Cash payments, in place of complex welfare programs, may be a step toward extricating government from the lives and ambitions of low-income Americans.
Despite what some might say, a policy is not a bad idea just because Mitt Romney proposed it. His “Family Security Act,” which offers a child allowance and financial support for marriage, is therefore worth careful consideration. America has a family policy of sorts, and Romney’s plan brings greater clarity to it.
I will avoid the weeds as much as possible, as others have already gone into them. The centerpiece of the proposal consists of direct cash payments or child allowances to parents of children. Our current programs are scattered, indirect, and retroactive (one accrues benefits only after being taxed). The Romney plan replaces these subsidies with direct monthly payments, amounting to an increase in benefits for most people. It is budget neutral since it mostly consolidates America’s various child-support programs, such as the Child Tax Credit and Temporary Assistance for Needy Families, into one. Married couples would get a bump in support depending on how many children they have ($4,000 more for couples with three kids; $3,000 for couples with two; couples with no kids would have no change). Singles with children would have a more modest bump. Think of the child allowance as centralizing subsidies and turning them into direct payments.
More significant is how Romney’s plan eliminates much of the marriage penalty—a standard Republican talking point that has yet to be accomplished—and even adopts a marriage bonus of sorts for those under a certain income level. Married families with children and one earner would receive more of a bonus than they currently do when they file jointly—an increase of around $2,000 for those making more than $50,000. A family with two earners gets less, but Romney’s plan mostly gets rid of that longstanding penalty in the tax code.
Incentives, Marriage, and Fertility
According to family policy advocates, it is both just and prudent to promote the formation of families. Families cultivate the next generation at great costs to themselves. With less public support, fewer families form and fewer children are born and raised to honorable adulthood.
The many variations of such arguments all share the belief that monetary incentives foster family flourishing. There is a lot of pent-up demand for having children and for marrying earlier, but life is expensive so couples have fewer children and forgo or delay marriage. Living in modern cities is especially expensive, as is college debt and having a big car. Moreover, among the working class especially, tax penalties encourage people to live outside of marriage or delay it until they can afford it. The more direct the financial relief (cash payments), the more likely people will act on this pent-up demand. Or so the arguments go.
The goal of family policy is to close the gap between people’s hopes and their actual choices. Get people to marry and stay married like they say they want to. Get American women closer to the 2.4 children they say they want instead of the 1.7 they actually have.
Such theories are based on tried and true economic assumptions: subsidize an activity and you get more of it. Everyone has a price. That price might have to be much higher than contemplated today. If we paid every woman a million bucks to have a child, surely many more would have them. If we subsidized marriage to the same tune, many more would give it a whirl. Perhaps countries must simply find the right price point and mechanism for subsidizing marriage and fertility.
But there are limits, both in theory and in practice. Marrying and having children are not simply economic activities. They involve loving and sacrificing for another human being. They involve duties and life-long commitments, not contractual obligations. So family policy should aim to ease the economic barriers to marriage and children without reducing marriage and procreation to economic relationships. If successful, it can help families fulfill their duties.
Do such policies work? Advocates see hope in recent developments in Hungary and Poland, which have adopted policies encouraging childbearing and marriage (to various degrees). Hungary adopted a generous, scaled tax package for larger families. Housing allowances started in 2015. Married families with more than three children receive substantial grants (the equivalent of around $40,000) and then preferential loans and tax deductions. Couples with three children could get as much as $80,000. Couples with two kids would max out around $40,000. Many of the benefits are channeled through the married couple, not simply attached to the child. Hungary also added additional incentives: early retirement benefits for women with many children; lifetime tax exemptions for mothers with at least four children; and others in the same vein. Some of these are connected to marriage and some are not.
Poland also adopted policies in 2015 in an effort to ameliorate child poverty and increase its cratering birthrate. These send direct monthly payments equivalent to around $150 for every child after the first. On top of that, Poland has a child tax credit. Aid in Poland follows the child regardless of whether the parent is married.
Politicians in these countries boast about the effects of their policies. American conservatives have joined in, comparing the generosity of these countries favorably to the “bootstraps” approach once characteristic of America. Marriage rates have gone up in Hungary, as have fertility rates. But just how effective have the policies been? Hungary’s fertility rate went up from around 1.22 in 2011 to 1.5 in 2016 and has since been mostly level. Poland’s rates showed modest gains too, from 1.3 in 2012 to about 1.45 in 2017. It is a small increase of a very small rate. Not all of the data seem consistent with the idea that government policies caused these bumps (the bumps started before the policies, for instance).
How should we judge the potential of the Romney proposal in comparison? Consolidating child benefits is worth it—it provides clarity and easier access to benefits without involving a lot of middlemen. Government is good at cutting checks. Direct benefits like cash payments are better than indirect (supposed) benefits like national daycare. But don’t get carried away. If Hungary’s policy is whiskey, Romney’s policy is lite beer. (And Hungary’s policy is not whiskey!) Compared to the Perrier (or poison) that America’s Left offers, it’s not nothing, I suppose. Encouraging marriage may also be the best way to increase fertility. The Romney Plan does that. But it doesn’t get to the root of the problem.
Put Not Your Faith in Family Policy
Family policy so understood, however, is based on too impoverished an account of human motivation. Israel, for instance, has much higher marriage rates and fertility, despite the fact that many European countries have more robust family policies. An impending Israeli demographic collapse was conventional wisdom even by Israel’s defenders in the 1990s and early 2000s. But all that has changed. Israel’s Jewish fertility rate went from 2.6 in 2000 to 3.1 in 2015. It continues to rise among most kinds of Jewish Israeli citizens. And this was without any corresponding change in “family policy.” (Still, Israel’s generous provision may be a precondition for a successful change, even if it is insufficient to bring one about.)
Such an outlier illustrates a key limit of many people’s thinking on family policy. Unlike those of Hungary and Poland, Israeli women came to want more children and therefore had more children. Children represent hope, and people without hope are not going to be bribed into having children. Hope presupposes a universe of meaning with deeper motivations.
It helps to take a step back and consider the movements in American family policy over the past 30 years. In the beginning, there were tax deductions for children. America’s first child tax credit of $500 per child arrived in 1997. Then it was increased gradually under President Bush, reaching $1,000 in 2003 (a level that was made permanent in 2013). President Trump then doubled it to $2,000. These great accomplishments of conservative policy nevertheless coincided with sharp declines in fertility and marriage. We cannot run an experiment testing whether things would have been even worse without the policies. But we cannot conclude they had much effect either.
Today’s advocates of family policy want to close the gap between people’s hopes and the actual choices they make. Hopes are measured on surveys; actual choices on results. The gap between real hopes and reality may not be as big as our surveys suggest. Surveys alone are not enough to tell us about priorities. The fact that people have only 1.7 kids tells us more about their priorities than survey questions can. The fact that people complain about costs on surveys is also very ambiguous. Family policies are trying to solve a problem of lifestyle inflation. What people perceive as necessities are often luxuries. Expensive cars are luxuries, as are vacations, good wine, and expensive clothes. Few people in history have been more blessed with the essentials of life than modern Americans—or have had a more luxurious view of what is “necessary.” Work makes people rich while consumerism increases their demands.
When it comes to the big picture that shapes people’s hopes, technocrats tend to assume it as a given or simply ignore it. The key to moving the needle on marriage and fertility is first to move the needle on people’s real hopes and then cultivate the character to translate greater hopes into marital practice. In the past decades, family policy has always bypassed questions of gender that inform people’s hopes. The hope deficit can be addressed only by challenging today’s gender confusion.
Hopes are variable. That truth itself might give us hope. All human opinions and choices presuppose a moral and intellectual horizon, though people are not simply reducible to that horizon, and horizons are complex wholes. These horizons shape people’s hopes, as do their particular natures. Today’s opinions encourage more people to value fleeting relationships over the enduring love found in marriage. How much will family policy change patterns of behavior if the Washington Post’s recent article claiming that one in six Gen Z adults is LGBT is true? Or if our country comes to celebrate polyamory or throuples? Can family policy accomplish much if fewer people believe that their lives serve something larger than themselves, such as God or country? The Republic of Georgia has seen a sustained spike in marriage and birthing ever since its patriarch promised personally to baptize every child above the third, (though it adopted a family policy during that time too). Do Americans connect childrearing to any such ultimate ends?
No effort to encourage marriage and birth can ultimately succeed without combatting the ways in which the sexual revolution has sown gender confusion and without providing an alternative universe of meaning. Israelis act on the basis of such a universe of meaning. So do the Georgians. The promotion of an incentive-based family policy will not be enough if we don’t also fight our reigning gender confusion. Even talking up the stability and happiness of married couples is not enough. I wonder if Senator Romney will help oppose the regnant gender ideology in all its pernicious forms and talk about how they compromise family life. My guess is that he would rather not.