Five Democratic senators urged President Biden on Wednesday to keep fighting for the child tax credit extension, which he hinted last week could have to be withdrawn from a modified version of his sweeping climate and domestic spending bill.
Last year, the credit was included in the $1.9-trillion American Rescue Plan, which provided monthly payments of $250 or $300 per kid to more than 35 million families.
The payments stopped in December, and a one-year extension included in Biden’s domestic spending measure is now in jeopardy as politicians try to rework the bill to get the 50 Senate votes it needs to pass.
Senators Michael Bennet of Colorado, Sherrod Brown of Ohio, Cory Booker of New Jersey, Raphael Warnock, and Ron Wyden of Oregon wrote to Biden, calling the child tax credit “A landmark policy success of this administration” and “the largest tax relief for low- and middle-income families in modern American history.”
They pointed out that last year’s payments “are predicted to reduce child poverty by more than 40%,” and that “an estimated 3.7 million children were kept out of poverty in December 2021 alone.”
The issue is yet another source of friction between the White House and an increasingly divided Senate Democratic caucus as they try to salvage what they can of Vice President Joe Biden’s ambitious domestic program, which is contained in a $1.75 trillion spending proposal entitled “Build Back Better.”
Although the bill got approved by the House, it was derailed in December when Sen. Joe Manchin III (D-W.Va.) stated that he would vote no.
Role of Manchin
Last week, during a lengthy press conference marking his first year in office, Biden voiced optimism that he could save “chunks” of the package, notably the $550 billion earmarked for climate change investments and preschool subsidies Manchin has previously stated he supports.
Manchin, a conservative Democrat, has been hesitant to extend the child tax credit, even though his vote would give his party the fifty votes needed to pass the bill through the budget reconciliation process.
Biden called the child tax credit “a middle-class tax reduction” in July at a White House event, predicting it would result in “the largest-ever one-year decline in child poverty in the history of the United States of America.”
However, given the importance of securing Manchin’s support for parts of his package, Biden was evasive last week when asked about the chance of renewing the child tax credit as part of any legislative agreement.
Biden stated at a press conference on Jan. 19. “They’re huge projects that I’ve worked on and that I care a lot about, and I’m going to keep coming back to them in whatever way I can to try to get portions or all of them done.”
The five Democratic senators who wrote to Biden in support of the child tax credit encouraged the president to look into the idea, noting that the monthly payments, which averaged $444 in December for participating families, “helped families cope with pandemic-induced price hikes.” according to the president.
They said that not extending the tax credit would result in a tax hike for families.
“The repercussions of failing to continue the CTC extension are serious,” the senators wrote, “especially as families confront another wave of the COVID-19 pandemic.”
“Without the increased credit, approximately 10 million children will be forced back into or deeper into poverty this winter, pushing the monthly child poverty rate from around 12% to at least 17%.”
It is impermissible to return to a status quo where children are America’s poorest residents. Child poverty costs our country more than $1 trillion per year after making unprecedented progress. During a pandemic, raising taxes on working families is the last thing we should do.”
The senators also addressed one of Manchin’s critical concerns about the tax credit: it may be used to buy drugs by parents.
“91 percent of low-income households spent their funds on basic needs including groceries, utilities, housing, and school-related fees,” they said, citing census statistics.