Megabill’s Baby Bonus Is Civilizational Strategy for Some, Questionable for Others

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Similar policies elsewhere in the world have hit snags.

WASHINGTON—Parts of the One Big Beautiful Bill Act are being seen as encouraging people to have children at a time of falling fertility in the United States.

The version that passed the House in May raises the child tax credit from $2,000 to a maximum of $2,500 per child, while a draft from the Senate’s Finance Committee sets that new ceiling at $2,200. Both versions of the megabill include a tax credit for paid family and medical leave.

One eye-catching proposal is the “Trump account,” a savings vehicle tied to a stock index.

Newborn American citizens whose parents both have Social Security numbers would start life with a one-time deposit of $1,000 from the government. Parents or legal guardians can contribute more to the account until the beneficiary turns 18.

When asked in April about this “baby bonus,” President Donald Trump said: “Sounds like a good idea to me.”

House Speaker Mike Johnson (R-La.) said in early June that the policy “gives every eligible American child a financial head start from day one.”

The CEOs of Dell, Goldman Sachs, and other firms have praised the accounts, and Martin Capital’s Rod Martin described them on social media platform X as a “civilizational strategy” in response to the declining birth rate.

Skepticism

Some experts are skeptical that the pro-family element of the megabill could make a difference.

“In general, the literature would suggest that baby bonuses, if large enough, have only a temporary effect at best,” Willem Adema, an economist with the Organisation for Economic Co-operation and Development (OECD), told The Epoch Times in an email.

OECD analyses have linked paid parental leave, incentivized in the megabill, and support for child care to higher fertility rates.

Baby bonuses and comparable policies in Hungary, Japan, and Poland have had limited and mixed results.

Robert Breunig, a public policy economist at Australian National University, has studied Australia’s baby bonus. Under the policy, which was introduced in 2004 and discontinued a decade later, the government paid families who had, or adopted, new children.

Some research has linked the Australian bonuses to an uptick in the fertility rate. Yet, in the years before it ended, the fertility rate trended down again.

By Nathan Worcester

Read Full Article on TheEpochTimes.com

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