Biden’s plan would partially make child tax credit expansion permanent
President Biden on Wednesday proposed to partially make permanent the child tax credit (CTC) expansion he enacted earlier this year after many congressional Democrats pressed him to cement the expansion.
Biden enacted a coronavirus relief package in March that expanded the CTC in several ways for 2021. His new $1.8 trillion human infrastructure proposal, called the American Families Plan, would make permanent the portion of the expansion that makes the credit fully refundable. That portion of the expansion allows the lowest income families to be able to receive the full amount of the credit.
Biden’s plan proposes to extend other aspects of the CTC expansion, such as the increase in the credit amount, through 2025. The credit amount was raised under the coronavirus relief law from $2,000 to $3,600 for children under 6 and $3,000 for older children.
Media reports ahead of the release of Biden’s plan had indicated that it would extend the entirety of the CTC expansion through 2025 and not make any of it permanent. Those reports didn’t sit well with many congressional Democrats across the ideological spectrum, who stepped up efforts to urge Biden to make the expansion permanent. Lawmakers argued that the CTC expansion is a key way to help reduce child poverty and that families need the certainty that permanence can provide.
While Democratic lawmakers widely support making the expansion permanent, there are some challenges in doing so because of the price tag.
The fact that the plan would make permanent a portion of the CTC expansion suggests that the White House is taking into account lawmakers’ priorities. However, it’s unclear whether the plan will satisfy lawmakers. Prominent House Democrats, such as House Appropriations Committee Chairwoman Rosa DeLauro (D-Conn.), on Tuesday signaled that the chamber’s legislation based on Biden’s plan would include a permanent expansion of the credit.
A White House official said that Biden welcomes lawmakers’ ideas about how to further extend the expansion of the CTC.
Biden’s new plan would also make permanent other expansions of tax credits that were included in his coronavirus relief law. The plan would cement the expansions of the child and dependent care credit, as well as the expansion of the earned income tax credit for childless workers. Additionally, the plan would make permanent the expansion of ObamaCare subsidies.
In total, the plan includes $800 billion in tax cuts for low- and middle-income households, as well as $1 trillion in spending in areas such as education and child care. The White House proposes paying for the proposal through tax increases on high-income individuals.
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