Romney’s family benefits: surprisingly social, and surprisingly conservative | OC Comment

In what is a break from decades of Republican policy, Mitt Romney has proposed a reform to the existing Child Tax Credit (CTC) and Earned Income Tax Credit (EITC), intending to repackage them under a modified EITC with a higher focus on supporting families. This proposal only needs 51 Senate votes to pass, and with its clear bipartisan appeal, may well do so. 

Welfare programs have always been a difficult subject to approach from a conservative standpoint. 

On one hand, welfare programs can be viewed as a drain on public coffers, an unwelcome government intrusion into private lives, and as an incentive for dependence and apathy. By providing an alternative to work, welfare programs create a perverse incentive for citizens to disadvantage themselves in as many ways possible, in order to qualify for more benefits. From this perspective, the welfare state is seen as a moral, economic, and political mistake.

On the other hand, welfare programs can be a useful tool for the state to tackle conservative issues: for example, marriage and child benefits all help to reinforce the incentives to form a stable, two-parent family, the bedrock of conservative society. This the path several eastern European states have followed, trying to counter the economic burden of family formation. 

Paradoxically, the free market itself may also require a welfare state to function. Without a “safety net” for the people that lose out, the ever-greater concentration of assets and wealth will eventually spark a revolution against the free market itself. Indeed, the original welfare state was pioneered by Bismarck as a way to undercut socialist critiques of the capitalist economy. 

So how does Romney’s plan compare? Can it be squared with conservative principles, or is it just the latest of Romney’s departures from the Republican ranks? The answer, like always, is rather complicated.

The Institute for Family Studies comes to the conclusion that Romney’s plan, while not perfect, is at least better than what the US currently has.

Firstly, in a move that will certainly gratify the fiscal conservatives among us, the plan is budget-neutral. This means that it will not require extra funding but instead will use the funds intended for the programs that will be replaced, which should allow it to become a permanently funded program under the Senatorial rules of “budget reconciliation” (Deficit spending programs must be repeatedly extended, while fully funded programs do not). 

Secondly, it attenuates some of the contradictory incentives of the previous policies. By removing the payments that disproportionately benefit single parents, it eliminates the situation where partners would have their welfare reduced in case of marriage, removing a key marriage penalty. This should translate into more marriages and therefore more stable families. 

Thirdly, and most contentiously, it increases aid to childless adults as well as families. At a first glance, this seems rather nonsensical. Why give aid to people least in need of it? This choice is related to the effects of welfare on job participation, which will be discussed subsequently. 

The conservative critique of this plan is the age-old question of dependency. By subsidizing people’s expenses, do we not reduce any incentive to work? Logically, this critique is sound, and what’s more, sometimes true. Welfare can reduce labour force participation in some cases. This is the source of conservative opposition to the welfare state; In a conservative society, it is encouraged for single adults to work and sustain themselves, not live off the government teat. 

However, if the recipients are not single adults, but instead families, then conservative principles are being upheld. Allow me to explain. 

By funding intact, married families instead of single parents, this program allows the family unit to live off one working adult. This allows the other parent to dedicate their time to raising the children. Instead of forcing both adults into the workforce while dumping their children in daycare, this welfare policy could allow the formation of healthier and more durable family relationships, instead of incentivizing single parenthood.

This is how Romney’s plan adds the “conservative” to the “social”. Instead of a cash handout based on liberal notions of “equality” and “fairness”, this plan aims for a clear result: The promotion of healthy and stable families. 

However, this plan is not without its flaws. As noted above, it increases aid to childless adults. This was done in an effort to compensate for the loss in working adults anticipated by the increased number of single-earner households as a result of the policy. Yet as we have seen, increased welfare reduces work incentives. While admirable in its effort to incentivize childless couples to work (as they have no children to take care of), this plan, in this specific instance, falls victim to the hurdle of all other welfare efforts. Instead of giving the welfare carrot to married couples, and the market-competition stick to single adults, it hands out carrots to both. Therefore the negative effects of welfare on labour participation will affect both the group that benefits from them (parents) and the group that does not (childless adults). 

All in all, the Romney plan is able to square conservative ideals and welfare practice. Though in some areas it reverts to outdated liberal solutions, this plan provides a useful “first draft” for future conservative efforts in addressing the popular demand for a welfare state by shifting the focus to marriage and the family. To paraphrase Irving Kristol on the welfare state: “The people demand it; they will get it. The only interesting political question is: How will they get it?”. Another question might be: what sort of welfare state will conservatives accept?

Will we work to create a welfare state that promotes stable families? Or will we be content for it to be a system of hand-outsthat rewards bad choices? It is up to the conservative movement to make a welfare system that upholds our morals and benefits our society. 

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