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Biden’s Child Tax Credit May Not Be As Popular As Democrats Hoped

What if giving tax relief to parents is actually an electoral liability for Democrats?
by Rich Thau
October 18, 2021
Biden’s Child Tax Credit May Not Be As Popular As Democrats Hoped
A view of the mural to be completed by children from the KU Kids Deanwood Childcare Center to celebrate the launch of the Child Tax Credit on July 14, 2021 at the KU Kids Deanwood Childcare Center in Washington, DC. (Photo by Jemal Countess/Getty Images for Community Change)

Democrats have planned to use the child tax credit that was part of the American Rescue Plan as one of the central pillars of their 2022 campaign strategy. The idea is: Biden and the Democrats passed a bill that puts actual money into the pockets of parents every month. In 2022 they will campaign on extending this program in order to gain support from people concerned less with culture wars and more with kitchen-table economics.

This plan may be flawed.

On October 12 I moderated two focus groups with swing voters, all of whom cast ballots for Trump in 2016 and Biden in 2020. Most vehemently opposed extending the tax credit.

What’s their beef?

“I think people are going to take advantage of it,” complained Jeff, 53, from Atlanta. “And you know they’re going to take on more kids, and they are going to say, ‘The government’s gonna bail us out.’”

“The child tax credit was the only [reconciliation provision discussed in the focus group that] I really have a problem with,” said Jamie, 36, from Jackson, Michigan. “We’re throwing more money towards people that we don’t really need to throw at, that we don’t have. If we just raise the minimum wage, people can survive.”

Brady, 24, from Henderson, Nevada, said this about the credit: “It seems arbitrary; it’s not targeting a certain group of need.”

“The child tax credit specifically is just going to promote more people to stay at home and not go to work, because they’re getting this free money handed to them,” argued Shifa, 24, from Sugar Land, Texas.

This last point—reminiscent of 1980s complaints about welfare—was widely shared among these swing voters. Note the following exchange I had with Lisa, 53, from Pine Grove, Pennsylvania:

Moderator: Just so I’m clear about this, there are people who are not working right now because Uncle Sam is giving them $300 per kid per month?

Lisa: Yeah

Moderator to group: How many of you personally know people who are not working because they’re getting the child tax credit?

[Three of five respondents in this session raise their hands.]

Moderator: Three of you. Specifically because of the child tax credit, they’re not going to work?

Lisa: For the person I know, it helps; I actually know two. One gets paid under the table, so she’s still collecting the child tax credit. The other person is also getting paid under the table as a bartender, and getting the tax credit.

Moderator: How does that make you feel?

Lisa: Oh, I’m not happy about it. I have to get up every day and go to work. Now, I think if you’re capable of working, and both of these people are, then they should be working. And I think that’s why we are in this situation we are. I mean, I realize . . . there are some instances where, you know, she’s trying to find a job and she’s not having success. But for these two individuals, I know they can go get a job somewhere.

Before we explored the tax credit, I started out by trying to understand what the members of the groups had heard about the reconciliation bill currently being debated in Congress. I uncovered a stunning lack of awareness that should send shudders down the spines of Democrats—and serve as a source of amusement to Republicans.

When I asked, “How many of you could tell me at least one item pending before Congress that President Biden wants Congress to approve?” only four could offer anything, and for all of them the response was about infrastructure.

Additionally, while Sens. Joe Manchin and Kyrsten Sinema are the source of endless coverage on cable news shows, virtually none of our respondents could identify them from unlabeled official photos.

We showed a head shot of Manchin, and none knew who he was; when one person finally mentioned his name, a few others agreed that it sounded familiar. When I showed a photo of Sinema, one thought it was John McCain’s daughter. Another initially thought it was White House Press Secretary Jen Psaki (until she realized she was mistaken). None of the 12 could in any way identify a photo of Rep. Pramila Jayapal, the lead negotiator for House progressives on the reconciliation bill.

Having established that the conversation about reconciliation was starting from a low level of awareness, we showed the group brief descriptions of seven key elements of the Democrats’ plan. For each, we wanted to know whether it should be something Congress should pass. Note that we didn’t include any criticism of these proposals; we merely wanted to know whether they were interested in buying the policies Democrats are selling, as follows:

  • Two free years of community college

The legislation provides two years of free community college for all students, regardless of family income. The bill would also add $80 billion in funding over 10 years for Pell Grants, which Democrats say hasn’t kept pace with the increasing cost of college.

  • Child care and universal pre-K

Every family that applies shall be offered child care assistance for children ages 0 to 5. In all, the plan allocates roughly $450 billion to lower the cost of child care and provide two years of universal pre-K for 3- and 4-year-olds, according to the House Education and Labor Committee. This proposal would keep the cost of child care at or below 7% of most families’ income.

  • Medicare expansion

This provision would expand Medicare to include coverage of dental, hearing, and vision services for seniors.

  • Extended child tax credit

Last March, Democrats expanded the child tax credit for 2021 in their $1.9 trillion COVID-19 relief plan. Under the enhancement, families receive $3,600 per child per year under age 6, and $3,000 per child ages 6 to 18. The full expanded child tax credit is available to individuals making up to $75,000, or married couples making up to $150,000. The bill now before Congress would extend this tax credit until 2025. It is currently scheduled to expire at the end of this year.

  • Cut prescription drug prices

Another key provision in the bill is aimed at helping to slash prescription drug prices. Among other things, the legislation allows Medicare to negotiate drug prices. Medicare is currently prohibited by law from negotiating for the best deal.

  • Paid family and medical leave 

Under this bill, the U.S. would have comprehensive paid leave, covering 12 weeks of paid family and medical leave. The legislation would replace at least two-thirds of earnings, up to $4,000 per month, while the lowest-paid workers would receive 80% of their income.

  • Climate change 

The bill contains a provision for a “clean electricity performance program,” which would pay utility companies that increase their renewable energy supplies by 4% per year. Companies that do not hit this benchmark would face financial penalties. The bill also provides significant funding for forest management and other wildfire control measures. There are also measures to incentivize the buying of electric vehicles and the construction of charging stations; consumer rebates to homeowners who weatherfit their houses; and financial penalties for oil and gas producers for methane leaks, among other things.

All respondents wanted Medicare to negotiate the price of prescription medicines. Eleven of the twelve supported expanding Medicare to offer hearing, dental, and vision services. The same number also supported various clean energy and climate provisions. Ten supported providing childcare assistance and universal pre-K.

Seven supported paid family and medical leave, and the same number supported two free years of community college.

At the bottom of the list was extending the child tax credit until 2025, which only four supported.

Unless Democrats fix the messaging about what the child tax credit is, who gets it, and how it is paid for, it may become a liability and not a source of electoral strength.

From what I’m seeing, anger over “welfare queens” could easily join the fear of crime and inflation as late-twentieth-century animators of voter discontent that are given new life in the 2022 midterms.

Rich Thau

Rich Thau is the president of the research firm Engagious, which specializes in message testing and message refinement for trade associations and advocacy groups. He is also the moderator of the Swing Voter Project, conducted in partnership with Schlesinger Group.