Child Tax Credit Could Be the Stimulus Payment Used as ‘Bargaining Chip’ for Tax Reform — Could Payments Come Close to $300 a Month?
Congressional Democrats are once again pursuing an expanded child tax credit that would give qualifying households extra money each month, similar to the enhanced CTC included in the 2021 American Rescue Plan Act. Although past efforts to revive the credit have failed, there’s a chance this one could succeed — even though Republicans control the U.S. House.
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The reason has to do with current GOP efforts to push through tax reform. As Punchbowl News reported, House Republicans have “mobilized around an ambitious package of tax cuts” just as Senate Democrats have introduced legislation that would make the enhanced child tax credit permanent.
Although the two sides typically disagree on both tax reform and entitlement programs, they might be willing to negotiate a compromise that would give the GOP its tax cuts and the Dems their expanded CTC.
“I think Republicans want to consider it as part of a compromise for the Democrats,” Rep. Don Bacon (R-Neb.) told Punchbowl News. “We know that that’s like one of their top issues. This may be a bargaining chip that we can use.”
The expanded child tax credit included in the American Rescue Plan gave eligible households $250 per month for each qualifying child ages 6 to 17 and $300 per month for each qualifying child under age 6, according to the IRS.
That program ended at the close of 2021. Efforts to extend it beyond 2021 fell short even in the Democrat-controlled Congress, as some Dems opposed the extension. As previously reported by GOBankingRates, the end of the expanded CTC put nearly 4 million children back into poverty, according to some estimates, and pushed the child poverty rate up by more than 40%.
Even some Republicans concede that the expanded CTC had a positive impact for many American families. U.S. Sen. J.D. Vance (R-Ohio) told Punchbowl News it was “one of the few issues of tax policy where you have some bipartisan agreement.”
Another Republican, Montana Gov. Greg Gianforte, has urged action on a proposed permanent, refundable $1,200 per child tax credit for working families in his state.
But as Punchbowl News pointed out, the program’s cost has made some Republican tax hawks “shudder.” According to Congressional Budget Office estimates, permanently extending the American Rescue Plan’s CTC would cost roughly $105 billion a year.
Even so, some GOP lawmakers might be willing to support an expanded CTC if it means pushing their tax package through.
“If it’s properly constructed and properly sized, you’ll find some interest on the Republican side in negotiating a tax package,” Sen. Todd Young (R-Ind.) said.
Meanwhile, House Democrats recently proposed expanding the CTC to include a $2,000 payment for newborn babies, Roll Call reported. That could push the total benefit to as high as $5,300 in the first year of a child’s life.
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The new legislation was co-sponsored by Democratic Reps. Rosa DeLauro of Connecticut, Suzan DelBene of Washington and others, according to Roll Call. As of this week, the bill has 210 signatories.
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This article originally appeared on GOBankingRates.com: Child Tax Credit Could Be the Stimulus Payment Used as ‘Bargaining Chip’ for Tax Reform — Could Payments Come Close to $300 a Month?
