President Joe Biden has made another attempt to bring back the expanded Child Tax Credit. The landmark stimulus check was part of the American Rescue Plan Act and was responsible for ultimately helping 65 million children, keeping close to 4 million of them out of poverty.
The expansion of the pandemic relief program under Biden delivered hundreds of dollars into the bank account of parents every month between July and December 2021. The expanded Child Tax Credit was heralded as among the most significant policy achievements under the Democrats led by Biden. Nancy Pelosi, then House Speaker, had described its expiration as a really important leverage for pushing through the rest of the agenda under the broader Build Back Better negotiations.
But by January 2022 it became clear that all attempts to pass the President’s agenda would have to step around the Child Tax Credit part. Irreconcilable differences crept up within the Democrats as Senators Joe Manchin and Kyrsten Sinema, backed by powerful lobbies, scuttled attempts by President Biden to push through the CTC payments in a Senate split right down the middle. When the Inflation Reduction Act was finally passed in July 2022, it did not include the Child Tax Credit. Now Child Tax Credit payment advocates say that they aim to look ahead.
President Biden’s 2024 Fiscal Budget Proposes Reinstatement Of Child Tax Credit
Moving ahead to the end of the first quarter of 2023, President Biden has renewed calls for a fresh round of enhanced Child Tax Credit payments for parents. This is part of the family policies in his budget that he unveiled this week.
But again it might not be easy to get Congress to sign off on his terms. It promises to be more difficult as the Republicans have taken control of the House of Representatives.
Among the host of proposals for fiscal 2024 aimed at helping families is one key plan – the reinstatement of the enhanced child tax credit that in 2021 gave qualifying parents up to $3,600 a child through the American Rescue Plan Act.
Biden has called for raising the present maximum amount of the Child Tax Credit from $2,000 per child to $3,600 per child under the age of 6. For children between 6 and 17, the amount was $3,000 per child.
The proposed fiscal 2024 budget has also raised the issue of permanently making the Child Tax Credit fully refundable. That would mean that families would still be eligible for the payment even if their tax liability was less than the credit amount.
The enhanced Child Tax Credit included a monthly payment of up to $300 per month that was paid in the last two quarters of 2021 as an advance against the income tax return to be filed in the first quarter of 2022.
The payments brought poverty to half the level it was before the payments began. It was the lowest level in the history of the US, the president said in a speech on the budget on Thursday.
Advocates of the payment have expressed their happiness and said that they were relieved that the White House had redoubled its efforts to support this direct program of cash payment.
The move to develop the credit would be supplemented by other policy proposals that are part of the budget proposed by President Biden. It is aided at helping both families with children and also individual citizens. The Earned Income Tax Credit would also be permanently expanded to include childless workers if the proposals go through. The goal is to keep low-paid workers of every section out of the grip of poverty.
The plan entails twelve weeks of medical and family leave. It also proposes seven paid sick days for every worker. There are also plans to expand access to include affordable childcare and free preschool.
There are also plans for expanding Medicaid Home and community-based services. It would allow disabled and older individuals to stay at home and provide relief for family caregivers and home care workers.
The president stressed that the proposed budget would support millions of parents and help them rejoin the workforce if they are reassured that their children would be taken care of. But the possibility of the proposed budget falling through remains strong as it will be very difficult for Biden to get it through Congress, particularly the House of Representatives.
President Biden Strives To Slash Deficits And Increase Benefits
With the budget, the president is planning to bring down deficits by close to $3T over the next decade. Three of the major proposals, including the expansion of the Child Tax Credit to reach the 2021 level for 3 years, the monthly payment option, and making it fully refundable would alone entail a cost of over $429B over the next ten years.
The expansion of the Earned Income Tax Credit for workers without qualifying children would cost an additional $156B. But research also points to the fact that the spending by the government will have many beneficial effects.
For every dollar spent on the Child Tax Credit payments, there would be a resultant 10-dollar gain in the benefits accrued to society. This was revealed by research conducted by the Center on Poverty and Social Policy of Columbia University. There is strong public sentiment supporting the proposal. It remains widely popular even more than a year after it ended.
It became even more important as inflation played havoc with the financial planning of families, especially in the low and moderate-income groups. Prices have gone up relentlessly throughout the year and everyday goods and gasoline prices have gone up at the highest rate in over 4 decades.
But there are some, especially the Republicans, who argued that direct stimulus checks such as the enhanced Child Tax Credit would fuel another round of inflation and lead to further increases in prices.
But experts say that the Child Tax Credit was not big enough to have any impact on rising prices. But on the other hand, it was big enough to help families meet rising costs. Over 200 economists have sent an open letter to Congressional leaders and have called for renewing the expanded Child Tax Credit of 2021. They have stressed that it would help low and moderate-income families cope with rising prices and also help promote the American economy.