Child Tax Credit Won’t Get ‘Work Requirement,’ Democrats Say

A work requirement would wreck the child tax credit's impact on child poverty.
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WASHINGTON — It looks like Sen. Joe Manchin (D-W.Va.) won’t prevail in his quest to deny child benefits to unemployed parents.

Democrats told HuffPost this week that they don’t expect a “work requirement” to be added to the child tax credit as part of the Build Back Better bill they’re hoping to pass in the next few weeks.

“We wanted to make sure there were no restrictions on low-income people,” Sen. Sherrod Brown (D-Ohio) told HuffPost. “No work requirement.”

“Work requirement” is a Washington term for excluding people who don’t have jobs from a given benefit. Manchin said he wanted work requirements for everything in Build Back Better, which Democrats envision as a legacy-defining bill to establish universal kindergarten and child care subsidies, promote green energy and broaden government health care coverage.

Too many new benefits, Manchin has argued, would foment an “entitlement society” of people who can’t help themselves.

“I believe government should be your best partner, but it shouldn’t be your provider,” Manchin said this week. “We have a moral obligation to provide for those who have incapacities, such as physical or mental. But everyone else should be able to help and chip in, so that’s my mindset.”

It appears Sen. Joe Manchin's request for a "work requirement" for the child tax credit won't make it into the Build Back Better legislation.
It appears Sen. Joe Manchin's request for a "work requirement" for the child tax credit won't make it into the Build Back Better legislation.
The Washington Post via Getty Images

Democrats used to be much more averse to providing direct cash benefits to poor people. But this year, as part of the American Rescue Plan, Democrats broke with their past by approving monthly payments of as much as $300 per child for practically every parent in America.

The payments have already cut child poverty, but are set to expire in December unless they’re extended. Manchin has said the program should include a work requirement and exclude more families with higher incomes.

But in recent days, Manchin has declined to say whether he is still insisting on a work requirement specifically for the child tax credit.

“We’re all still talking,” he told HuffPost on Tuesday. “We’re working hard.”

Before Congress expanded the child tax credit as part of the American Rescue Plan earlier this year, the credit had a work requirement ― people who had earned less than $2,500 in the previous tax year were ineligible for even a partial credit.

Bringing back that earnings requirement, and reducing payments for lower earners, would cut benefits for the families of some 27 million children, according to the Center on Budget and Policy Priorities. The work requirement would also put a huge dent in the antipoverty impact of the monthly payments.

“Taking away the full credit from children based on their parents’ earnings would needlessly leave in poverty — or push deeper into poverty — the children who need help the most, injuring their long-term health and educational outcomes and reducing their earnings as adults, while doing virtually nothing to boost parental employment,” the Center on Budget’s Arloc Sherman, Chuck Marr and Stephanie Hingtgen wrote in a September policy brief.

Even without a work requirement, Democratic leaders aren’t entirely getting their way. They previously wanted to make the tax credit permanent or at least to extend it through 2025; their current plan is to do it for only one year, and it’s likely they’ll agree to Manchin’s demands that the policy exclude more households with six-figure annual incomes.

Sen. Michael Bennet (D-Colo.) said his understanding of the deal is that the monthly payments would continue through 2022 with “full refundability.” The payments are technically advance tax refunds, and full refundability means there is no earnings threshold and parents can receive the full amount as cash.

“That resolves the question about whether the poorest people in the country are eligible for it,” Bennet said.

Rep. Richard Neal (D-Mass.), chair of the House Ways and Means Committee and the lead author of a House version of the Build Back Better Act, also said he thought the work requirement idea was off the table.

“It certainly hasn’t permeated the conversation in the last couple of days,” Neal said.

President Joe Biden has been meeting with lawmakers in an effort to strike a deal that will satisfy progressives, as well as Manchin and Sen. Kyrsten Sinema (D-Ariz.), who has also withheld support for Build Back Better.

Neal said he could “envision a series of trade-offs” to get the senators on board. It’s possible Manchin dropped his work requirement demand in exchange for the shorter continuation of the credit, plus stricter eligibility rules for high earners.

“One of the big challenges is trying to walk back your words,” Neal said. “So I think if you had something to show for walking back your words, that’s an accomplishment.”

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