Democrats Make Last-Ditch Effort To Bring Back Cash Payments For Parents

Their gambit is to pair child tax credit payments with an extension of expiring corporate tax breaks.
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WASHINGTON – Several House and Senate Democrats are trying to bring back monthly cash payments to parents as part of a year-end government funding bill that Congress may pass in the coming weeks.

It’s not clear how the group can overcome the same obstacle that blocked a continuation of the payments last year, namely opposition from Sen. Joe Manchin (D-W.Va.) and every Senate Republican.

Nevertheless, the group held a press conference Wednesday touting its efforts. The Democrats’ plan is to withhold support from business tax breaks in order to win support for a child tax extension.

“No corporate tax cuts without the child tax credit,” said Sen. Sherrod Brown (Ohio), flanked by Sens. Cory Booker (N.J.), Michael Bennet (Colo.) and Reps. Rosa DeLauro (D-Conn.), Suzan DelBene (Wash.) and Richie Torres (N.Y.).

The expanded child tax credit paid most parents in the U.S. as much as $300 per child each month from July through December 2021. It represented an American experiment with the kind of child allowance that most other rich countries have given parents for decades.

The money significantly reduced material hardship for families, pushing child poverty to its lowest level ever.

“There is no other policy that we have enacted here in Washington, D.C., that has done so much for so many so quickly,” Torres said.

But Democrats were unable to extend the benefit into this year because they couldn’t get Manchin on board. The payments stopped and child poverty went back up.

There’s a problem with the plan of hitching the tax credit to other tax policies and then sticking the whole package to a broader government funding bill: the funding bill itself might fail to materialize.

“We need an omnibus to do this,” Brown told reporters after the event, referring to an omnibus spending bill that would fund the government through next year.

And Democrats will need to win over at least 10 Republicans, since the funding bill would pass using regular Senate procedures rather than the special budget rules Democrats used to pass a bill in September with only 50 votes.

Adding a tax extender package to an omnibus funding bill would also cost a lot of money, something that Republicans occasionally resist. The child tax credit by itself costs $100 billion a year.

But business groups are clamoring for Congress to restore a tax benefit for research and development costs, one of several corporate tax breaks enacted in 2017 that have begun to expire. So Democrats do have some leverage for their family benefit demands.

And to mollify Republicans, they could try to move a smaller version of the child tax credit, either by excluding some households or delivering smaller benefits. Brown declined to get into possible changes Democrats might accept, but insisted the trade could work.

“The business community is weighing in more and more, saying, ‘Do it!’ But the Republicans are so far dug in and we’re gonna keep pushing,” Brown said.

Senate Majority Leader Chuck Schumer (D-N.Y.) said Wednesday that the child tax credit would remain a priority for Senate Democrats next year when they have a 51-seat Senate majority instead of just 50.

“I’m not going to speculate on what we’re gonna do in the next Congress,” Schumer said. “Just in general, the child tax credit is something many of us are passionate about and we would very much like to get it done.”

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