Senators Marco Rubio (R-FL) and Mike Lee (R-UT) have introduced a pro-growth economic plan that includes an increase in the child care tax credit, and the Wall Street Journal isn't happy about it. In fact, the normally prudent Journal even goes so far as to assert that the child tax credit "does nothing for economic growth."
Oh, c'mon: Let's assume that the money retained by families through an expanded credit, per Rubio-Lee, in fact does not foster immediate growth. This is a dubious argument. Personal income tax cuts spur growth just as do corporate income tax cuts.
However, let us agree, for the sake of argument, that the child tax credit is deficient in animating the kind of sustained growth serious people want for the economy. It has another, more profound benefit that the Journal ignores completely: It strengthens families. And strong families mean a stronger economy.
Productivity increases when an adequate number of people are employed using their skills, capacities, and know-how to provide quality and affordable goods and services. Development of these capacities comes heavily from personal formation within the family. As Nobel Prize-winning economist Gary Becker argued, healthy, educated, and emotionally stable children are essential to economic growth.
So, in targeting family formation through enabling mothers and fathers to better provide for their children and also to bear and raise more children, something demonstrably needed for the economy of the United States given our looming demographic deficit, the Rubio-Lee proposal would substantially abet growth in coming decades. Its facilitation of growth over time is an investment that will bear fruit in a steadily more robust economy.
The immediate costs of child-rearing are such that extra money to help families pay for the enhancement of their most fundamental "investments" – their boys and girls – is laudable.
Regrettably, the Journal has shown a considerable lack of economic common sense in attacking a proposal that would bolster our human capital capacity. FRC applauds Sens. Rubio and Lee for their foresight and justified consideration of family well-being.
Earlier in his career, Schwarzwalder was Director of Corporate Communications at the National Association of Manufacturers.