Millions of families this weekend will stop receiving monthly child tax payments for the first time in months after Congress failed to pass an extension of the expanded credit.
As lawmakers struggle to revive talks to renew the expansion, more than 30 million families that have been receiving the monthly payments since last July will not see another round on Jan. 15.
Democrats temporarily expanded the child tax credit in early 2021 as part of a sweeping coronavirus relief package enacted under President BidenJoe BidenGallego on Jan. 6 rioters: ‘F— them’ Psaki: Why is GOP afraid of presidential debates? Biden calls on employers to mandate vaccines despite Supreme Court ruling MORE.
Under the expansion, Democrats removed work requirements for the credit, raised the maximum credit amount and allowed those eligible to access half of the credit amount through monthly payments.
Many Democrats and advocates have called for expanded credit to be made permanent, touting it as significant contributor to reducing child poverty by allowing those in the lowest income households to access the full amount, as well as a means to help provide relief to middle-income families.
“You’re seeing folks spending it on like bills, food, school supplies, some for savings, and some for paying off debt, and I think this sort of speaks to the real value of this kind of economic relief, especially in the middle of a pandemic,” Ahmad Ali, press secretary for progressive pollster Data for Progress told The Hill. “It’s about making things a little bit easier to raise a family to stay afloat in the middle of all this.”
Democratic leadership aimed to pass the extension as part of a larger social and climate spending plan known as the Build Back Better Act, a cornerstone of President Biden’s economic agenda.
But those efforts hit a roadblock amid opposition from Sen. Joe ManchinJoe ManchinManchin says he won’t vote to ‘eliminate or weaken the filibuster’ Democracy is on life support — and the GOP wants to pull the plug Biden: ‘I don’t know whether we can get this done’ MORE (D-W.Va.), a key centrist holdout who has expressed concerns about the expanded credit, in addition to the overall package in its current form. Manchin has cited rising inflation as one of his reasons.
“I cannot vote to continue with this piece of legislation. I just can’t. I tried everything humanly possible. I can’t get there,” Manchin declared on “Fox News Sunday” in December. “This is a no on this legislation.”
Democrats have expressed hope that the tax credit and larger talks can be revived and expect negotiations to pick up in the weeks ahead. Senate Majority Leader Charles SchumerChuck SchumerBiden’s desperate pitch to keep minority voters Business executives urge Senate to bypass filibuster to pass voting rights Former colleagues honor Reid in ceremony at Capitol MORE (D-N.Y.) also expressed hope earlier this month that the bill would eventually be brought to the floor.
Democrats are using a process known as budget reconciliation to pass the bill, which will allow them to approve the package in the 50-50 Senate with a simple majority. But to pass the plan, Democrats need all 50 of their party’s senators to back it.
Rep. John YarmuthJohn Allen YarmuthOn The Trail: Retirements offer window into House Democratic mood Democrats eager to fill power vacuum after Pelosi exit Democrats confront rising retirements as difficult year ends MORE (D-Ky.), chairman of the House Budget Committee, told reporters earlier this week that he is hopeful the expanded child tax credit is one of the major policies that will be able to remain in the final version of the plan.
“I think one element of BBB that people would actually feel is the child tax credit before the midterms. The rest of it, they won’t feel,” Yarmuth said, though he acknowledged that Manchin, who has criticized the benefit’s structure, is “not big on that one.”
While most Republicans are opposed to the design of the expanded child tax credit Biden signed off on last year, some have signaled interest in reaching a bipartisan agreement on a path forward for the tax credit. But they’ve said the benefit would likely look much different from the Democratic-backed expansion.
“Unfortunately, that went to very high-income people. It was unlinked to work, and I would prefer we went back to the original formulation,” Sen. Susan CollinsSusan Margaret CollinsSinema scuttles hopes for filibuster reform Biden’s FDA nominee advances through key Senate committee Like it or not, all roads forward for Democrats go through Joe Manchin MORE (R-Maine) previously told The Hill.
Advocates and experts say returning to previous versions of the credit, which included work requirements and a credit that was not fully refundable, would hurt those most vulnerable.
“It’s about cutting the deep poverty rate, and those are the folks who, because they don’t have any earnings, or have very limited earnings, basically did not benefit much at all from the child tax credit before it became fully refundable,” researcher Stephen Nuñez, who heads guaranteed income policy research for the Jain Family Institute, told The Hill.
Nuñez added that it’s “very clear that the fully refundable benefit has a disproportionate impact on African American child poverty and deep poverty and Hispanic poverty and deep poverty.”
Data released by Columbia University’s Center on Poverty and Social Policy in 2019 showed glaring racial disparities when doing a breakdown of the demographics of families’ access to the credit prior to the expansion last year.
At the time, the group said in its report that more than half of “Black, non-Hispanic and Hispanic children are left behind, compared to 23 percent of White, non-Hispanic children; and nearly 1-in-5 Black, nonHispanic children do not receive any credit at all.”
“It’s pretty clear that it’s the full refundability that’s doing the lion’s share of the work on combating child poverty,” Nuñez said. “So, it’s certainly something that, in the Build Back Better resurrection negotiations, that you’d imagine that the Democrats would want to hold firm on if they were going to keep the child tax credit as part of that package.”