For the Children

If there were an “American Conservatism 101” course, it would have a heading in the syllabus: “Subsidize something, and you get more of it.” In the 20th century, modern states started subsidizing old age. In the United States that includes Social Security and a number of tax incentives meant to create and redirect income to the elderly. The most appalling forms of elder poverty have been largely eliminated by direct cash payments, federal intervention in health care, and induced savings and retirement accounts. This has produced a generation in old age — the Boomers, who control over half of the nation’s household wealth. Modern welfare states were premised on growing populations, where one generation is larger than the last.

You see the problem.

You could call it a lack of investment in our own posterity. Demographers see it in the steep decline in family formation and in American women’s decreasing fertility rate, which has crashed well below replacement level, to 1.73 children per woman. This rate is set to drop even lower in the wake of the pandemic. A quarter of America’s Millennial women are projected to die childless, though most of them want to become mothers. For decades, the average American woman has said she desires to have a larger number of children than she does. This desired fertility rate would fall between 2.3 and 2.5 children per woman. Lyman Stone of the Institute for Family Studies (IFS) points out that the gap between what women desire and what they realize in their own families means that “for every 10 women in America, there will be 6 missing children.”

Nearly three in five childless Millennials say they don’t have kids because it is too expensive to raise them. Millennials are often ridiculed as complainers, but in this case, they are probably telling the truth: Millennials control just 3 percent of the nation’s household wealth. They are producing fewer children than any cohort preceding them. When Boomers were the age of today’s Millennials, they were, as a generation, closing in on holding nearly a quarter of the nation’s household wealth. There’s good evidence to suggest that the ever later age of marriage accounts for a substantial drop in American fertility.

At the bottom edge of this already bleak picture about families and fertility is the fact that the United States has the highest child-poverty rate of any country in the developed world, after taxes and transfers are counted. Samuel Hammond and Robert Orr of the Niskanen Center found that “the United States spends only 0.7 percent of GDP on family social expenditures, of which the share devoted to cash benefits, 0.1 percent of GDP, is the lowest of any OECD [Organisation for Economic Cooperation and Development] country.” It’s not just the Millennial would-be parents who are financially stressed. We have a picture of child poverty that doesn’t flatter the wealthiest nation on earth.

Family policy in the United States has stalled between two ideas for the past three decades. From the left, the main idea is adding universal child care to existing welfare arrangements. Universal child care would likely entail the expansion of public school toward the crib and the creation of a child-care workforce to give standardized care. The Left has claimed that this would empower more new mothers to reenter the workforce earlier after birth and that, as a result, they would suffer fewer of the wage setbacks associated with motherhood. For a progressive, that’s a win for feminism and a blow against child poverty in one stroke. In some forms, the proposal would also create a new worker constituency, like teachers’ unions, that could be politically captured. Perhaps most worrisome to conservatives, this would extend the reach of professional educators — and the ideological fads they endorse — earlier into the lives of children.

On the right, the primary idea has been the child tax credit. For years, Senators Marco Rubio and Mike Lee have advocated greater tax relief for young families. The tax credit, unlike some welfare policies, is conceived as a further incentive to work. It is premised on the idea that direct welfare payments to families could disincentivize parents from having any job at all, which is worse for the whole family. Families in which the adults are unemployed are likelier to socialize their children into antisocial behaviors and ultimately confine them to generational poverty.

But now, some other conservatives — seeing the child-poverty numbers, the plunging fertility rate, and the social atomization that comes with shrinking kin networks — are arguing for giving families cash allowances.

The most important and serious proposal is offered by Utah’s Senator Mitt Romney. And his plan offends partisans of the last two decades. His Family Security Act would do away with the few welfare outlays, including Temporary Assistance for Needy Families (TANF) and the Child and Dependent Care Credit. In their place, he would devote $4,200 a year for each child up to age five and $3,000 a year up to age 17 in cash payments administered by the Social Security Administration. The payments would eventually taper off for the highest-income families, but the allowance would be something like a universal income for parents and their children.

By eliminating TANF and some oddities of the tax code, such as the remainder of the state- and local-tax deduction, the proposal would be budget-neutral. Romney’s plan would also reform the earned-income tax credit (EITC) by simplifying it. Counterintuitively, Romney’s reform of EITC would give even more benefits to the childless than it does currently, providing them a greater incentive to work while reducing work incentives for parents. In other words, Romney’s plan assumes that idleness is bad for childless people, but it takes a neutral stance on the question of whether parents should work in the marketplace or stay home with the kids.

Notably, Romney’s allowances would start before birth, implicitly recognizing the humanity of the unborn child and the financial needs of expectant parents. These needs are often what parents cite as reasons to consider abortion. In Spain, a policy similar to Romney’s coincided with a drop in the abortion rate.

Romney’s proposal is part of a bumper crop of family-policy ideas on the right, most of them involving some kind of allowance. Family policy has been one of the main arenas for action of the newer conservative-nationalist governments in Central Europe. The Serbian Progressive Party (which is right-wing and nationalist in origin) instituted cash benefits to encourage more births. Poland’s Law and Justice Party gave modern Poland its most generous welfare arrangement in the 500+ program, which gives a direct cash allowance of 500 zlotys per child. Poland’s fertility rate had fallen to the frightening level of 1.29 children per woman. Some Polish progressives would prefer that the Polish state direct the spending of the welfare money, but the direct cash benefit lets families choose their own priorities and is immensely popular.

Viktor Orbán’s Hungary has instituted massive financial incentives not only to increase Hungary’s birth rates but to halt emigration. These include a family housing-allowance program that amounts to a $36,000 grant to buy a new home. The loan is erased upon the birth of a third child. Coupled with major tax incentives, a total payout could reach as high as $80,000, IFS’s Stone estimates. And the incentive is very strong. Average annual incomes in Hungary are between $11,000 and $15,000. The birth of a third child to a couple could mean a windfall of “somewhere between $15,000 and $62,000 in extra income,” Stone says.

Some early results are encouraging. Between January 2019 and January 2020, the Hungarian fertility rate went up from 1.4 to 1.6 children per woman, and the number of weddings in the country jumped 100 percent. But some of those fertility gains may have been immediately erased by COVID-19’s depressive effect on fertility. Poland’s fertility rate climbed from 1.32 in 2015 to 1.46 in 2018. As in Hungary, the numbers are encouraging but not a revolution. The Polish government has tended to focus on eliminating child poverty rather than reducing the nation’s poverty of children.

But child allowances aren’t just the preserve of new nationalist governments; they are an established part of many states. Luxembourg pays out a monthly cash benefit amounting to $3,787 for each child annually. Australia and the United Kingdom have less generous but still substantial direct-cash-transfer programs.

Senators Rubio and Lee responded to Romney’s proposal by reiterating their support for an expanded child tax credit and their argument that direct cash benefits disincentivize work. That criticism was echoed by Scott Winship of the American Enterprise Institute, who saw in Romney’s proposal a step backward to the pre-1990s welfare system. Winship argues that for the people who would, if they could afford it, choose single parenthood or non-working parenthood, “child allowances are allowances for behavior that would be expected to hurt their own long-term prospects and, more importantly, the wellbeing of their children.”

Standing in between Romney and Rubio-Lee is Romney’s former adviser Oren Cass, and Cass’s colleague Wells King, at American Compass. They propose keeping TANF as part of the existing safety net, leaving the question of welfare policy as one that should address solely the plight of those who cannot provide for themselves.

Instead of an unconditional and nearly universal allowance, the Cass-King child benefit would have a work requirement and a marriage bonus and stipulate that benefits should not exceed one-twelfth of the prior year’s total earnings. The Cass-King plan would more narrowly target young families in need, with the aim of giving the biggest boost to those who are on the way to self-sufficiency. The work requirements and the larger tax burden for top earners fill out the social compact underlying their proposal. For Cass and King, parents must have a stake in funding the child benefit themselves if it is to be durable. The Cass-King benefit also takes pains not to be confused with a “parenting wage,” to avoid creating the misimpression among recipients (or worse, politicians and regulators) that familial relations can be understood as just like market relations.

At the Niskanen Center, Hammond and Orr point to Canada’s experience with child benefits and that nation’s increasing total employment. It was not cash itself that created a disincentive to work in previous dispensations of welfare, they say, but “the high implicit marginal tax on earnings as the benefit was clawed back.” They note that the only group who responded to Canada’s 2006 institution of child benefits by withdrawing from paid work were mothers of children under six years of age.

Perhaps the most radical approach to American family policy is the one presented by Gladden Pappin and Maria Molla in American Affairs. It would offer a generous cash benefit and a “stamps” program to offset the cost of child care broadly defined, including baby food or private-school tuition. Their proposal dedicates roughly 8.7 percent of GDP to a comprehensive program and uses aggressive incentives to push individuals toward a conservative and stable family life — encouraging marriage and work, not just subsidizing whatever arrangement the parents have landed in. Pappin and Molla’s proposal would take American social spending dramatically upward, toward European levels.

It’s natural that countries such as Poland and Hungary, with direr fertility rates, threats of mass emigration, and an uglier 20th-century history than America’s, would embrace with great energy a family policy aimed at increasing birth rates.

That so many American conservatives recognize the need for rethinking family policy is heartening. That the conservative policy analysts have a hard time rallying around a single approach reflects the seriousness of this change in orientation. A new emphasis on family policy could shift how conservatives and their countrymen view the state and its role in our society. But these debates and the inability of conservatives to agree on one approach also reflect some trepidation. George W. Bush’s “ownership society” initiatives had some of the same aims — namely creating incentives for people to form households by making homeownership easier to achieve. But the result was that people who could least cope with debt piled up unsustainable amounts of it.

We shouldn’t underestimate the scale of the challenge. Human civilization is still only barely coming to grips with the civilizational costs of reliable contraception. Whatever its benefits to family planning, contraception allows the living to put off their investment in the future of the human race in order to enjoy more comfort in the present, often believing that, by doing so, they pass on more advantage to the smaller number of children they do choose to have.

The modern welfare state was built as a kind of financial contract premised on the idea that the generation yet to be born would be larger than its predecessors. That is jeopardized by falling birth rates, but it is only the tip of the civilizational iceberg. It is conservatives who are most sensitive to the notion that society is a covenant between the dead, the living, and the unborn. This covenant is spiritual in nature. A nation that does not expect children is a nation whose living members feel less invested in the society around them. They lack “kin in the game.” Without a physical posterity capable of receiving its inheritance, the civilization brought forth by the labors and sacrifices of those who came before us loses value in the present. A conservative intuits that the empty crib and the town square denuded of its statuary are connected.

Therefore it’s unsurprising that the most dramatic turnaround in modern fertility was accomplished not by mere policy but by religious fervor. The head of the Georgian Orthodox Church, seeing the trends in his nation, promised in 2007 to personally baptize any third child born to a family. This promise led to a long and sustained baby boom and raised Georgia’s fertility rate from below to above replacement level for a decade. The increase in fertility was almost entirely concentrated among married parents, and additional state benefits to families seemed to augment the trend only slightly.

For some conservative policy-makers, the state’s role should be a minor one, making room for families to do what’s best for themselves. Perhaps conservative statesmen and intellectuals should see their own role just as humbly. They can point the government’s efforts toward facilitating family formation and supporting young families; what they are debating about is the contour of “income smoothing,” softening the hard edges of a family budget at a propitious hour. But children are a blessing from above, not a blandishment from a federal department. Ultimately our hard hearts must be softened first, which means God must do His work, too.