yet, stems from his Family Security Act, a bill that would pay benefits in monthly checks of up to $350 per child and make it fully available for individuals making up to $200,000 per year or couples who file taxes jointly making up to $400,000.

His original child tax credit proposal didn’t include work requirements, but Romney said he's adding them to satisfy senators on both sides of the aisle, a nod to Manchin's position. Romney's proposal doesn't spell out all the specifics of potential work requirements; a common threshold for state-level programs is 80 hours of work a month or a comparable amount of job training or volunteer work.

An aide said the legislation is still subject to negotiation and not finalized.

“I’ve spoken with enough Democrats, including Joe Manchin, that insist that that’s essential. And, by the way, a number of Republicans, as well, say that’s absolutely essential — there has to be a work requirement,” Romney said at an event with the right-leaning American Enterprise Institute this month.

A potential work-related provision, Romney said, could include proof of employment from a parent, but he also expressed concern about penalizing parents who choose to stay home to raise their children.

Romney argued that his proposal was attractive to many Republicans and even some Democrats because it would also defray the costs of the child tax credit.

The Congressional Budget Office estimates that permanently expanding the child tax credit would cost almost $1.6 trillion over the next decade.

Romney’s proposal would make broad changes to the tax code, such as eliminating the head of household filing status and the Child and Dependent Care tax credit, which is used to help offset the cost of child care for working parents. It also would eliminate the state and local tax deduction, already a divisive issue among Democrats.

In addition, his proposal would eliminate Temporary Assistance for Needy Families, commonly referred to as welfare, and make major cuts to the Supplemental Nutrition Assistance Program, which many know as food stamps.

Prospects beyond the Senate

Romney's plan is already getting a chilly reception from advocates and House Democrats.

Rep. Rosa DeLauro, D-Conn., the chair of the Appropriations Committee, said she opposes any form of a work requirement and believes the current child tax credit is sufficient.

Work requirements may be “fine” for households with two earners, she said, but single parents in expensive cities might struggle to work and pay for child care.

“The senator would force those parents to go to work,” DeLauro said of Romney, “even though it may be better for someone to stay home.”

Most advocates who spoke to NBC News expressed little interest in pursuing Romney's plan.

The Rev. Brigette Weier, the pastor of Our Saviour's Lutheran Church in Salt Lake City, said cutting social programs and adding work requirements would do little to build on the positive effects the expanded program had on children.

"If we're removing social programs, like SNAP, and tax deductions that help families, it ends up being a wash, at best. And it's a deficit, at worst, for a lot of families," said Weier, who worked in child care for decades before she became a pastor.

Some advocates, however, said Romney deserves credit for keeping lawmakers focused on the issue, even if they don't fully agree with his position.

Dorian Warren, the president of Community Change, an advocacy group that favors the expanded child tax credit, gave Romney kudos for putting forth a proposal but said his approach to cutting social programs and adding work requirements was misguided and a nonstarter.

"I think it's really great that Senator Romney is considering this. We need more Republicans and more bipartisan support for the child tax credit," Warren said, noting that in the past the child tax credit was expanded in a bipartisan manner without cutting other programs or adding work requirements.

Until some agreement is hammered out, however, recipients of the monthly tax credit payments are left to recall the much-needed financial relief the benefit provided.

Sara Klowonn, a mother of four grown children in Viborg, South Dakota, who has since adopted four kids from foster care with her husband, said the payments gave her family the flexibility to buy their children an extra pair of jeans or replace worn-out sneakers.

She said the extra cash also meant she could spend more time with her kids, rather than work extra shifts at the nursing home where she has a part-time job.

“A lot of people don’t want to admit that they do struggle to make ends meet, but this was a real gift,” Klowonn said. “You were able to actually sit with your kids and not fall asleep while watching ‘Encanto.’”

CORRECTION (Feb. 22, 2022, 4:15 p.m. ET) A previous version of this article misstated the name of the legislation to renew the child tax credit. It is the Family Security Act, not the Family Secure Act.