Democrats roll out a plan to provide up to $300 monthly checks to parents with kids 17 and under

• House Democrats unveiled legislation on Monday to set up a new program to send checks to families for a year.

• Payments would be up to $300 monthly depending on the child's age.

• Biden has expressed support for the child benefits plan, which could form a key part of his relief package.

• Visit the Business section of Insider for more stories.

Congressional Democrats unveiled legislation to provide up to $300 in monthly cash benefits for each American child on Monday, a measure they want to make a critical part President Joe Biden's federal $1.9 trillion rescue package. It's part of an effort to significantly cut the number of children living in poverty.

The plan, known as the American Family Act, would provide $3,600 over the year to parents with children age five and under. It would distribute $3,000 to parents with kids between the ages of six and 17. Democrats would establish it as a one-year emergency federal program, but will likely press for its permanent extension later this year.

Reps. Rosa DeLauro of New Jersey, Suzan DelBene of Washington, and Ritchie Torres of New York sponsored the legislation. They are working alongside Rep. Richard Neal of Massachusetts, chair of the House Ways and Means Committee. DeLauro leads the House Appropriations Committee.

The initiative would be set up as monthly benefit program that's managed by the IRS in a bid to ease the high cost of childcare and assist families struggling with lost income during the pandemic. Millions of households would qualify, including those with no income tax obligations.

"Nobody pays their bills once a year, you pay your bills each month," Delauro said at a virtual news briefing on the plan. "The design makes more sense and helps families make ends meet through difficult months."

The Washington Post reported the payments would start phasing out for individuals earning $75,000 and below and couples making $150,000 and below in a separate plan set to be introduced by Neal on Monday.

That's a lower income threshold than the $130,000 for single-filers and $180,000 for joint-filers in the proposal put forward by the three House Democrats.

"Through the legislative process, this will be worked out," DeLauro said in response to a question from Insider at the news briefing. "We anticipate that those technicalities will be sorted out in the course of debate and discussion."

Currently, families can claim a $2,000 tax credit for kids 17 and under, an amount last boosted under the 2017 Republican tax law. It is paid annually in a lump sum after people file their taxes, and not every month.

Around one-third of the lowest-income households don't receive the whole credit because their tax bill is lower than $2,000, meaning it is not "fully refundable." Their payments are capped at $1,400.

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The plan gained momentum over the past several years as more Democrats threw their support behind it. Biden incorporated it into his campaign platform, and made it part of the administration's relief proposal.

Researchers at Columbia University projected it could cut the child poverty rate in half, and lift millions of Black and Latino children out of poverty. The Democratic legislation also comes less than a week after Republican Sen. Mitt Romney of Utah released another child benefit plan that would provide even bigger cash payments to families.

The rollout imparted bipartisan support onto the Democratic drive. However, Sens. Mike Lee of Utah and Marco Rubio of Florida, supporters of bolstering the child tax credit, quickly lambasted the Romney plan as a form of "welfare assistance." It's a sign that monthly cash payments to families may have limited appeal among conservatives.

"The statement from Mike Lee and Marco Rubio was so strongly worded, I think it surprised a lot of people," Patrick Brown, a former GOP aide in the Senate and tax expert, said in an interview. "The fact they were not onboard from the get-go probably doesn't speak well to its prospects on the Republican side."

Brown said he believes there is "appetite for more discussions" among Republicans on widening access to the child tax credit so it reaches more of the poorest families. Lee and Rubio supported a plan in the past to allow families paying payroll taxes instead of income taxes to claim the credit as well, a move designed to encourage employment.

Yet the competing approaches between Democrats and the GOP to helping low-income families could set up a major fight over one of the biggest changes to the nation's social safety net in decades this year.

Some conservative economists argue that government payments could disincentivize work among the lowest-income Americans. Other policy experts warn that it may be administratively difficult to pull off.

The Biden administration indicated its support for the plan on Monday. White House press secretary Jen Psaki said at a press conference the plan was an "essential priority" within the package.

Meanwhile, Congressional Democrats are arranging a swift timetable to enact Biden's relief package by early March using reconciliation. It's a legislative maneuver allowing for the approval of a bill with a simple majority of 51 votes instead of the 60 generally required in the Senate.

The Biden plan includes $1,400 stimulus checks, $400 federal unemployment benefits through September, and assistance to state and local governments, among other provisions. Republicans are staunchly opposed to its level of spending.

Committees in the House are set to start drafting legislation for the Biden plan over the next two weeks with the aim of a floor vote during the week of February 22. Then, it would go to the Senate for a separate vote and eventually Biden's desk for his signature.

On Friday, the president indicated his strongest support yet for moving ahead without Republican votes. Still, Democrats remain divided on certain issues such as the income thresholds for a third wave of stimulus checks.

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