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The expanded child tax credit, a groundbreaking social program that gave millions of American families monthly checks from the federal government, expired at the end of the year.
The U.S. has had a child tax credit since the 1990s, but when Democrats passed their $1.9 trillion economic stimulus package in March, they made three major changes that transformed it from a typical end-of-year tax write-off to the closest thing the country has ever had to a child allowance. The bill increased the size of the credit from $2,000 to up to $3,600, issued checks monthly and changed eligibility rules so low-income parents who had been left out under the previous system could receive the full benefit.
The first checks, for either $250 or $300 depending on the age of the child, went out to about 35 million families in July. Democrats were hoping to include a long-term extension in President Biden’s Build Back Better legislation, but the program expired when they weren’t able to reach an agreement on the sweeping social spending plan before the end of the year. Even though it lasted for only a few months, studies suggest that the monthly checks helped keep struggling families afloat and significantly reduced child poverty.
Disagreement over the child tax credit is reportedly one of the thorniest issues that have prevented a deal from being reached. Conservative Democratic Sen. Joe Manchin, whose vote is needed to pass any version of Biden’s agenda, appears to be particularly opposed to the credit — even reportedly saying that parents would spend the money they received on drugs. In late December, Manchin reportedly presented Biden with a $1.8 trillion package that he’d be willing to support. The expanded child tax credit was not part of that plan.
Why there’s debate
Manchin’s apparent opposition to the expanded child tax credit is considered by many as a signal that the program is gone for good. But there’s some optimism that he could be convinced to include it in a final version of Build Back Better, if a deal is reached at all.
Some political analysts say it’s possible that pressure from his Democratic colleagues and his constituents could push Manchin to drop his objections. Others believe he could be convinced to accept a trimmed-down version of the credit that potentially includes smaller checks, targets support only to the neediest families or imposes other restrictions like a work requirement.
There is also hope for alternative paths to support parents outside of the Build Back Better framework, some say. Specific attention has been paid to a proposal from Republican Sen. Mitt Romney that would create a more direct child allowance system to provide monthly benefits to families through the Social Security Administration rather than as a tax credit. In theory, Romney could give Democrats the 50th vote needed to pass a plan without Manchin’s support. Enthusiasm for the short-lived federal program could also prompt some states and cities to create their own versions, others say.
Monthly checks have stopped, but parents can still expect one boost from the expanded child tax credit. The program ran for only half the year, meaning families can claim the other half — up to $1,800 per child — when they file their taxes.
A smaller, more targeted version of the credit might be acceptable to Manchin
“The child tax credit itself should be more targeted and last longer. … The child tax credit increases could also be focused on younger children by retaining the full increase for children under 3 but scaling it back for older children. Finally, the credit could be phased out more rapidly as incomes rise, focusing help on those who need it most.” — Jason Furman, Wall Street Journal
Manchin may be more susceptible to pressure on the child tax credit than other policies
“Normally, Manchin gets pressure on social issues from the more liberal wing of the Democratic Party. This criticism from the wider party is fuel for his positioning and policy goals within the state. On such issues, the more criticism he receives from the left, the better. … The public pressure on child tax credits is not the norm and does not offer the same pivot for Manchin. West Virginians value programs like the child tax credit.” — Samuel Workman, Conversation
It may be impossible to sell Manchin on supporting the child tax credit
“Manchin’s various rationales just don’t add up. Unless his bottom line is that he just doesn’t want to extend the policy no matter what — or even worse wants to kill all of BBB — and is just looking for an excuse to do so.” — Greg Sargent, Washington Post
Lack of full-throated public support limits how much pressure Manchin will feel
“When the policy first passed in March, many experts hailed its potential to cut child poverty and hunger, and many Democrats hoped regular cash in families’ pockets would prove wildly popular. But the public’s appraisal has been less glowing. … As the party continues to debate whether and how to resurrect the expanded credit, polls generally suggest that Americans have reservations about making it a more lasting fixture of the social safety net.” — Ian Prasad Philbrick, New York Times
Romney could prove to be the savior of Biden’s family-benefit agenda
“With Manchin clearly out on child tax credit, it’s time to separate the plan from Build Back Better and work to get it passed with bipartisan support. Romney, to his credit, already has a plan which closely mirrors that of the Democrat party. This option is a clear win-win-win.” — Toph Cottle, Salt Lake Tribune
Replacing the credit with Romney’s plan would be a win for American families
“To be sure, the Romney plan is not perfect. … But even with these flaws, it’s still quite a good benefit that is better than the status quo and, in my view, even better than the CTC the Democrats were trying to pass in the BBB legislation. Democrats should work with Romney to pass this plan.” — Matt Breunig, People’s Policy Project
States could create their own programs
“Frustrated on a national level, some lawmakers are shifting their focus to state-level child tax credits to offer families a safety net.” — Ursula Perano, Daily Beast
The country will be better off if the expanded credit is gone for good
“Why aren’t they making those bigger monthly checks permanent, as President Joe Biden and other key Democrats have said they intend? It’s simple: It would come at a staggering cost.” — Matt Weidinger, Washington Examiner
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