Democrats ‘not ready to throw in the towel’ on child tax credit

Manchin said no one has tried to restart negotiations with him, however

Rep. Richard E. Neal, D-Mass., conducts a news conference in the Capitol Visitor Center after the House passed the budget reconciliation package on Nov. 19, 2021. (Tom Williams/CQ Roll Call)
Rep. Richard E. Neal, D-Mass., conducts a news conference in the Capitol Visitor Center after the House passed the budget reconciliation package on Nov. 19, 2021. (Tom Williams/CQ Roll Call)
Posted January 20, 2022 at 3:17pm

Top Democratic tax writers remained optimistic Thursday about restoring a more generous version of the child tax credit that sent monthly checks to families after President Joe Biden admitted he’s “not sure” he can get the votes to pass it. 

House Ways and Means Chairman Richard E. Neal, D-Mass., told reporters he's "not ready to throw in the towel" on renewing the expired child tax credit expansion from 2021 that allowed families to get monthly checks of up to $300 per child and he doesn't believe Biden is either. 

“We're gonna fight like hell for it,” Senate Finance Chair Ron Wyden, D-Ore., added. “It's particularly important right now because it's a tangible benefit at a time when families have extra expenses as a result of omicron."

At a news conference Wednesday, Biden said Democrats would have to break up the House-passed $2.2 trillion climate and social spending package to get “chunks” of it through the Senate amid opposition from Sen. Joe Manchin III, D-W.Va., to the full package. Democrats are using the budget reconciliation process to get around the Senate’s 60-vote threshold for ending a filibuster, and they need Manchin’s support to pass a reconciliation package with a simple majority vote. 

The president called out the child tax credit expansion as a big component of the package that he feels strongly about but that may not survive in the final version. 

Manchin on Thursday reiterated that no one has tried to restart negotiations with him since he announced his opposition to the $2.2 trillion package a month ago, but he’s “happy to talk to whoever wants to talk." 

He said he wants to see high inflation rates drop and the COVID-19 pandemic abate before he’d support another big spending package, calling into question whether such negotiations would be fruitful. 

Manchin also made clear that whatever he committed to support in last year’s talks no longer applies. “We'll just be starting from scratch,” he said. 

Asked specifically about the child tax credit expansion and whether that needs to be dropped from the package before he’d back it, Manchin appeared defensive. 

"No, no. We're not — guys we're not talking about — we're not going to negotiate with you,” he told reporters. “I don't know why you keep asking." 

Manchin did, however, confirm he still wants to impose a work requirement for families to claim the expanded credit. He has also previously suggested narrowing the eligibility to lower-income families. 

Neal called on Manchin to explain what provisions he favors rather than opposes but said he sees "some room" to tweak the child tax credit to meet Manchin's demands.

Wyden, asked about Manchin’s idea to require families to submit a W-2 form to show proof of earnings to qualify for the credit, seemed open to compromise as well. 

“I know that a couple of experts in the field have raised it and I’m certainly looking at it,” he said. “I have spent a lot of time trying to come up with ideas and approaches on the child tax credit that will get us to 50 votes, and I continue to do that.”

Wyden said Finance members Sherrod Brown, D-Ohio, and Michael Bennet, D-Colo., have and will continue to lead negotiations on the child tax credit. 

Bennet told reporters that he’ll “fight tooth and nail” to keep the benefit as part of the larger budget package. He said he’s willing to further limit access to the full credit below the current thresholds of $400,000 for married joint filers and $200,000 for individuals, but he was less open to work requirements. 

A minimum earnings requirement would likely be incompatible with making the credit fully refundable. Democrats’ 2021 expansion allowed people who owe no income tax to still get the full benefit and the House-passed package would have made that provision permanent despite only extending the expanded credit for a year. 

“One thing that I’d be very, very reluctant to do is to change the full refundability because that’s been so important for working families and poor families,” Bennet said.

Speaker Nancy Pelosi cited the expanded child tax credit, along with funding for universal prekindergarten and child and home health care subsidies, among provisions “that have to be contained in the bill.”

“So what the president calls chunks I would hope would be a major bill going forward,” the California Democrat said. “It may be more limited, but it is still significant.”

While most Democrats remain convinced they can negotiate with Manchin, at least one senator who caucuses with them is skeptical. 

"We've been negotiating for five months. That approach has failed miserably,” Senate Budget Chairman Bernie Sanders, I-Vt., said. “We've got to move in a new direction."

Sanders did not say what that new direction should be. But if Democrats decide not to negotiate with Manchin on a partisan reconciliation package, their only other option is to try to get Republican support for various provisions and advance them under regular order. 

Wyden dismissed that path, noting “[Senate Minority Leader] Mitch McConnell has said there isn't going to be any bipartisan cooperation."

Neal has been more receptive to bipartisan negotiations on the child tax credit. 

“The reality here is with Mitt Romney and evangelicals as well, it’s very popular,” he said. “So I don’t understand why we can’t find an accommodation, which I think we will.”

Jennifer Shutt contributed to this report.