Panel Urges $1,000 Tax Credit for Each Child : Families: National commission issues report. It calls for health insurance for youngsters, pregnant women.

A bipartisan national commission issued a comprehensive blueprint Monday for improving the condition of the nation’s children, including a $56-billion first-year package of recommendations designed to strengthen American families so parents can better care for their offspring.

The panel’s centerpiece proposal is a $1,000-per-child tax credit for all families with children under age 18, regardless of income. It is the most expensive part of the package, with an estimated cost of $40 billion in its first year.

“For millions of American children and families, the hour is already late,” said Sen. John D. (Jay) Rockefeller IV (D-W.Va.), chairman of the National Commission on Children. “But if the Persian Gulf experience taught us anything, it’s that a unified nation can accomplish great things.”

In touting the tax credit plan, Rockefeller said: “This is not a report about poor families and poor children. This is a report about all children and all families. This is about middle-class working America just as much as it is about any other part.”

Unlike the current $2,150 exemption for dependents, which reduces the amount of income subject to taxation, the tax credit would be a dollar-for-dollar reduction in taxes.

The commission report was remarkable for achieving widespread unanimity for its overall objectives, despite the ideological diversity of the panel’s 34 members. The panel, whose members were appointed by Congress and the White House, was chaired by a political liberal widely believed to have White House aspirations and included a number of conservatives named to it by the Bush Administration.

“There are many, many things in this report I wholeheartedly endorse,” said Wade F. Horn, a Bush appointee to the commission who directs children, youth and family programs for the Department of Health and Human Services. For example, he said: “The report makes a very clear endorsement of two-parent families as the best environment to raise a child.”

Presidential spokesman Marlin Fitzwater said Monday “there are many good things in” the report and that the Administration will use it “to help us make judgments about child programs.”

But Fitzwater warned that because of the federal budget crunch, “big ticket” items “for any purpose” will have “a very tough time” being enacted.

The one proposal that caused significant dissent among panel members was the report’s recommendation for universal health insurance coverage for all children and pregnant women that would be provided jointly by the federal government and employers.

The proposal called for a payroll tax on employers to finance the new public insurance program.

Also, the report recommended that employers be required to provide health insurance to pregnant employees and non-working spouses and their dependent children, either by purchasing the coverage or by contributing to a government program that would insure their workers. The proposal called for a tax subsidy--the details to be worked out later--to offset the small employer’s share of the cost of premiums.

Nine of the panel’s commissioners--including Horn--declared their opposition to the health proposal, saying they believed it would be inflationary “and would actually lead to a decrease in the quality of health care in America.”

Moreover, they said, despite the tax subsidy, requiring employers to provide coverage “would still have a dramatic impact on small businesses and would likely lead to a substantial number of people losing their jobs.”

The report also called for:

* Tougher child support enforcement, including a pilot program that would provide a government-insured benefit when child support cannot be collected.

* Making the Head Start program available to all income-eligible children.

* More “family oriented” policies and practices on the part of the federal government and private sector employers, including family and medical leave policies and flexible work scheduling alternatives.

* Major reform of the welfare system to direct more energy and resources toward helping troubled parents and children overcome their problems, “and therefore to avoid the need to place children in protective custody.”

The commission defended the high price tag of its proposals, saying the investment would save money in the long term.

“It’s not easy to call for more government spending in the face of a looming federal deficit,” Rockefeller said. “But we have to face reality. In the end, Americans are going to pay one way or the other. There are no cheap, quick or easy fixes. I’ll take prenatal care over intensive care any day.”

The panel said its proposals should be financed largely by a combination of new taxes and reallocation of current federal spending from other areas. To compensate partly for the $40 billion in revenue the tax credit would cost, the report recommends elimination of the personal exemption for dependent children, which currently costs $24 billion.

The report was widely praised by lawmakers and children’s health groups, and attacked by the conservative Heritage Foundation, which said the tax credit “could easily double the teen illegitimate birth rate and greatly increase the number of single mothers.”

The foundation also accused Rockefeller of using the commission “as a vehicle to advance his expensive and discredited national health scheme which has prompted several commissioners to dissent. . . . “

But Robert H. Sweeney, president of the National Assn. of Children’s Hospitals and Related Institutions, said: “The surprise . . . is not that there is a dissenting document on child health, but rather that there is a consensus document on children. In everything but (the health insurance) arena, people from across the political spectrum were able to craft a . . . program that would transform the lives of children.”

Sen. Albert Gore Jr. (D-Tenn.), who, with Rep. Thomas J. Downey (D-N.Y.), has introduced a tax relief package for working families--which includes an $800-per-child tax credit--applauded the panel’s recommendations.

“Middle-income and working families with children are facing severe financial pressures and too often it’s the children who are shortchanged,” Gore said. “It’s time we helped these families and these children.”

A Plan to Help Children

The National Commission on Children recommended giving parents a $1,000 tax credit for each child as one in a series of steps to ensure children have financial security and access to health care and education. Overall, the package would cost the government $52-$56 billion in the first year. Other proposed steps include:

* Spending between $7 to $8 billion to extend health coverage to uninsured pregnant women and children.

* Testing a plan to guarantee single parents a government-paid benefit if absent spouses fail to pay child support obligations.

* Making the Head Start program for low-income children available to all eligible 3-, 4- and 5-year-olds.

* Encouraging states to offer choice in picking public schools for their children.

* Recommending employers give workers job-protected leave for childbirth, adoptions and family emergencies.

* Putting more emphasis on helping families stay together and less reliance on foster care when troubles arise.