Monthly checks to parents aren’t coming back any time soon with Democrats and Republicans miles apart on striking a deal

joe biden mitch mcconnell
President Joe Biden; Senate Minority Leader Mitch McConnell.
  • The enhanced child tax credit expired last year and there's few signs a bipartisan deal can be struck.
  • Republicans and Democrats disagree on program basics, like who should qualify.
  • Some Republicans do favor making the credit more generous — as long as it's tied to work.

With the centerpiece of President Joe Biden's economic agenda on the backburner, it's not likely that checks to parents will make a comeback anytime soon.

The expanded child tax credit program expired at the end of last year with Congress failing to extend it. The program provided up to $300 per kid every month to families, depending on their age. It was beefed up for a year as part of the Democratic stimulus law, bringing its total amount to $3,000 or $3,600 a year for each young child. The measure was also widened so families who have little or no taxable income could qualify for the first time.

Democrats want to extend it for at least another year as part of the Build Back Better plan. But that collided into resistance from Sen. Joe Manchin of West Virginia who demanded that people demonstrate they have a job as a condition to get the aid. Senate Democrats can't advance the plan without him in the 50-50 Senate.

With the big bill on pause, some legislators have hoped for a bipartisan extension of the checks to parents. But Republicans and Democrats are many miles apart given their strong disagreements over the basics of the program, like which families should qualify, the benefit amount and what it should ultimately achieve.

Some Republicans do favor making the credit more generous — as long as it's tied to work.

"I think the common ground here would be to make permanent the doubling of the tax credit to $2,000 and make permanent the expansion of the credit to more families, which we did in 2017," Rep. Kevin Brady of Texas, the ranking Republican on the Ways and Means panel, said in a brief interview on Thursday. The 2017 Republican tax law temporarily doubled the amount of the credit to $2,000, but that's set to expire in 2025.

But Brady shut down the concept of families with no tax obligations from getting the money. "This has always been really based on earnings," he said. "We want to reward work."

Most Democrats favor extending the overhauled program as its currently structured — one that provides at least $3,000 annually to families with no strings attached. Republicans like Brady are against it, arguing that it discourages people from working.

Many economists say expanding the program to the poorest families packs the biggest punch when it comes to cutting child poverty. Early research about the program's effects indicate that child poverty has been reduced by nearly one-third. There's little broad evidence of work disincentives so far.

In addition, financing the program would likely be another hurdle in the path to a compromise. Republicans are dead-set against tax increases to pay for it. "No Republican, including myself, is going to say, 'Hey, I'm in favor of tax increases of any kind," Sen. Mitt Romney of Utah, the author of a competing child benefit plan, told Insider last week.

Some Democrats like Sen. Michael Bennet of Colorado have suggested repealing the Trump tax cuts, an idea that many Republicans and even some Democrats like Sen. Kyrsten Sinema of Arizona would treat as a non-starter.

Read the original article on Business Insider

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