How could Joe Biden’s big gambling on a children’s tax credit pay off

WASHINGTON – Democrats want monthly cash benefits for parents to continue forever, but their Build Back Better law would extend the improved child tax credit by just one year.

The shorter extension created budget space for other priorities, and Democrats believe this leads to a political struggle that can be won in a number of ways – because Republicans will try to say no to continuing to benefit.

“They’re going to have trouble with that,” Senator Sherrod Brown (D-Ohio), a key advocate for politics, told HuffPost.

They will face many parents who will say, ‘Are you going to stop this? Why are you going to stop this?’ Because it changed lives so much, ”Brown said.

Democrats extended the child tax credit as part of a U.S. bailout plan earlier this year, with the IRS ordering the loan with monthly repayments to advance to 36 million households with children. Early data show policy has already reduced child poverty by 25% in September.

Continuing the monthly payments until next year was a key part of the Build Back Better program, which also includes a universal kindergarten, childcare subsidies, extended health insurance and green energy initiatives.

Democrats have rejected Senator Joe Manchin’s (DW.Va.) demands to deny child allowance to higher-income households and those who have no income from work but only extend it until 2022, instead of 2025 as originally planned. This frees up about $ 300 billion to include other programs in the $ 1.75 trillion account. Initially, they chose 2025 as the expiration date, because that is when the Republican tax cuts for 2017 expire, which established simple trade – democrats agreed to continue tax cuts and Republicans would support child allowance.

Senator Sherrod Brown (D-Ohio) interrogates Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell at a hearing on the results of the CARES coronavirus aid package on September 28, 2021.

KEVIN DIETSCH via Getty Images

The adoption of another important child benefit extension law next year would not be a small thing and there is a real risk that Democrats would not be able to save on payments. Representative Kevin Brady (R-Texas), the top Republican in the House of Representatives for tax policy, said he would not be interested in keeping the tax credit in its current form.

“Workers are being kicked out of the workforce and we just can’t have that at the moment,” Brady told HuffPost, expressing the standard Republican belief that any amount of government support for workers will be less desperate after employment.

But Democrats may want to talk about the need for another extension of the child tax credit when they run the campaign in the interim terms next year, when they are expected to lose control of the House of Representatives.

“We need to change this election from a referendum to a choice,” said Ian Russell, a Democratic ad creator and former political director of the Democratic Congressional Campaign Committee.

In other words, vote for the Democrats, otherwise your monthly benefit will disappear. (The program pays parents $ 300 per month for each child under the age of 6 and $ 250 per month for children under the age of 18.)

“We have the opportunity to resolve the interim mandates if we can turn it into a choice between Democrats who want to do ABC and Republicans who want to do XYZ,” Russell said.

Asked if Democrats will be camping to save credit, Brown replied, “If their IQ is over 70, they will.”

“They will face many parents who will say, ‘Are you going to stop this? Why are you going to stop this?’

– Sen. Sherrod Brown (Ohio)

Progressive Democrats argued that as many new policies as possible would be imprinted in Build Back Better, even if this would shorten the duration of these policies, assuming that people would like new things so much that they would demand more.

Moderately in favor of implementing fewer new policies over time. “I don’t believe a future House or Senate under Republican control would extend increased tax breaks for children or other Democratic priorities without significant erosion,” said spokeswoman Suzan DelBene (D-Wash.), President of the New Democrats coalition. this month.

Combating expiring benefits will make people pay more attention to politics, said Lee Drutman, a political scientist and senior fellow at New America. Drutman accused Democrats of calling monthly cash payments a “tax credit” or a “tax cut” instead of a bonus or child allowance because taxes are confusing and people generally think of tax cuts as a Republican thing.

However, if the tax credit becomes a political struggle and Democrats present themselves as those who want to save credit – even though they are the ones who set the deadline – then they would have a winning question.

“People value things they already have more than things they don’t,” Drutman said.

Senator John Thune (RS.D.) said he did not know if Democrats were really capable of such a budget-electoral move. “They haven’t done much here that would look like they’re very organized or aware of what they’re doing,” Thune said.

It did not ensure that Democrats could intimidate Republicans to support the continuation of child tax relief. After all, last month, Democrats barely garnered 10 Republican Senate votes for a measure that would allow the federal government to pay its bills, even if default could lead to a financial crisis.

Perhaps that’s why Democrats included a virtual backup plan in the latest Build Back Better draft. The extension of the total loan from $ 2,000 to $ 3,600 per year per child with a pre-monthly distribution expires after one year – but “full repayments” would be permanent under the law. This means low-income parents could still receive flat-rate checks worth $ 2,000 per child after they file their taxes, even if Congress would allow advances and an additional $ 1,600 to disappear.

Maintaining full reimbursement alone would in itself reduce child poverty by 19% annually, according to an analysis by the Jain Family Institute. Full refunds and extra money reduce poverty by 40%.

Senator Mitt Romney (R-Utah), who proposed his version of the child allowance last year, described the one-year extension as “a trick not really suitable for families wondering about their future.” However, he suggested that the Congress of Families not let it hang.

“Families with children will be helped, no doubt about it,” Romney said.


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