Democrats Consider Risky Plan To Scale Back Child Tax Credit Extension

·4 min read

WASHINGTON — Democrats say this year’s new monthly allowance for parents is one of their greatest achievements — but they might only extend it for one more year.

President Joe Biden proposed the shorter extension of the child benefits in meetings with lawmakers at the White House on Tuesday.

“It’s not going to be as long as I think some of us would have hoped,” Rep. Ami Bera (D-Calif.) told HuffPost of the president’s proposal.

Democrats had originally planned to extend the benefits — which are advance refund payments of the child tax credit — through 2025 so that the policy would expire around the same time as the household tax cuts from the 2017 Republican tax bill. That way, Democrats could cut a deal to extend the child credit along with the Republican tax cuts.

If the child tax credit expires at the end of next year instead, Democrats could be in a weaker position to extend it, since it’s possible Republicans will have regained control of the House of Representatives in the 2022 midterm elections. 

But Democrats are shrinking their plans for major Build Back Better legislation in order to win over Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.). The two holdouts have said they won’t support a bill with $3.5 trillion in new spending, even if the cost is fully offset by tax increases, and Democrats need every one of their senators on board with the plan since they only control 50 Senate seats.

The expanded child tax credit pays parents as much as $300 per child each month so long as they live in households earning less than $150,000 annually. Manchin has pushed for a lower cutoff as well as a “work requirement” that could deny benefits to families with the lowest incomes.

Shortening the extension, however, would save a lot more money since the program costs about $100 billion per year. Biden’s proposed shorter extension to the child tax credit could free up $300 billion in budget headroom for other policies, such as paid leave or child care subsidies.

Congressional Democrats won’t necessarily embrace the shorter extension. 

“We’re going to continue to fight for the House position,” House Ways and Means Committee Chair Richard Neal (D-Mass.) told HuffPost on Wednesday. 

In stark contrast to the closed-door negotiations between the White House and various factions of Democrats, the Ways and Means Committee actually voted on a version of the Build Back Better Act that extended the child tax credit through 2025. Neal highlighted that contrast.

“We didn’t have a new tax plan every half hour,” he said. “We laid out a plan that was fully paid for, and we set our priorities.”

Progressives might support the shorter child tax credit extension since they’ve argued that Build Back Better should include as many new policies as possible, even if they have to fight to extend them within the next few years.

“Nothing is decided until everything is decided,” Congressional Progressive Caucus Chair Pramila Jayapal (D-Wash.) told HuffPost. “We’re trying to make sure that we get as much as we possibly can in all the areas that are important to us.”

Moderates have favored doing fewer programs for longer, an approach that House Speaker Nancy Pelosi (D-Calif.) endorsed earlier this month. The top advocates for the child tax credit have said that securing the longest extension possible should be a major priority.

“A one-year extension is a mistake,” Rep. Rosa DeLauro (D-Conn.) told reporters on Wednesday. “And I think it is very harmful to the country.”

It’s possible that a bill with a shorter extension would lack the votes to pass the House. Rep. Suzan DelBene (D-Wash.), chair of the New Democrat Coalition, a group with nearly 100 House members, said in a statement that the policy should last at least through 2025.

“Scaling back or limiting the accessibility of this critical pillar of President Biden’s agenda would hurt middle-class families and our children’s futures,” DelBene said.

But Senate Democrats might be more amenable to extending the credit just through next year. In a statement Wednesday, Sen. Sherrod Brown (D-Ohio), one of the policy’s top proponents in the Senate, all but endorsed Biden’s proposal — so long as it’s not paired with eligibility cuts. 

“Any extension of the full, expanded CTC is a win for Ohio families,” Brown said. “For the second year in a row, Democrats will have passed the largest tax cut for working families ever, which is making a transformational difference in people’s lives.”

This article originally appeared on HuffPost and has been updated.

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