A bipartisan child tax credit passed the House. Here's why Milwaukee's Gwen Moore voted no

WASHINGTON – Milwaukee Rep. Gwen Moore has made fighting for low-income children and families the centerpiece of her career in Congress.

Part of that effort has been working to expand the child tax credit. On Wednesday night, however, she voted against a nearly $80 billion tax package that would do just that, arguing in part that the measure does not do enough to address the poorest families who are most in need.

“The proposal is an improvement, slightly,” Moore, a Democrat, told the Milwaukee Journal Sentinel this week. “But if it’s supposed to be a child subsidy — the full credit is not provided to the lowest, lowest, lowest, poorest of the poor children. It’s an upside down incentive.”

Moore’s opposition to the package did not jeopardize the legislation. It passed the chamber on a 357-70 vote and now goes to the Senate. The White House has signaled President Joe Biden intends to sign the bill into law.

But the vote was notable for Moore, who has said she came to Capitol Hill nearly 20 years ago to "un-deform child support." On the House floor just hours before the vote Wednesday, she said the measure was better than current law but suggested it was not a sufficient compromise.

"I think we need to compromise, but we don’t need to capitulate," Moore said during debate on the bill. "We’re going to expand this tax for poor children, but the poorest will be even poorer."

The measure, negotiated by Missouri Republican Rep. Jason Smith and Oregon Democratic Sen. Ron Wyden, would expand the child tax credit over the next three years to millions of children living in poverty, though it falls short of the one-year child tax credit expansion enacted in 2021 through the American Rescue Plan Act.

It also includes billions of dollars in tax credits to businesses for expenses like domestic research and development. The corporate tax credits include those for interest expenses and equipment investments, some of which were proposed under the Trump administration in 2017. The breaks are offset in part by curbing a pandemic-era employee retention tax credit that incentivized companies to keep workers on payroll.

Specifically, a portion of the proposal seeks to make the child tax credit more accessible for families with multiple children and raises the refundable portion of the credit for low-income families from the current rate of $1,600 per child to $1,800 per child. That rate would bump to $1,900 for the 2024 tax year and $2,000 in 2025 and would adjust to the rate of inflation.

Families would be able to use the prior year’s earnings to qualify for a larger credit under the measure.

The expansion would lift about 400,000 children out of poverty and reach as many as 16 million children in low-income families in its first year of enactment, according to the Center on Budget and Policy Priorities, a nonprofit that studies tax policy.

Approximately 224,000 children in Wisconsin would become eligible for the program under the bill, the CBPP said. Milwaukee, in particular, has one of the highest poverty rates among major cities in the country. Just under 24% of Milwaukeeans live in poverty, according to U.S. Census data, including more than a quarter of the city's children.

Still, the package has faced criticism from some Democrats who have lamented that it fails to address the poorest families and falls short of the 2021 child tax credit provisions, which provided a monthly credit and was touted as reaching as many as 61 million children. A number of Republicans have criticized the push as de-incentivizing work.

Families who make less than $2,500 per year would not be eligible for the credit under the proposal. And the legislation also leaves in place work requirements — a topic of contention between the parties on Capitol Hill.

Connecticut Rep. Rosa DeLauro, the top Democrat on the Committee on Appropriations, criticized the bipartisan deal this month as leaving “the poorest families behind because of a policy choice.”

Moore, who sits on the powerful tax writing Ways and Means Committee, was one of just three members to vote against the legislation when it passed out of Ways and Means on a bipartisan 40-3 vote in mid-January. She said at the time the bill “was not there yet.”

In a brief interview with the Journal Sentinel, Moore railed against work requirements and said a mother with two children under 5 “would have to work literally 40 hours a week plus do Uber and Uber Eats in order to qualify for the credit because she wouldn’t make enough money to access it.”

“I think we need to stop tying the CTC to work requirements, but if we need to keep some for the sake of compromise, then we need to think about what the real-world impact looks like and recognize the many demands on parents,” she said in a later statement.

Wisconsin’s delegation was split on the bill. Democratic Rep. Mark Pocan and Republican Rep. Tom Tiffany joined Moore in opposition.

Tiffany in a statement after the vote called the measure a "massive expansion of Washington's welfare state" and claimed "illegal immigrants would be eligible to cash in" on the child tax credit.

But Smith, the Republican chairman of the Ways and Means Committee, has said the bill provides "no special loopholes for illegal immigrants." The bill would not provide any new benefits for undocumented immigrants and would only provide a boost in existing benefits for families already receiving the credits. Tiffany argued children of migrants with an Individual Taxpayer Identification Number could receive the benefit money.

Pocan voted against the measure, a spokesman said, over concerns it provided more credits to businesses than families.

Republican Rep. Glenn Grothman after the vote told the Journal Sentinel he voted to pass the measure because it was a "pro-manufacturing vote... and it's a rare situation in which we gave something to parents who aren't on welfare, just like people on welfare."

"Usually they discriminate against the middle class," Grothman said. "These child credits did not discriminate against the middle class. It's a rare vote in which we treated the middle class fairly."

And Republican U.S. Reps. Mike Gallagher and Derrick Van Orden both pointed to the elimination of the COVID-era employee retention credit that has been linked to fraud as a positive step. Gallagher, the chairman of the select committee investigating the Chinese Communist Party, noted the bill extends tax breaks to Taiwanese companies, strengthening the U.S.'s relationship with the island.

Moore, for her part, said she supports provisions in the bill that would allow families with multiple children to receive more money and allow families to use the prior year’s income to calculate their tax credit. But those points were ultimately not enough for her vote.

“These are reasonable changes,” she said, “but they don’t go far enough.”

This article originally appeared on Milwaukee Journal Sentinel: House passes expanded child tax credit with Gwen Moore in opposition