A group of House Democrats have introduced a bill to permanently expand the child tax credit and want to see it as part of President Joe Biden’s recovery plan, a new marker that could complicate the passage of the bill.
The push over the child tax credit is the latest in a high stakes negotiation over the President’s bill and is just the most recent example of a place where the White House and Democrats on Capitol Hill may not be in the same place on just how big the President’s recovery plan should be.
Biden told lawmakers with the Congressional Hispanic Caucus in an Oval Office meeting last week he wanted to try to make the child tax credit permanent, but discussed the challenges that the expansion could face in the Senate, a source familiar with the discussion told CNN.
Democrats passed a one-year expansion of the child tax credit as part of their $1.9 trillion relief bill in March. The benefit, which will start going to families in July, provides up to $3,600 per child for 2021 depending on the age of each child.
Families with children under the age of 6 will receive $3,600 per child, while those with kids between the ages of 6 and 17 will receive $3,000 for each child annually. That’s up from a maximum of $2,000 per child under age 17. The enhanced portion of the credit is available for single parents with annual incomes up to $75,000, heads of households earning up to $112,500 and joint filers making up to $150,000 a year.
Parents can expect to receive half the credit on a monthly basis between July and December and the rest when they file their 2021 tax returns. The credit will also be fully refundable for 2021 so more low-income households can take advantage of it. Researchers have found the benefit could reduce child poverty by nearly half — a statistic Biden repeatedly cited when advocating for the relief bill
Some Democrats argue they want to see a provision become permanent, but Biden’s second recovery proposal, also known as the “American Families Plan,” is expected to contain a measure that would just extend the child tax credit until 2025.
Appropriations Chairwoman Rosa DeLauro, a Connecticut Democrat who first began advocating for similar legislation in 2003, said she wants to work toward a solution with the White House.
“I believe it is for me it is the most transformative economic endeavor that we could be engaged in,” DeLauro told CNN.
The one-year enhancement of the child tax credit is projected to cost $110 billion, according to the Committee for a Responsible Federal Budget. Making that permanent is estimated to cost north of $1 trillion over a decade.
Democratic Rep. Suzan DelBene of Washington, who serves on the Ways and Means committee, said she emphasized the issue during a meeting at the White House last week with Biden’s chief of staff Ron Klain.
“I think the expansion in the American Rescue Plan was so important, but we’re not going to lift children out of poverty in just a year, which is why it’s important that we have policy that helps families out for the long run,” she told CNN.
Until now, the credit has only been partially refundable — leaving more than 20 million children unable to get the full credit because their families’ incomes are too low.
Lawmakers also wanted to make it easier for parents to use the funds to cover their expenses during the year, leading them to convert half the credit to monthly payments of up to $300, depending on the age of the child.
White House press secretary Jen Psaki said during Friday’s press briefing the administration is figuring out how to pay for the policy.
“We think this child tax credit is valuable. It is a huge — it has a huge impact on … reducing the level of poverty in our country. It helps women get back into the workforce,” Psaki said. “What we’re determining is what we can do … And so, we have to figure out how to pay for it and there’s — this is all a part of the discussion.”
House Ways and Means Committee Chairman Richard Neal, a Massachusetts Democrat who has also been working on the issue, told CNN on Friday that discussions are ongoing with the White House.
“The President took on a bit of a different position. We are trying to figure it out,” Neal told CNN. “What that means, I am not quite sure yet. They are open to us finding the revenue. We will have to wait and see.”