The House Democrats would like to extend the Biden child tax credit up until 2025.
This could cause a conflict with Senate Democrats, who may be looking for a shorter timeline.
The benefit program provides cash to the vast majority of American families.
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The House Democrats are pushing to renew the child tax credit up through 2025. This could cause a conflict with their Senate counterparts, who want a shorter extension of the $3.5 trillion social spending plan.
The Democratic plan released by the House Ways and Means Committee on Friday night aligns with President Joe Biden's spring proposal: It would keep the benefit bulked up for an additional four years and guarantee that the credit can be issued monthly to the vast majority American families.
The bill would allow low-income families that don't have enough income to pay taxes to access the full benefit permanently. This is called full refundability. The bill also includes low-income housing tax credits and an expansion of Medicaid coverage. Prescription drug reforms authorize the federal government negotiate lower prices for seniors.
"Taken together these proposals expand opportunity and support our efforts for building a healthier and more prosperous future for America," said Richard Neal, Massachusetts' chair of the Ways and Means committee.
The child tax credit provides $300 per month for children aged 5 and below, or $3,600 annually. Children between 6 and 17 years old can receive $250 per month or $3,000 annually.
The credit was converted by the Democratic stimulus law into a monthly cash benefit for one year. Its amount has been increased from $2,000. Full payments are available to individuals earning $75,000 or less and couples earning $150,000 or less.
Singles can get the benefit at $200,000, and couples at $400,000. These thresholds remain unchanged in the House Democratic plan.
However, Senate Democrats are looking at extending the extension to 2024 as a presidential election year. They haven't yet decided if they will make the money fully refundable after that. They want to keep the legislation's top priorities, such as a Medicare benefit extension and medical and paid leave expansion, and a tuition-free community college.
The provision could be fought over by the Senate and House Democrats, as well as the small amount of money that is available for its funding. This is similar to another battle on expanding Medicare benefits and making federal subsidies permanent for Affordable Care Act coverage.
The House Democratic timeline would allow this benefit to expire along with a list of tax cuts from 2017 Republican tax law. Congress would need to address both them simultaneously. This could make it more difficult for Republican lawmakers to support the renewal of the child allowance, in exchange for Democrats expanding components of the GOP tax code.
The Democrats are ready to push through the anti-poverty legislation through reconciliation. This requires only a simple majority, and allows for a way to bypass unanimous Republican opposition. The bill can only be passed if Democrats are able to afford three Senate defections and none in the House.
The bill is being assembled by the House committees. However, the child tax credit renewal remains subject to change while Democrats wrangle over its size and scope.
