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Democrats Call Their Latest Build Back Better Plan "Transformative"

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EDITOR'S NOTE: Democrats have a penchant for calling President Biden’s Build Back Better spending plan “transformative,” but that’s not a good thing, according to Matt Weidinger, a senior fellow and the Rowe scholar in poverty studies at the American Enterprise Institute. The author argues in the Washington Examiner that “minus key exceptions, it’s just a trillion-dollar grab bag of recycled government ‘stimulus’ benefits.” This includes the child tax credit and other forms of Democrat-sponsored welfare programs that come with no work requirement, Weidinger writes. He also cites statistics on the lack of support for these free checks with no contribution to the system and concludes that the “change may be transformative — but certainly not in a way most people support.”

Democrats have been fond of calling their latest “Build Back Better” spending plan “transformative.” But minus key exceptions, it’s just a trillion-dollar grab bag of recycled government “stimulus” benefits.

One of these exceptions is the “child allowance” payments now being sent out monthly to some 35 million households, including millions of nonworking adults for the first time. Those payments, extended by the plan, would truly transform the system for the worse.

These checks reflect liberals’ efforts to replace successful work-based welfare reforms with old-style welfare checks that have zero work requirements. The latest spending plan continues the bigger benefits and monthly check policies first included in the March 2021 American Rescue Plan, which was framed as providing relief from the pandemic. Yet these enlarged and now monthly child allowance checks do nothing of the sort. Instead, they repeal the work requirement for collecting what previously was tax relief provided to working parents. Now parents no longer need earnings to collect the new checks, and the benefits no longer rise as earnings and tax payments grow. Everyone, except for the richest parents, collects the same amount per child each year.

In just its first year, this enormous new monthly benefit program, a de facto universal basic income for parents, already supports more recipients than the Social Security programs Franklin D. Roosevelt created, now in their ninth decade. And by paying that explosion of government benefit checks without expecting adults to work, the IRS has turned into America’s largest welfare benefit-paying agency.

So why aren’t they making those bigger monthly checks permanent, as President Joe Biden and other key Democrats have said they intend? It’s simple: It would come at a staggering cost. The one-year extension in the plan alone costs $120 billion — more than the nation spends each year on food stamps, Section 8 housing, employment and training services, and energy assistance combined. A new analysis from the Congressional Budget Office found that continuing those checks permanently would cost another $1.6 trillion just in the first decade. Limiting that extension instead to one year is the largest gimmick in a bill chock-full of them. If other similarly “temporary” programs were made permanent, CBO reported the cost would swell by a staggering $3 trillion.

The plan permanently extends just one part of this policy: the continued “welfarization” of the child tax credit. Even if the larger monthly benefit checks end in late 2022, the repeal of the long-standing work requirement and work incentive would continue, thereby continuing to benefit nonworking parents in future years. Under this permanent change, nonworking parents could still claim the annual $2,000 per child benefit paid to middle-income parents who work full time and pay income taxes. What was formerly tax relief that promoted and encouraged work would instead become an annual welfare check — forever.

Most people continue to oppose converting this work support into a benefit check for those “unwilling to work,” as Rep. Alexandria Ocasio-Cortez once put it. One recent poll found that only 28% of voters said they preferred paying this benefit to all families regardless of whether they work. Even current recipients are underwhelmed by the payments. Another recent poll by NPR/Marist found that a large majority of adults (64%) who received these payments say they “help a little,” but more believe they don’t help at all (21%) than report they “help a lot” (15%).

Independent voters said they believe the Build Back Better plan won’t lower inflation, create jobs, or “help people like you.” In West Virginia, home to Sen. Joe Manchin, the apparent slayer of Build Back Better, voters are even more pessimistic, with 53% strongly opposing the plan and 28% strongly supporting it.

In the end, paying these federal benefit checks to parents who don’t work is a rejection of both the successful work-based welfare reforms that former President Bill Clinton signed in 1996 and the child tax credit created in 1997 to help promote work over welfare. That change may be transformative — but certainly not in a way most people support.

Matt Weidinger is a senior fellow and the Rowe scholar in poverty studies at the American Enterprise Institute.

Originally posted on Washington Examiner.

 

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