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Democrats signal House bill to go further than Biden proposal on child tax credit

Democrats signal House bill to go further than Biden proposal on child tax credit
© Greg Nash

Key Democrats on Tuesday signaled that the House will include a permanent expansion of the child tax credit (CTC) in legislation based on President BidenJoe BidenMellman: Trump voters cling to 2020 tale FDA authorizes another batch of J&J vaccine Cotton warns of China collecting athletes' DNA at 2022 Olympics MORE’s forthcoming family-focused plan, though Biden is expected to propose extending the expansion of the credit for only several years.

“The House will be writing the bill, and we will be making the child tax credit permanent,” Rep. Rosa DeLauroRosa DeLauro110 House Democrats endorse boost to staff pay NRCC chairman, Texas lawmakers among top earmark requesters The COVID-19 crisis may soon be over, but the youth mental health crisis is only just beginning MORE (D-Conn.), the chairwoman of the House Appropriations Committee, said during a virtual press conference.

Rep. Suzan DelBeneSuzan Kay DelBeneThe case for improving America's research and experimentation tax credit Democrats renew push for permanent child credit expansion Democrats signal House bill to go further than Biden proposal on child tax credit MORE (D-Wash.) added that House Ways and Means Committee Chairman Richard NealRichard Edmund NealBiden moves to undo Trump trade legacy with EU deal Republicans open new line of attack on IRS Ireland, loved by Biden, is obstacle to tax deal MORE (D-Mass.) released his own proposal aimed at helping families on Tuesday that includes permanently expanding the CTC.

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“The president will propose his plan. Congress is going to write the bill,” said DelBene, a Ways and Means Committee member and chairwoman of the centrist New Democrat Coalition. “And I’m so excited that my chairman, Richie Neal, announced his support for the permanent child tax credit today and all the work that he has done on this."

The comments from DeLauro and DelBene come amid growing efforts from congressional Democrats to press Biden to include a permanent expansion of the credit in his American Families Plan, which he is expected to roll out in a joint session of Congress on Wednesday. News reports have indicated that Biden will call for extending through only 2025 the CTC expansion that he enacted in March.

DeLauro said that while it’s up to Congress to write legislation, lawmakers want to see Biden propose making the CTC expansion permanent so that the White House and lawmakers “move in concert with one another.”

A spokesperson for DelBene said lawmakers are confident that permanent CTC expansion will be in the final bill given its broad support.

Biden’s $1.9 trillion coronavirus relief law expanded the child tax credit for 2021 in several ways. The law increased the credit amount from $2,000 to $3,600 for children under age 6 and to $3,000 for older children. It made the credit fully refundable, which means that the lowest-income families can receive the full amount. Additionally, it directed the IRS to issue advance payments of the credit, which the agency said it expects to be able to do on a monthly basis starting in July.

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Democrats have long called for expanding the child tax credit in order to reduce child poverty, and there is support from lawmakers in the party across the ideological spectrum to make permanent the expansion enacted earlier this year. 

But there is no guarantee that Biden will sign legislation this year to make the CTC expansion permanent.

Extending the credit is expensive, and the White House may want to limit the size of its family-focused package, which is already expected to include more than $1 trillion in new spending. The administration is already facing some pushback from Republicans and the business community about its plans to raise taxes on the wealthy to pay for the package.

DelBene said that while some have expressed concerns about the cost of making the CTC expansion permanent, the "cost of inaction is too great" because there are also costs to child poverty. 

Lawmakers expressed concerns that the CTC expansion could eventually expire and not be renewed if it’s extended for only a few years.

"If we only extend the child tax credit temporarily until 2025, we will run the risk of putting families and children at the mercy of a Republican House or a Republican Senate or, heaven forbid, a Republican president," said Rep. Ritchie Torres (D-N.Y.).

The virtual press conference and the proposal that Neal released Tuesday are two of several recent efforts from congressional Democrat to press the White House on a permanent child tax credit expansion.

A group of first-term lawmakers, led by Torres and Rep. Sara Jacobs (D-Calif.), sent a letter to Biden urging him to make permanent the expansion of the tax credit.

“American families need a permanent child tax credit – not one that lasts one year, or even four,” the lawmakers wrote.

Additionally, Torres, Sen. Cory BookerCory BookerZombie Tax punishes farmers to fill DC coffers Rand Paul does not support a national minimum wage increase — and it's important to understand why Absences force Senate to punt vote on Biden nominee MORE (D-N.J.) and other members of the Congressional Black Caucus recently sent Biden a letter urging him to cement the expansions of the CTC and two other tax credits that were enacted in the president’s coronavirus relief law.

“A five-year extension would needlessly jeopardize the recovery of the families and workers who need it most, simply delaying a spike in poverty rather than eliminating it outright,” they wrote.

A permanent expansion of the child tax credit is one of several priorities of congressional Democrats that Biden is not expected to include in his new proposal. Others include improvements to the unemployment insurance system and lowering the Medicare eligibility age.