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SECURE OUR CHILDREN ACT

A Bill to Establish a Permanent, Fully Refundable, Monthly Child Tax Credit and Birth Support Payment to Strengthen American Family Economic Security

Revision 2.5

To amend the Internal Revenue Code of 1986 to establish a permanent, fully refundable, monthly Child Tax Credit; to provide a one-time Birth Support Payment to families upon the birth or adoption of a child; to establish the Child Security Contribution to fund these benefits on a sustainable basis; to strengthen economic security for American families with children; to coordinate with the American Prosperity and Stability Act; and for other purposes.

SECTION 1. SHORT TITLE

This Act may be cited as the "Secure Our Children Act" or "SOCA."

SECTION 2. FINDINGS AND PURPOSES

(a) Findings

Congress finds that:

  1. A monthly, fully refundable child allowance reduces child poverty and food insecurity, improves family cash flow, and stabilizes household finances through economic shocks.

  2. The tax code should support children regardless of parental earnings in a given month or year.

  3. A shared contribution from all Americans -- proportional to income -- provides fair, sustainable, and politically durable funding for child benefits while reinforcing the principle that every citizen has a stake in the well-being of the next generation.

  4. Administrative experience from 2021 demonstrated the feasibility of advance monthly payments, while also revealing the need for improved outreach to non-filers and robust safe harbors.

  5. Making the credit permanent, inflation-indexed, and simple to claim creates durable anti-poverty effects and reduces bureaucratic friction.

  6. Research demonstrates that household income declines significantly around childbirth, with average declines exceeding 10 percent during the birth month and single mothers experiencing earnings drops of approximately 31 percent in the months surrounding birth.

  7. The first months of a child's life are critical for development, and economic instability during this period creates lasting harm to child outcomes.

  8. A one-time birth support payment provides timely, flexible assistance that allows families to address their unique circumstances during a pivotal period in their child's life.

  9. Family economic security is a foundational element of a prosperous democracy and complements the infrastructure established by the American Shared Prosperity Compact.

  10. Children do not choose their parents or their family's economic circumstances; support for children should not be conditioned on parental income level.

(b) Purposes

The purposes of this Act are to:

  1. Establish a permanent, fully refundable, monthly child tax credit pegged to child age.

  2. Remove earnings phase-ins that exclude the poorest children.

  3. Provide a one-time birth support payment to stabilize household finances during the economically vulnerable birth period.

  4. Coordinate with APSA so that credit amounts and birth support payments do not reduce American Prosperity Stability Payment benefits.

  5. Establish a Child Security Contribution -- a modest, universal income-based contribution from all Americans -- to fund child benefits on a sustainable, fiscally responsible basis.

  6. Require transparent reporting, strong error-reduction, and accessible enrollment for non-filers and the un/underbanked.

SECTION 3. DEFINITIONS

For purposes of this Act and the amendments made by this Act:

  1. Code means the Internal Revenue Code of 1986.

  2. Secretary means the Secretary of the Treasury or the Secretary's delegate.

  3. Qualifying child has the meaning given in section 152(c) of the Code, except as modified by this Act.

  4. CPI-U means the Consumer Price Index for All Urban Consumers.

  5. Birth Support Payment means the one-time payment provided under Section 4A upon the birth or legal adoption of a qualifying child.

  6. Gestational parent means an individual who is or was pregnant with a qualifying child, including an individual acting as a gestational surrogate.

  7. Expected due date means the date on which a child is expected to be born, as certified by a licensed physician, nurse-midwife, or other qualified healthcare provider.

  8. Child Security Contribution means the income-based contribution imposed under Section 7(a) to fund the child tax credit and Birth Support Payment.

  9. Solvency ratio means the ratio calculated under Section 7(c)(3)(A) to assess the funding adequacy of the Family Security Stabilization Account.

SECTION 4. PERMANENT CHILD TAX CREDIT; AMENDMENTS TO SECTION 24

(a) Amount of Credit

Section 24 of the Code is amended:

  1. By striking "$2,000" and inserting "$3,600" for a qualifying child who has not attained age 6 at the close of the calendar year; and

  2. By striking "$2,000" and inserting "$3,000" for a qualifying child who has attained age 6 but not age 18 at the close of the calendar year.

(b) Refundability and No Earnings Phase-In

Section 24 is amended to provide that:

  1. The credit is fully refundable without regard to earned income or payroll tax liability; and

  2. The present-law earned-income phase-in and additional child tax credit mechanics are repealed.

(c) Monthly Advance Payments

Subtitle F is amended to add a new subchapter establishing an Advance Child Tax Credit Program under which:

  1. Default monthly payments equal to one-twelfth of the annual credit are made for each qualifying child listed on the taxpayer's most recent return or as otherwise verified.

  2. Taxpayers may opt out of advance payments.

  3. The Secretary shall reconcile advance payments with the allowable credit at filing, subject to the safe harbor in subsection (d).

(d) Safe Harbor for Overpayments

  1. A good-faith recipient whose advance payments exceed the allowable annual credit due to changes in custody or family size shall have up to $2,000 per child of such excess waived, unless fraud is found.

  2. The Secretary shall provide income-based installment agreements for any remaining balance due.

(e) Age and Eligibility

The credit applies to children under age 18. The Secretary shall prescribe rules for newborns, changes in custody, and mid-year moves to minimize gaps in payment.

(f) Inflation Indexing

The dollar amounts in subsection (a) shall be indexed annually to CPI-U, rounded as the Secretary prescribes.

(g) Identification

A qualifying child must have a valid Social Security Number or Individual Taxpayer Identification Number issued on or before the due date (including extensions) for the return for the taxable year. The taxpayer must have a valid TIN.

SECTION 4A. BIRTH SUPPORT PAYMENT

(a) Payment Established

  1. For each qualifying child born or legally adopted on or after the effective date of this Act, the Secretary shall pay a Birth Support Payment of $2,000 to the eligible parent or guardian of such child.

  2. In the case of multiple children from a single pregnancy or adoption proceeding, a separate Birth Support Payment shall be made for each qualifying child.

(b) Timing of Payment

  1. Post-Birth Payment. Upon verification of a qualifying birth or adoption, the Secretary shall issue the Birth Support Payment within 15 business days.

  2. Advance Payment Option. An eligible parent may apply for and receive the Birth Support Payment up to 60 days before the expected due date, upon submission of:

  3. Verification of gestational age of at least 20 weeks from a qualified healthcare provider; and

  4. Certification of the expected due date.

  5. Automatic Payment. When administrative systems permit, the Secretary shall issue Birth Support Payments automatically upon receipt of birth registration data from the Social Security Administration or state vital records offices, unless the eligible parent has opted out.

(c) Eligible Parent

  1. General Rule. The term "eligible parent" means an individual who:
  2. Is a citizen or national of the United States, or a qualified alien as defined in section 431 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1641);
  3. Resides in the United States; and

  4. Is the parent or legal guardian of the qualifying child.

  5. Adoptive Parents. Adoptive parents shall be eligible for the Birth Support Payment upon finalization of adoption of a child under age 1, or upon legal placement if finalization occurs within 12 months.

  6. Surrogacy Arrangements. In the case of a child born through a gestational surrogacy arrangement:

  7. The intended parent(s) named in a valid surrogacy agreement shall be eligible for the Birth Support Payment; and
  8. The gestational surrogate shall not be eligible unless the surrogacy arrangement is terminated and the surrogate retains parental rights.

(d) Multiple Eligible Parents

  1. Default Rule. Where multiple individuals qualify as eligible parents for the same child, the Birth Support Payment shall be made to the individual who:
  2. Has primary physical custody as evidenced by court order;
  3. The child primarily resides with, in the absence of a court order; or

  4. First submits a valid application, if neither of the above can be determined.

  5. Joint Custody. Where parents have a court order establishing shared physical custody, either parent may request that the payment be divided equally between both parents.

  6. Disputes. The Secretary shall establish procedures for resolving disputes regarding payment eligibility, including documentation requirements and timeline for resolution not to exceed 30 days.

(e) Application and Verification

  1. Application Process. The Secretary shall establish a simplified application process for the Birth Support Payment, which may be integrated with:
  2. The application for a Social Security number for the child;
  3. The non-filer portal established under Section 5(a);
  4. State birth registration systems; or

  5. Healthcare provider attestation systems.

  6. Required Information. An application shall include:

  7. Name and taxpayer identification number of the eligible parent;
  8. Verification of birth or expected due date;
  9. Contact information for any other known eligible parent; and

  10. Such other information as the Secretary determines necessary to prevent fraud.

  11. Verification of Gestational Age. For advance payments, the Secretary shall accept verification from any licensed physician, nurse-midwife, certified nurse practitioner, or physician assistant authorized to provide prenatal care in the state where services are provided.

(f) Effect of Fetal or Infant Loss

  1. In the case of stillbirth occurring after 20 weeks gestation, or the death of a qualifying child within 12 months of birth, the Birth Support Payment shall still be allowed to the eligible parent.

  2. An advance payment made prior to stillbirth or infant death shall not be subject to recapture.

  3. The Secretary shall implement these provisions with appropriate sensitivity and shall not require documentation beyond what is minimally necessary to verify eligibility.

(g) Inflation Adjustment

  1. Annual Adjustment. In the case of any calendar year beginning after the first full calendar year following enactment, the $2,000 amount in subsection (a) shall be increased by an amount equal to:
  2. Such dollar amount, multiplied by

  3. The cost-of-living adjustment determined under section 1(f)(3) of the Code for the calendar year, determined by substituting the year of enactment for "2016" in subparagraph (A)(ii) thereof.

  4. Rounding. If any increase determined under paragraph (1) is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50.

(h) Income Disregard

A Birth Support Payment made under this section shall not be taken into account:

  1. As income for purposes of the Internal Revenue Code of 1986;

  2. As income for purposes of determining the American Prosperity Stability Payment benefit under the American Prosperity and Stability Act (APSA);

  3. As income or resources for purposes of determining the eligibility of any individual for benefits or assistance, or the amount or extent of benefits or assistance, under any federal means-tested program (including SNAP, WIC, TANF, Medicaid, subsidized housing, SSI, and any other program defined by the Secretary); or

  4. As income or resources under any state or local program financed in whole or in part with federal funds, for a period of 12 months from receipt.

(i) Prohibition on Use of Information

Information submitted pursuant to this section may not be used for any purpose other than to determine eligibility for the Birth Support Payment, except as otherwise authorized by law for tax administration purposes.

(j) Fraud Prevention and Recovery

  1. Penalties. Section 7206 of the Code (fraud and false statements) shall apply to applications and claims under this section.

  2. Recovery of Improper Payments. The Secretary may recover Birth Support Payments made to ineligible individuals through:

  3. Offset against future tax refunds;
  4. Offset against future Birth Support Payments or child tax credits; or

  5. Other collection methods available under law.

  6. Safe Harbor. No recovery shall be made from an individual who received a Birth Support Payment in good faith based on reasonable belief of eligibility, where the overpayment resulted from:

  7. Administrative error by a government agency;
  8. Change in custody occurring after payment; or
  9. Other circumstances beyond the individual's control.

(k) Funding

Birth Support Payments under this section shall be paid from the Family Security Stabilization Account established under Section 7, subject to the funding provisions and graduated implementation rules of that section.

SECTION 5. ADMINISTRATION; ACCESS FOR NON-FILERS AND THE UN/UNDERBANKED

(a) Non-Filer Simplified Portal

The Secretary shall establish and maintain a web-based portal allowing non-filers and those with simple returns to claim the credit and Birth Support Payment by providing:

  1. Name, address, SSN/ITIN for taxpayer and qualifying children;
  2. Filing status;
  3. Rough household income estimate;
  4. Banking information or selection of payment method; and
  5. Attestation of accuracy under penalties of perjury.

The portal shall be multilingual, accessible (Section 508 compliant), and usable on mobile devices. Data shall be transmitted securely and stored in compliance with IRS privacy standards.

(b) Payment Methods for the Un/Underbanked

For taxpayers without bank accounts, the Secretary shall offer:

  1. Direct Express-style reloadable debit cards with no activation fees, low or no monthly fees, and broad ATM network access; and
  2. Check payments as a fallback, mailed to the address on file.

The Secretary may partner with FDIC-insured financial institutions or the Bureau of Fiscal Service to provide these services at competitive cost.

(c) Outreach and Enrollment

The Secretary, in coordination with HHS, USDA, and relevant agencies, shall:

  1. Conduct targeted outreach to non-filers, including those receiving SNAP, WIC, TANF, SSI, or Medicaid;
  2. Partner with community organizations, social service agencies, and Tribal governments;
  3. Provide multilingual materials and in-person assistance in underserved communities; and
  4. Use data-sharing agreements (where authorized) to pre-populate portals and reduce filing burdens.

(d) Identity Verification and Fraud Prevention

The Secretary shall implement identity verification protocols that balance fraud prevention with access, including:

  1. Remote identity proofing using knowledge-based authentication;
  2. Document upload for those who cannot pass automated checks;
  3. Manual review with clear appeal rights; and
  4. Post-payment audits using third-party data matching and risk scoring.

(e) Transparency and Reporting

The Secretary shall publish quarterly reports on:

  1. Total enrollments, payments, and reconciliation outcomes;
  2. Take-up rates by demographic group and geography;
  3. Overpayment and improper payment rates with root-cause analysis; and
  4. Average time-to-payment and portal usability metrics.

SECTION 6. COORDINATION WITH OTHER FEDERAL PROGRAMS

(a) American Prosperity and Stability Act (APSA) Coordination

The credit amount and Birth Support Payment shall not be treated as income for purposes of determining the American Prosperity Stability Payment benefit under the American Prosperity and Stability Act (APSA). The Secretary shall coordinate with the Secretary of Health and Human Services (or the agency administering APSA) to ensure credit payments and Birth Support Payments do not reduce Stability Payment amounts.

(b) Disregard for Means-Tested Programs

For purposes of determining eligibility or benefit amounts under any federal means-tested program (including SNAP, WIC, TANF, Medicaid, subsidized housing, SSI, and any other program defined by the Secretary), the credit payments and Birth Support Payments under this Act shall be disregarded as income and resources for a period of 12 months from receipt.

(c) State Coordination

States may establish supplementary child benefit programs that coordinate with this Act. The Secretary shall provide technical assistance and data-sharing agreements to facilitate state supplements while maintaining clear separation of federal and state funding streams.

SECTION 7. CHILD SECURITY CONTRIBUTION; FAMILY SECURITY STABILIZATION ACCOUNT

(a) Child Security Contribution Established

  1. General Rule. There is hereby imposed on every individual a Child Security Contribution equal to the sum of:
  2. (A) 1.50 percent of the taxpayer's adjusted gross income; plus

  3. (B) 3.00 percent of the taxpayer's adjusted gross income in excess of $500,000 ($1,000,000 in the case of a joint return).

  4. Collection. The Child Security Contribution shall be treated as an additional income tax for purposes of collection, and shall be reported on the taxpayer's annual return.

  5. Threshold Inflation Adjustment. The threshold amounts in paragraph (1)(B) shall be indexed annually to CPI-U, rounded to the nearest $10,000.

(b) Family Security Stabilization Account

  1. Establishment. There is established in the Treasury a separate account to be known as the "Family Security Stabilization Account" (the "Account").

  2. Deposits. All receipts from the Child Security Contribution imposed under subsection (a) shall be deposited into the Account.

  3. Use of Funds. Amounts in the Account shall be available only for:

  4. (A) Payment of the child tax credits authorized under Section 4;
  5. (B) Payment of Birth Support Payments authorized under Section 4A;
  6. (C) Administrative costs as provided in subsection (f).

(c) Surplus Management and Automatic Rate Adjustment

  1. Reserve Requirement. The Secretary shall maintain in the Account a reserve equal to at least three months of projected benefit outlays.

  2. Surplus Accumulation. Any receipts in excess of current-year benefit costs and reserve requirements shall remain in the Account to:

  3. (A) Absorb revenue shortfalls during economic downturns;
  4. (B) Accommodate increases in program participation; and

  5. (C) Provide a buffer against inflation before indexing adjustments take effect.

  6. Automatic Rate Adjustment.

  7. (A) Annual Assessment. On October 1 of each year, the Secretary shall calculate the Account's solvency ratio, defined as the Account balance plus projected receipts for the following fiscal year, divided by projected benefit outlays for the following fiscal year.
  8. (B) Adjustment Triggers.
    • (i) If the solvency ratio falls below 1.10 for two consecutive annual assessments, the base rate and kicker rate shall each increase by 0.05 percentage points, effective the following January 1.
    • (ii) If the solvency ratio exceeds 1.50 for two consecutive annual assessments, the base rate and kicker rate shall each decrease by 0.05 percentage points, effective the following January 1.
  9. (C) Adjustment Bounds. Automatic adjustments under this paragraph shall not:
    • (i) Reduce the base rate below 1.10 percent or the kicker rate below 2.20 percent; or
    • (ii) Increase the base rate above 1.90 percent or the kicker rate above 3.80 percent.

  10. (D) Rounding. All rate adjustments shall be rounded to the nearest 0.01 percentage point.

  11. Congressional Intervention for Extraordinary Circumstances.

  12. (A) If the solvency ratio falls below 0.90 or exceeds 2.00 for two consecutive annual assessments, the Secretary shall transmit a report to Congress within 60 days identifying the cause and recommending legislative action.
  13. (B) If automatic adjustments reach the bounds specified in paragraph (3)(C) and the solvency ratio remains outside the 1.10-1.50 range for three consecutive annual assessments, the Secretary shall transmit a report to Congress within 60 days recommending adjustment to the bounds or other legislative remedies.

  14. (C) Nothing in this subsection shall preclude Congress from adjusting rates, thresholds, or other parameters by subsequent legislation at any time.

  15. Transparency. The Secretary shall publish the solvency ratio calculation and any pending automatic adjustments no later than November 1 of each year, providing taxpayers at least 60 days notice before any rate change takes effect.

(d) Graduated Implementation During Funding Constraints

  1. Full Implementation When Adequately Funded. When the Account balance and projected receipts are sufficient to provide 100 percent of authorized benefits for the upcoming fiscal year, the Secretary shall provide full benefits as specified in Sections 4 and 4A.

  2. Graduated Benefits During Shortfalls. If projected funding is insufficient for full benefits:

  3. (A) The Secretary may implement graduated benefits, providing a uniform percentage of authorized amounts to all eligible recipients, but in no case less than 50 percent of authorized amounts.
  4. (B) The Secretary shall provide at least 90 days advance notice to Congress and the public before implementing graduated benefits.
  5. (C) Priority shall be given to maintaining monthly payment regularity over benefit amount.

  6. (D) Birth Support Payments shall be maintained at 100 percent of authorized amounts unless funding falls below levels necessary for 75 percent of child tax credit amounts.

  7. Automatic Restoration. When funding becomes sufficient, the Secretary shall automatically restore full benefits, with retroactive payments for any shortfalls occurring in the prior 12 months.

(e) Strict Separation from APSA

No funds from the American Prosperity Contribution established under the American Prosperity and Stability Act (APSA) shall be transferred to the Family Security Stabilization Account, and vice versa. The two accounts shall maintain complete fiscal independence.

(f) Administrative Costs

Reasonable administrative costs incurred by the Secretary in implementing this Act shall be paid from the Account, but shall not exceed 2 percent of total annual outlays.

(g) Fiscal Responsibility and Transparency

  1. The Secretary shall publish quarterly reports on:
  2. (A) Total deposits to the Account from Child Security Contributions;
  3. (B) Total outlays for benefits and administration, separately reporting child tax credit costs and Birth Support Payment costs;
  4. (C) Account balance and reserve status;
  5. (D) Solvency ratio and any pending rate adjustments;

  6. (E) Any benefit adjustments made under subsection (d).

  7. The Congressional Budget Office shall include the Account in its annual budget baseline projections.

  8. If graduated implementation under subsection (d) continues for more than 24 consecutive months, the Comptroller General shall conduct a comprehensive review of the Child Security Contribution rates and recommend legislative solutions.

SECTION 8. STATE PARTNERSHIPS; ADMIN GRANTS

(a) State Top-On Option

A state may enact a refundable state child tax credit or birth support payment that piggybacks on federal eligibility. The Secretary shall provide data-sharing agreements and optional administration for states on a cost-reimbursement basis.

(b) Grants

There are authorized to be appropriated $250,000,000 annually for five years for state outreach and enrollment grants, prioritizing non-filers and rural/underbanked communities.

SECTION 9. RULEMAKING; IMPLEMENTATION TIMELINE

(a) Rulemaking

Within 180 days of enactment, the Secretary shall issue interim final regulations to implement this Act, including regulations governing Birth Support Payments under Section 4A and the Child Security Contribution under Section 7.

(b) Initial Payment Schedule

  1. Monthly advance child tax credit payments shall commence no later than July 1 of the first calendar year beginning after enactment, with transition rules to allow mid-year commencement.

  2. Birth Support Payments shall commence no later than January 1 of the first calendar year beginning after enactment.

  3. The Child Security Contribution shall take effect for taxable years beginning after December 31 of the year of enactment.

(c) Coordination With Filing Season

The Secretary shall provide clear reconciliation procedures, including electronic pre-populated forms to reduce filing burdens.

SECTION 10. REPORTS AND EVALUATION

(a) Annual Report

The Secretary, in consultation with HHS and Census, shall submit an annual public report to Congress on child poverty, food insufficiency, take-up (separately reporting child tax credit and Birth Support Payment utilization), payment integrity, and Child Security Contribution revenues.

(b) GAO Review

Every three years, the Comptroller General shall report to Congress on program efficacy, integrity, administrative burden, and the performance of the automatic rate adjustment mechanism, with recommendations.

SECTION 11. EFFECTIVE DATE; NO SUNSET; SEVERABILITY

(a) Effective Date

The amendments made by this Act apply to taxable years beginning after December 31 of the year of enactment. Birth Support Payments under Section 4A shall be available for qualifying children born or adopted on or after January 1 of the calendar year following enactment. The Child Security Contribution under Section 7 shall apply to taxable years beginning after December 31 of the year of enactment.

(b) No Sunset

This Act and the amendments made by it shall remain in effect permanently unless repealed by subsequent Act of Congress.

(c) Severability

If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the remainder of this Act and its application to other persons or circumstances shall not be affected.

SECTION-BY-SECTION SUMMARY

Section 1: Short Title. Names the Act as the Secure Our Children Act (SOCA).

Section 2: Findings/Purposes. States the empirical and normative case for family economic security, including research on birth-period income vulnerability; establishes the shared contribution principle; recognizes that children do not choose their parents or economic circumstances; positions SOCA as complementary to the American Shared Prosperity Compact.

Section 3: Definitions. Harmonizes key terms; adds definitions for Birth Support Payment, gestational parent, expected due date, Child Security Contribution, and solvency ratio.

Section 4: Amendments to Section 24. Sets child-age-based amounts ($3,600 under 6; $3,000 ages 6-17), makes fully refundable, restores age-17 eligibility, establishes monthly advance with safe harbor, provides inflation indexing. No phase-out -- every qualifying child receives the full credit regardless of parental income.

Section 4A: Birth Support Payment. Establishes $2,000 one-time payment upon birth or adoption; allows advance payment up to 60 days before due date; covers adoptive parents and surrogacy arrangements; includes income disregard for APSA and means-tested programs; provides safe harbor for fetal/infant loss; indexed to inflation.

Section 5: Administration. Non-filer portal (updated to include Birth Support Payment access), payment rails for un/underbanked, outreach, identity/fraud controls, transparency.

Section 6: Coordination. Disregards for APSA Stability Payments and federal means-tested programs to prevent clawbacks; applies to both child tax credit and Birth Support Payment.

Section 7: Child Security Contribution and Funding. Establishes the Child Security Contribution (1.50% on all AGI plus 3.00% on AGI above $500k/$1M joint). Creates Family Security Stabilization Account. Implements automatic rate adjustment mechanism with solvency triggers (increase rates if ratio below 1.10; decrease if above 1.50) and bounds (base rate 1.10%-1.90%; kicker rate 2.20%-3.80%). Congressional intervention required only for extraordinary circumstances (ratio below 0.90 or above 2.00). Includes graduated implementation provisions with Birth Support Payment protection priority. Maintains strict separation from APSA funds.

Section 8: State Partnerships. Enables state top-ons for both child tax credit and birth support payments; provides admin grants.

Section 9: Rulemaking/Timeline. 180-day regs; child tax credit payments by July 1 following enactment; Birth Support Payments by January 1 following enactment; Child Security Contribution effective for taxable years after enactment; reconciliation simplifications.

Section 10: Reports/Evaluation. Annual outcome reporting (separately tracking child tax credit, Birth Support Payment, and Child Security Contribution revenues); GAO triennial audits including review of automatic rate adjustment performance.

Section 11: Effective/No Sunset/Severability. Permanent, immediate applicability; specifies Birth Support Payment and Child Security Contribution effective dates.

OUTSTANDING QUESTIONS & ITEMS FOR CLARIFICATION

Note to drafters: Resolve items in this section via committee report language or targeted statutory edits before mark-up to reduce ambiguity and implementation risk.

A. Fiscal Design & Contribution Mechanics

  1. ~~Rate Calibration: Are the 0.55% base rate and 1.10% kicker rate appropriately calibrated to generate sufficient revenue with surplus cushion? Request JCT/CBO dynamic scoring.~~ RESOLVED in Rev 2.3/2.4: Rates recalibrated to 1.50% base and 3.00% kicker based on cost modeling. Phase-out elimination in Rev 2.4 increased costs from ~$217B to ~$257B. Current rates generate approximately $270B, providing full funding with ~5% surplus for reserves.

  2. Kicker Threshold: Is $500,000 (single) / $1,000,000 (joint) the appropriate threshold for the higher rate? Consider alignment with other tax provisions.

  3. Solvency Ratio Targets: Are the 1.10-1.50 healthy range and 0.90-2.00 extraordinary bounds appropriately set? Consider modeling recession scenarios.

  4. Adjustment Increment: Is 0.05 percentage points the appropriate increment for automatic adjustments? Consider whether larger increments would restore solvency faster during stress.

  5. ~~Adjustment Bounds: Are the rate floors (0.40%/0.80%) and ceilings (0.70%/1.40%) appropriately set to allow meaningful self-correction while preventing extreme rates?~~ RESOLVED in Rev 2.3/2.4: Bounds updated proportionally to 1.10%-1.90% (base) and 2.20%-3.80% (kicker), maintaining approximately 25% adjustment range in either direction.

  6. Two-Year Trigger: Is requiring two consecutive years outside the solvency range appropriate, or should single-year triggers apply during severe downturns?

  7. Score Sensitivities: Direction to JCT/CBO on assumed take-up, demographic changes, and behavioral responses; require dynamic scoring appendix.

  8. Sequestration/Paygo: Exemptions or special treatment to avoid across-the-board cuts during sequestration events.

B. Eligibility, Identification & Family Status

  1. SSN vs. ITIN Policy: Restrict to SSN for children (current practice) or allow ITIN to maximize inclusion? Political and administrative trade-offs.

  2. Residency & Abroad: Clarify eligibility for children who spend part of the year abroad; define U.S. residency tests and documentation.

  3. Mixed-Status Households: Treatment where parent(s) or child have differing identification status.

  4. Custody & Care Transitions: Mid-year changes (divorce, foster/kinship care, reunification, adoption); documentation standards and dispute resolution timeline.

  5. Newborns & In-Year Additions: Automatic enrollment pathways (SSA birth records) vs. portal self-report; retroactivity rules.

  6. Incarceration & Institutionalization: Eligibility and payee designation.

  7. Child Support Interactions: Whether CTC is subject to offset/garnishment for child support arrears; policy intent and exceptions (e.g., domestic violence survivors).

C. Benefit Structure

  1. Safe Harbor Calibration: $2,000/child sufficient? Consider adjusting based on administrative data from reconciliation.

  2. Age Cutoffs: Clarify eligibility through the month of the 18th birthday vs. end of tax year.

D. Administration, Delivery & Integrity

  1. Non-Filer Portal Authority: Specify data elements, attestation, e-signature, multilingual access, accessibility standards, and audit trail requirements.

  2. Identity Verification: Balance fraud prevention with access (document lists, remote ID, knowledge-based checks); appeal path for false negatives.

  3. Payment Methods: Cost ceilings and consumer protections for reloadable cards; ATM network standards; fee prohibitions.

  4. Overpayment Reconciliation: Define "good-faith" criteria; preparer error safe harbors; installment plan parameters and interest/penalties policy.

  5. Data Sharing & Privacy: Statutory safeguards for inter-agency data use; retention limits; breach notification; minimization mandates.

  6. Language & Disability Access: Minimum standards (Section 508, CLAS, plain-language requirements); funded outreach deliverables.

  7. IRS Capacity & Resourcing: Dedicated appropriations/FTEs; IT modernization timelines; contingency planning for surge volumes.

  8. Territories & Tribal Nations: Coordinating agreements for Puerto Rico and other territories; Tribal administration options.

E. Program Interactions

  1. Means-Tested Program Disregards: Full disregard vs. partial (e.g., first $2,000/child) to balance anti-poverty aims with program integrity and budget coordination.

  2. EITC Interaction: Modeling of combined cliffs/rates; statutory guardrails to prevent effective marginal tax spikes.

  3. APSA Coordination: Explicit cross-references to APSA regulations; conflict-of-law rule if agencies diverge.

  4. State "Top-On" Mechanics: Standardized data-sharing templates; federal admin services menu and cost allocation; reporting cadence.

  1. Offsets & Collections: Limits on Treasury Offset Program for CTC advances; hierarchy of debts; hardship waivers.

  2. Fraud vs. Error Distinctions: Penalty gradations; de minimis thresholds; voluntary disclosure programs.

  3. Administrative Review: Timelines for reconsideration/appeals; rights to representation; independent office vs. IRS unit.

  4. Rulemaking Scope: Clarify delegated authorities and reporting to Congress on major rules.

G. Monitoring, Evaluation & Transparency

  1. Outcome Metrics: Statutorily require measures on child poverty, food insufficiency, housing stability, school attendance, and maternal/infant health.

  2. Improper Payment Targets: Set benchmark and continuous-improvement targets; publish rates by cause category.

  3. Public Dashboards: Real-time uptake and payment stats by state/county; privacy-preserving.

  4. Independent Research Access: Anonymized microdata access for qualified researchers with strict privacy controls.

H. Implementation Timeline & Contingencies

  1. Go-Live Date Feasibility: Confirm practicality of July 1 start for child tax credit and January 1 start for Birth Support Payment; allow phased rollout by risk tier.

  2. Continuity During Shutdowns/Disasters: Exemptions to operate during appropriations lapses; disaster-area payment rules.

  3. Sunset Protections: Anti-sunset clause robustness; treatment under future reconciliation bills.

I. Birth Support Payment Design

  1. Payment Amount Calibration. Is $2,000 the appropriate amount? Should it vary by region (cost-of-living adjustment) or household circumstances?

  2. Advance Payment Gestational Threshold. Is 20 weeks the appropriate threshold for advance payment eligibility? Balance between early access and fraud prevention.

  3. Automatic vs. Application-Based. Should automatic payment be the default (opt-out) or should application remain required (opt-in)? Trade-offs between take-up rates and fraud risk.

  4. Adoption Age Limit. Is under-1 appropriate for adoption eligibility, or should older child adoptions (e.g., under 5) also qualify given the household adjustment costs?

  5. Surrogacy Documentation. What documentation standards are appropriate for surrogacy arrangements? State law varies significantly.

  6. Healthcare Provider Scope. Is the list of qualified providers for gestational verification appropriate? Should doulas or community health workers be included in underserved areas?

  7. Stillbirth/Loss Provisions. Is 20 weeks the appropriate gestational threshold for stillbirth eligibility? Should miscarriage at earlier stages qualify for partial payment?

  8. Interaction with State Programs. Several states have baby bonus programs. Coordination mechanisms and non-duplication rules.

  9. Twins/Multiples. Confirm that separate payments for each child is the intended policy for multiple births.

  10. Foster Care Placements. Should foster parents receiving a newborn placement qualify for Birth Support Payment? Policy intent and fraud concerns.

NOTES TO DRAFTERS

Universal Child Benefit Philosophy (Rev 2.4): The elimination of the income phase-out reflects a fundamental design principle: the credit is for the child, not the parent. Children do not choose their parents or their family's economic circumstances. Support for children should not be conditioned on parental income level. This aligns SOCA with the design philosophy of Rep. Tlaib's End Child Poverty Act while maintaining SOCA's superior dedicated funding architecture.

Progressivity Through Contribution, Not Benefit Restriction: The Child Security Contribution handles progressivity entirely on the revenue side. A household earning $1,000,000 (joint) contributes $15,000 (1.50% of $1M) while receiving $6,000 for two children -- a net contribution of $9,000. A household earning $2,000,000 (joint) contributes $60,000 ($30,000 base + $30,000 kicker on $1M excess) while receiving $6,000 -- a net contribution of $54,000. There is no need for the benefit side to do double duty through phase-outs that add complexity and create marriage penalty calculations.

Child Security Contribution Design: The 1.50% base rate plus 3.00% kicker structure balances universal participation ("everyone pays") with progressivity (higher earners contribute more). The rates are calibrated to generate approximately $270 billion annually against program costs of approximately $257 billion, providing adequate funding plus reserves for the Family Security Stabilization Account. The automatic adjustment mechanism is designed to maintain solvency without routine Congressional intervention, following the Social Security model of shared contribution for shared benefit.

Rate Calibration (Rev 2.4): The original rates (0.55% base, 1.10% kicker) were found to generate only approximately 46% of required funding. Rev 2.3 increased rates to 1.25%/2.50%. Rev 2.4's elimination of the phase-out expanded coverage to all children regardless of parental income, adding approximately $40B in costs. The current rates (1.50%/3.00%) generate approximately $270B against $257B in costs, providing full funding with ~5% surplus. Effective rates remain modest: 1.50% for most families, rising to 4.50% for a household earning $1 million.

Automatic Adjustment Philosophy: The two-year trigger prevents overreaction to single-year fluctuations while allowing timely response to sustained funding imbalances. The bounds (1.10%-1.90% base; 2.20%-3.80% kicker) allow approximately 25% adjustment in either direction before requiring Congressional action.

SSN vs ITIN: The bill allows either for child identification to maximize inclusion; replace with SSN-only if political calculus demands.

Safe Harbor Dollar Value: Set at $2,000/child for child tax credit overpayments; can be tuned upward/downward based on JCT scoring.

Graduated Implementation: The 50% minimum benefit floor during funding constraints prevents the Act from becoming inoperative while maintaining eligibility. Birth Support Payments receive priority protection given their one-time nature and timing sensitivity.

Program Disregards: Full disregards for means-tested programs maximize anti-poverty impact; a partial disregard could be substituted if coordination constraints arise.

Relationship to ASPC: SOCA is positioned as a component of the American Shared Prosperity Compact, alongside APSA and APNA. This framing enables integrated implementation while maintaining independent viability of each act.

Birth Support Payment Naming: "Birth Support Payment" chosen over "Baby Bonus" to avoid diminutive language, emphasize the support function, and align with SOCA's security/support terminology.

Fetal Loss Provisions: Drafted with intentional sensitivity. Families experiencing stillbirth or infant death should not face additional bureaucratic burden. The "minimally necessary documentation" standard prevents intrusive verification requirements during grief.

Separation from APSA: The Child Security Contribution and American Prosperity Contribution are maintained as entirely separate funding streams to preserve the fiscal integrity and political durability of both programs.

Revision History

Revision 2.5 (Current) - Brought into compliance with APAI Document Production Standards Rev 1.6 - Removed acronym from H1 title - Moved Revision History from top to bottom - Removed "Prepared by" block and "Draft -- Working Document" from header - Replaced end-of-document marker with standard footer

Revision 2.4 - Eliminated income-based phase-out (former Section 4(e)) - Rationale: The credit is for the child, not the parent. Children do not choose their family's income level. Progressivity is handled entirely through the Child Security Contribution's rate structure, making high-income families substantial net contributors regardless of benefits received. This aligns SOCA with the design philosophy of Rep. Tlaib's End Child Poverty Act (truly universal) while maintaining SOCA's superior funding architecture. - Recalibrated Child Security Contribution rates to fund expanded universal coverage - Base rate increased from 1.25% to 1.50% of AGI - Kicker rate increased from 2.50% to 3.00% on AGI above $500k/$1M - Updated automatic adjustment bounds proportionally (base: 1.10%-1.90%; kicker: 2.20%-3.80%) - Rationale: Phase-out elimination adds approximately $40B in costs (from ~$217B to ~$257B). Revised rates generate approximately $270B, providing full funding plus ~5% surplus for the Family Security Stabilization Account. - Simplified safe harbor provision (removed income-based phase-out of waiver) - Simplified inflation indexing (no thresholds to index) - Simplified MAGI definition (no longer needed for phase-out administration) - Renumbered Section 4 subsections - Updated Section-by-Section Summary - Updated Outstanding Questions (removed phase-out calibration items) - Updated Notes to Drafters

Revision 2.3 - Recalibrated Child Security Contribution rates to achieve full program funding - Base rate increased from 0.55% to 1.25% of AGI - Kicker rate increased from 1.10% to 2.50% on AGI above $500k/$1M - Updated automatic adjustment bounds proportionally (base: 0.90%-1.60%; kicker: 1.80%-3.20%) - Rationale: Original rates generated approximately $99B against $217B in program costs (46% funded). Revised rates generate approximately $225B, providing full funding plus reserves for the Family Security Stabilization Account. - Updated Section-by-Section Summary to reflect new rates - Resolved Outstanding Questions A.1 and A.5 regarding rate calibration - Updated Notes to Drafters

Revision 2.2 - Replaced FIT Act / general revenue funding architecture with Child Security Contribution - Established universal income-based contribution (0.55% base rate + 1.10% above $500k) - Added automatic rate adjustment mechanism with solvency triggers and bounds - Updated Section 2 Findings/Purposes to reflect shared contribution philosophy - Updated Section 3 Definitions to include Child Security Contribution and solvency ratio - Revised Section 7 entirely to implement new funding structure - Updated all APDA references to APSA (American Prosperity and Stability Act) - Removed FIT Act, NLVT, and alternative funding source references - Updated Section-by-Section Summary - Updated Outstanding Questions and Notes to Drafters

Revision 2.1 - Added Section 4A: Birth Support Payment ($2,000 one-time payment at birth/adoption) - Updated Section 2 Findings to include birth-period economic vulnerability research - Updated Section 2 Purposes to include birth support objective - Updated Section 3 Definitions to include birth support terminology - Updated Section 7 funding provisions to include birth support costs - Added birth support items to Outstanding Questions section - Updated attribution to American Policy Architecture Institute - Fixed encoding artifacts throughout document

Revision 2.0 - Renamed from "American Family Security Act (AFSA)" to "Secure Our Children Act (SOCA)" - Previously renamed from "Child Tax Credit 2.0 Act" in Revision 2.0 - Reconceptualized as progressive enhancement to American Shared Prosperity Compact - Restructured Section 7 funding mechanism to eliminate tight coupling with FIT Act - Added conditional funding pathways - Implemented modular architecture with loose coupling design principles - Added graduated implementation provisions for funding constraints - Positioned as optional supercharger for ASPC rather than dependent policy

Revision 1.0 - Initial legislative draft - Establishes permanent, fully refundable child tax credit - Creates monthly advance payment system - Coordinates with APSA to prevent benefit clawbacks - Includes safe harbor provisions for overpayment reconciliation

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Prepared by Albert Ramos for The American Policy Architecture Institute