Republicans Cool To Expanding Child Tax Credit As Part Of COVID-19 Relief

If Democrats want to slash child poverty, they may have to do it themselves.

Republican senators involved in bipartisan talks over another pandemic relief bill are unenthusiastic about Democratic proposals to expand the child tax credit.

Democrats have hyped the idea as a way to slash child poverty with monthly cash payments to parents, but Republicans seem to think of it as irrelevant to the health and economic crisis at hand. They also have concerns about its impact on the debt.

“In general, I think it should be a more targeted package,” Sen. Susan Collins (R-Maine) said Wednesday when asked whether a child tax credit expansion should be included in the next COVID-19 relief package.

“I’ll take a look at it but I just don’t know the full ramifications” of increasing the child tax credit, added Sen. Shelley Moore Capito (R-W.Va.), noting Republicans had already doubled the credit in their 2017 tax cut law.

Capito and Collins are two of the eight Republican members of a bipartisan Senate working group that jump-started negotiations on the last pandemic relief bill Congress passed. HuffPost reached out to spokespeople for the six other Republicans, but none responded to inquiries about whether they supported or opposed expanding the credit.

As part of a sweeping $1.9 trillion coronavirus relief plan, President Joe Biden proposed boosting the child tax credit’s maximum value from $2,000 to $3,600 and making it easier for families to get the credit as a cash refund. The package would also include another direct payment to households, extend federal unemployment benefits through September and raise the federal minimum wage to $15 an hour.

Republicans have dismissed the overall Biden plan as too broad, though some expressed support for another round of direct payments, and others, such as Sens. Mike Lee and Mitt Romney of Utah, have recently supported expanding the child tax credit. But the Biden child credit proposal does not seem to be breaking through as an item both parties can agree on for the next pandemic bill, and disagreements abound.

Sen. Susan Collins (R-Maine) speaks with reporters in the Senate subway after a vote in the Capitol on Jan. 26, 2021.
Sen. Susan Collins (R-Maine) speaks with reporters in the Senate subway after a vote in the Capitol on Jan. 26, 2021.
Bill Clark via Getty Images

The idea of attaching a minimum wage hike to the package has also generated significant GOP opposition. Collins and Sen. Lisa Murkowski (R-Alaska), two moderates seen as most willing to support Biden’s agenda, maintain that increasing the federal minimum wage is unrelated to coronavirus relief.

“It’s unnecessary,” Murkowski told reporters on Wednesday. “It just complicates politically an initiative that we should all be working [on] together.”

Democrats have signaled their intention to go it alone on another COVID-19 relief bill if they cannot gain enough Republican support to break a filibuster. They can pass such a spending bill with just 51 votes under an arcane process called budget reconciliation, which Republicans used to pass their $2 trillion tax cut bill, as well as several other priorities.

“We must not repeat the mistakes of 2008 and 2009, when Congress was too timid and constrained in its response to the global financial crisis,” Senate Majority Leader Chuck Schumer (D-N.Y.) said in a floor speech on Wednesday. “Congress must pursue a bold response to the prevailing crisis of our time.”

Congressional Democrats have been enthusiastic about the Biden package, and particularly its tax credit provisions, which resemble proposals Democrats passed in the House as part of an unsuccessful pandemic messaging bill last year.

The big idea would be to take the child tax credit ― which offsets tax bills for 90% of households with children but delivers refunds only to those with limited incomes ― into a guaranteed cash payment for everyone beneath a certain income level. And instead of delivering a lump sum after tax time, the Internal Revenue Service would pay the benefit on a monthly basis, essentially transforming the tax credit into the kind of child benefit that other advanced countries have used to achieve lower child poverty rates.

But the White House didn’t mention the monthly payment concept in the 19-page outline of its overall relief plan, and the Biden administration hasn’t spoken about it even as top Democrats trumpet the idea.

Democrats don’t need Republican votes to increase the child tax credit as long as they are united behind the idea and pass it via reconciliation in their COVID-19 package.

One reason Democrats tinker with tax credits as social policy is that it helps them dodge Republican accusations that they’re fostering “Big Government,” since the credits are technically tax cuts. Former House Speaker Paul Ryan (R-Wis.), for instance, once supported making it easier for people without children to get cash from the earned income tax credit ― another idea Democrats and the Biden administration have included in their COVID-19 plans.

Republicans aren’t playing along. Sen. Bill Cassidy (R-La.), another of the Republicans in the working group, said he was “interested in looking at” the earned income credit, but not that interested.

“I’m not sure it should be part of a COVID package,” he said.

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