Child Care Is Expensive. Would a Baby Bonus Help?
Digest
Vice President Kamala Harris has proposed a $6,000 baby bonus as part of her presidential campaign platform. This proposal aims to address the significant financial burden of raising children in the United States, which can lead to a 10.4% drop in income on average from the time a baby is born. The baby bonus builds on the success of the pandemic's expanded child tax credit, which provided $3,600 payments or credits to families per child and lifted 2.9 million kids out of poverty. Harris' proposal would provide a one-time payment of $6,000 to families with newborns, along with bringing back the expanded child tax credit to provide ongoing support for families in the early years. Eligibility for the baby bonus would likely follow the current child tax credit rules, with most families earning $150,000 a year or less qualifying. While $6,000 would be helpful for many families, some parents believe it might not cover all expenses, especially the high cost of childcare in big cities. The baby bonus could cost $1.6 trillion over the next decade, with funding likely coming from federal funds, potentially through increased taxes. This has sparked debate about the program's cost and funding sources. Other countries, like Australia, have implemented similar one-time baby bonuses, which have been popular and led to surges in births. Both the Trump and Harris campaigns recognize the high cost of raising children and support providing financial assistance to families. Trump's vice president nominee, JD Vance, supports a tax credit worth about $5,000 for children.
Outlines
Kamala Harris' Baby Bonus Proposal
Vice President Kamala Harris proposes a $6,000 baby bonus as part of her presidential campaign platform. The proposal builds on the success of the pandemic's expanded child tax credit, offering a more generous one-time payment to help families with expenses during their baby's first year.
The Cost of Raising Children in the US
The cost of having a baby in the US is significant, leading to a 10.4% drop in income on average from the time the baby is born. Expenses include medical costs, childcare, and other necessities.
The Impact of Expanded Child Tax Credits
The expanded child tax credit during the pandemic provided $3,600 payments or credits to families per child, lifting 2.9 million kids out of poverty. Families used the money for essential expenses like groceries, rent, and utilities.
Funding and Debate
The $6,000 baby bonus could cost $1.6 trillion over the next decade. Funding would likely come from federal funds, potentially through increased taxes, which is a point of debate.
Keywords
Baby Bonus
A one-time payment or tax credit provided to families with newborns to help offset the financial burden of raising a child.
Child Tax Credit
A tax credit offered to families with children, reducing their tax liability or providing a direct payment.
Daycare Costs
The expenses associated with childcare, including daycare centers, preschools, and in-home care.
Financial Burden
The significant financial strain that families face when raising children, including medical costs, childcare, and other expenses.
Pandemic Expanded Child Tax Credit
A temporary expansion of the child tax credit during the COVID-19 pandemic, providing larger payments to families with children.
Urban Institute
A nonpartisan research organization that studies social and economic issues, including the cost of raising children.
Q&A
What is the estimated cost of having a baby in the US?
The Urban Institute estimates that having a baby can lead to a 10.4% drop in income on average from the time the baby is born, due to medical costs, childcare, and other expenses.
How does Vice President Kamala Harris' baby bonus proposal build on the pandemic's expanded child tax credit?
Harris' proposal offers a more generous one-time payment of $6,000 to help families with expenses during their baby's first year, building on the success of the pandemic's $3,600 credit.
What are the potential funding sources for the baby bonus?
Funding for the baby bonus could come from federal funds, potentially through increased taxes. This is a point of debate, as the program could cost $1.6 trillion over the next decade.
How has the expanded child tax credit during the pandemic benefited families?
The expanded child tax credit lifted 2.9 million kids out of poverty by providing $3,600 payments or credits to families per child. Families used the money for essential expenses like groceries, rent, and utilities.
What is the response from the Trump campaign to Kamala Harris' baby bonus proposal?
Both the Trump and Harris campaigns recognize the high cost of raising children and support providing financial assistance to families. Trump's vice president nominee, JD Vance, supports a tax credit worth about $5,000 for children.
Show Notes
Presidential candidate Kamala Harris has proposed giving families of newborns a $6,000 bonus in the form of a tax credit – an approach that’s been used by a few other countries. With rising child-care costs, will it make a difference? Wall Street Journal reporter Dalvin Brown joins host J.R. Whalen to discuss.
Sign up for the WSJ's free Markets A.M. newsletter.
Learn more about your ad choices. Visit megaphone.fm/adchoices
Table of contents
United States
