Public policy can be both pro-market and pro-family, as the House of Representatives demonstrated on Wednesday. Republican Ways and Means Chairman Jason Smith's (R-Mo.) tax package, which included important improvements to the Child Tax Credit (CTC), passed by a margin of 357 to 70 with overwhelming support in both parties and even members of the ultra-conservative House Freedom Caucus on board. The win solidified an important truth: strengthening support for working families is not just a popular priority, but a conservative one.
The CTC, a per-child tax credit for working families, was originally a Republican idea, after all—part of the 1994 Contract with America. The formation and stability of families has always been an object of conservative policymaking. When policies harm the family, conservatives have strenuously worked to reform or repeal them. When policies promote marriage and the flourishing of children in strong homes, conservatives have supported and enacted them.
Read more: The Child Tax Credit: Who Qualifies and How to Claim It
The quintessential example of preventing harm was the 1996 welfare reform, a signal achievement of modern American conservatism. Before welfare reform, U.S. government assistance to the very poor kept them very poor. Unconditional cash payments supported millions of able-bodied parents outside of the workforce, but the payments were withdrawn if the parents went to work. Steep penalties for getting married gave parents both the message and the incentive to remain unwed. Conservatives flipped this script by requiring work, channeling support toward helping people find work, and using programs like the CTC and the Earned Income Tax Credit to get more resources to families that were working to support themselves.
Today the family faces new challenges. Indeed, the distance from today back to welfare reform is nearly as far as from welfare reform back to Lyndon Johnson's Great Society launch. The main problems today are not teen pregnancy, the explosion of unwed motherhood, and parents disconnected from the workforce, but rather the failure of families to form at all and the difficulty of achieving middle-class security on the typical paycheck.
In 2017, President Donald Trump signed the Tax Cuts and Jobs Act, which included not only a typical range of tax cuts, but a doubling of the CTC. It also included one particularly important feature, a quintessential example of a policy that promotes strong families: a new refundable portion so that working families with lower incomes could still receive the full benefit. The brainchild of Senators Marco Rubio (R-Fla.) and Mike Lee (R-Utah), this provision threaded nicely the conservative needle of providing much-needed resources while still requiring and encouraging work.
Of course, the Left can't help itself. In 2021, it temporarily twisted the CTC into an unconditional cash benefit and awaited the nation's applause. But in disconnecting cash support from work, it only repeated the mistakes of Great Society welfare programs. The American people were having none of it. They agree with conservatives that public policy should support working families, but not provide handouts. This includes working-class families themselves, who want more generous support than they are getting, but roundly reject the idea of unconditional payments. Thus, at the end of 2021, unable to muster support to continue a checks-for-all program masquerading as the CTC, the provision expired.
The Left's negotiating position—that the CTC must go even to families where no one works—slowed progress and soured many Republicans on continuing their own past leadership on the issue. The new tax package repudiates this framework in roundly pro-family fashion. It eliminates penalties on larger families. It protects the credit from future devaluation through inflation. It gives parents the ability to remain eligible based on their prior year's work if they face a one-year interruption in their income or take time off for the birth of a child. And it insists that the CTC can only be received through work, while strengthening the incentive to enter the workforce and getting more support more quickly to working families.
Chairman Smith deserves enormous credit for devising a solution that directly addressed the interests of working families in a thoroughly conservative fashion and that could earn the support necessary for passage. Speaker Mike Johnson (R-La.) also deserves congratulations for notching a major legislative win in the service of American families. Now the bill is in the hands of the Senate, which should act with all deliberate speed.
An inevitable shortcoming of the bill, but also part of its opportunity, is that its provisions are temporary. A much larger fight on tax policy is looming in 2025, when it expires. Fortunately, conservatives have been hard at work over the past few years on proposals for a durable and sustainable approach to supporting working families. Senators Rubio and Lee's CTC proposal; Senators Mitt Romney (R-Utah), Steve Daines (R-Mt.), and Richard Burr's (R-N.C.) Family Security Act 2.0—widely praised across the conservative movement—and Senator Josh Hawley's (R-Mo.) Parent Tax Credit all utilize much of the same logic as Chairman Smith's approach. Passage of the current bill thus provides the ideal foundation from which to move into the 2025 debate.
Duncan Braid is the coalition director at American Compass.
The views expressed in this article are the writer's own.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
