House Approves Child Tax Credit Expansion; Senate's Support Uncertain

House Approves Child Tax Credit Expansion; Senate's Support Uncertain


In a rare show of working together, the House has agreed on a big tax plan that makes the Child Tax Credit bigger and keeps some business tax breaks going. The plan, named the Tax Help for Families and Workers Act of 2024, now has to deal with the tricky Senate, where getting the needed 60 votes to pass it is still uncertain.

The House vote of 357 to 70 showed more support from Democrats than Republicans, setting the stage for a Senate challenge. Senate Finance Committee Chairman Ron Wyden and House Ways and Means Committee Chairman Jason Smith previously showed an agreement on the plan, highlighting its promotion of financial security for working families, economic growth, and support for Main Street businesses.

Senator Kevin Cramer, a North Dakota Republican, acknowledged the seriousness of the agreement between Wyden and Smith, saying, "If Jason Smith and Ron Wyden can agree on something to this degree, that's this complicated, I start with the notion that it's certainly serious, and we'll take a look at it."

The plan aims to make the Child Tax Credit better, offering relief to lower-income families. Although the improvement is smaller than the pandemic-era increase, it could still potentially lift over half a million children out of poverty, according to the Center on Budget and Policy Priorities.

The bill's journey through the Senate, however, is expected to face challenges. Some Senate Republicans are expected to oppose it, expressing concerns about the cost and its potential impact on President Biden's reelection bid. On the other end of the spectrum, some progressives argue that the plan falls short in adequately supporting low-income Americans.

Senator Mitt Romney of Utah voiced his reservations, saying, "I'm not inclined to support the plan," emphasizing support for tax provisions but expressing reluctance toward adding a new entitlement that could cost approximately $800 billion over a decade.

The House-passed plan proposes a three-year improvement of the credit at a cost of around $33 billion, according to the Congressional Budget Office. While an earlier version of the package was estimated to cost $825 billion over a decade, the final deal included various offsets to mitigate its impact on the deficit.

Senator Chuck Grassley of Iowa expressed reservations, noting the potential impact on President Biden's image during an election year. "Passing a tax plan that makes the president look good, mailing out checks before the election, means he could be reelected, and then we won't extend the 2017 tax cuts," he remarked.

Senate Majority Leader Chuck Schumer remains supportive of the plan, emphasizing collaboration with Wyden to determine the "best way forward." Senator Angus King, an independent from Maine, sees the plan garnering "good support" across the chamber, praising it as a "good plan" negotiated on a bipartisan basis.

Senator Cramer, while acknowledging imperfections, remarked that "perfect can't be the enemy of good." He pointed to positive aspects for businesses while suggesting potential adjustments to the child tax credit elements.

The proposed changes to the Child Tax Credit include making it easier for more families to qualify, along with increasing the amount from $1,600 per child to $1,800 in 2023, $1,900 in 2024, and $2,000 in 2025. The plan also addresses inflation adjustments for future years.

However, the plan's passage in the Senate faces additional challenges due to an already busy legislative agenda. Ongoing talks on a border security agreement tied to a supplemental funding bill have consumed Senate negotiators' time for months. With expectations of an imminent agreement, this could lead to floor action that further occupies the Senate's time.

Moreover, Congress is hurtling toward a funding cliff, with looming deadlines to avert a government shutdown next month. The Senate's availability to address the tax plan may be further constrained if the House proceeds with a possible trial following a vote to impeach Department of Homeland Security Secretary Alejandro Mayorkas.

As the plan navigates the Senate, the delicate balance between fiscal responsibility and supporting families in need remains a focal point. The plan's fate hangs in the balance, with senators weighing the potential benefits against concerns over costs and political ramifications. Will this bipartisan effort withstand the challenges ahead, or will it succumb to the intricate dynamics of Senate politics? The coming weeks will reveal the fate of the Child Tax Credit expansion and its impact on American families.


Post a Comment

Previous Post Next Post

Contact Form