January 16, 2024 12:59 PM UTC

Bipartisan Deal to Expand Child Tax Credit Probably DOA Because of House Republicans

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• by: Colorado Pols

The Expanded Child Tax Credit (ECTC) has long been one of Colorado Sen. Michael Bennet’s signature issues. The program was actually implemented for a brief period of time and proved to be incredibly successful. Nationwide, the child poverty rate more than DOUBLED less than a year after the CTC expired at the end of 2021.

As Kayla Guo reports for The New York Times, bipartisan attempts to resuscitate the ECTC are bearing some fruit in Congress, but with one major caveat: Nobody believes that the hopelessly divided House Republican caucus can actually pass anything in 2024. From The Times:

Top Democrats and Republicans in Congress on Tuesday released a $78 billion compromise they have reached to expand the child tax credit and restore three popular expired business tax breaks, but the package faces a challenging road to enactment in an election year.

The plan includes $33 billion to partly extend a major expansion of the child tax credit that was initially beefed up for one year as part of the sweeping 2021 pandemic aid law, and another $33 billion to reinstate a set of expired business tax benefits related to research, business and capital deductions. Both would last through 2025.

It would also include an increase of a tax credit to encourage the development of low-income housing, tax relief for disaster victims and tax breaks for Taiwanese workers and companies operating in the United States. The package would be financed by reining in the employee retention tax credit, a pandemic-era program to encourage employers to keep workers on payroll that has become a hotbed of abuse…

…Still, major hurdles remain. Congress remains primarily focused on funding the government before a shutdown deadline on Friday, and fractious House Republicans continue to put Speaker Mike Johnson of Louisiana in a bind. [Pols emphasis]

Indeed, right-wing House Republicans are in open revolt against House Speaker Mike Johnson, whose “honeymoon” period since being elevated to the top seat in the House Chamber has apparently ended. Last week, Texas Republican Rep. Chip Roy indicated that another “motion to vacate” the Speakership was definitely still in play. Virtually everyone in Congress could generate goodwill with voters by reducing child poverty rates, but the loud MAGA voices in the House Republican caucus are unserious people with no interest in governing. As The Times notes:

A new law to expand the child tax credit would be a rare piece of substantive legislation and a political victory for President Biden and Democrats, even as Republicans could also promote the business tax breaks and point to the deal as evidence that they are able to govern despite a year of remarkable chaos and a lack of productivity. [Pols emphasis]

“Moving into an election cycle, I think it just becomes considerably more difficult,” Democratic Rep. Richard Neal, who also noted both parties’ slim margins in each chamber, said last week. “But I think many of us could figure out how to get there.”

The expanded child tax credit cut child poverty rates nearly in half in 2021 and cost an estimated $105.1 billion. It lapsed in 2022, reducing the amount that families could claim per child to levels set by former President Donald J. Trump’s tax cuts in 2017 and limiting how much of the credit lower-income families could receive.

The deal announced on Tuesday would gradually raise the cap on how much the lowest-income families could receive to match the amount for higher-income families. It would also make the credit more accessible for families with multiple children, allow parents to use their previous year’s earnings to claim a larger credit and automatically adjust for inflation beginning in the current tax year.

The success of the 2021 ECTC absolutely validated years of advocacy work from Bennet on the subject, but funding for the program was not renewed — in part because West Virginia Democratic Sen. Joe Manchin wanted to see a stricter work requirement attached to the benefits. Manchin bought into the old Republican canard that federal aid money is just used to buy drugs for people on welfare, yada, yada (nevermind that there is ZERO reliable data to support this claim).

Passing an ECTC in 2024 would seem like another win-win situation for politicians on both sides of the aisle, but House Republicans have proven again and again that they have absolutely no idea how to take a win. Opposing all things, no matter their value, is the default position for the performative obstructionist group of MAGA Republican in Congress.

This isn’t just a Republican problem in Congress, either; just last week, 15 Republican governors REFUSED to accept federal aid to help fund meals for low-income children. Iowa Gov. Kim Reynolds (R) said she saw no need to add money to a program that helps food-insecure youths “when childhood obesity has become an epidemic.” 

If this disgusts you as much as it should, you should know that the remedy is fairly simple: Vote for Democrats in 2024.