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Child tax credit talks quietly percolate amid advocates’ push

Romney suggests senators could next turn focus to reviving credit

Sen. Mitt Romney, R-Utah, speaks with reporters as he leaves the Senate floor on Dec. 7, 2021.
Sen. Mitt Romney, R-Utah, speaks with reporters as he leaves the Senate floor on Dec. 7, 2021. (Bill Clark/CQ Roll Call)

Sen. Mitt Romney on Tuesday suggested a bipartisan group of senators who’ve struck other deals to move legislation through the evenly divided chamber could next turn their focus to reviving an expanded child tax credit after a more generous version lapsed last month.

The Utah Republican, who has his own outline for expanding the family benefit, said at a virtual American Enterprise Institute event that he’s discussing the issue with colleagues across the aisle while the fate of Democrats’ proposed expansion remains uncertain.

Democrats are still pressing for their own plan, which faltered after Sen. Joe Manchin III, D-W.Va., nixed the broader budget reconciliation package known as “Build Back Better” in its current form. But some Democrats have complimented Romney’s proposal, which would move in their direction by dropping work requirements that have marked recent GOP alternatives.

“Now that Build Back Better is in limbo or worse, there’s a growing series of discussions going on among members of the Senate at least, but also members of the House to say, ‘OK, let’s go back and look once again at family security and children and think about a way that we might pass something on a bipartisan basis,’ ” Romney said.

Romney said while many Democrats view the child tax credit as an anti-poverty program, he and GOP colleagues also view it as a way to make sure people who want to can have children and keep the U.S. population from shrinking.

His plan, which hasn’t been formally introduced as legislation, would transform the child tax credit into a Social Security Administration program, pay benefits in monthly checks of up to $350 per child, and make it fully available for individuals making up to $200,000 per year or couples who file taxes jointly making up to $400,000.

A new ‘gang’?

Romney would offset his proposal — which he estimates would cost about $230 billion annually — by getting rid of or limiting other assistance for low-income families and scrapping the $10,000 state and local tax deduction.

He acknowledged Tuesday that how to pay for the expansion would be the biggest sticking point with Democrats, who don’t want to pare back other anti-poverty programs and, for some, favor enlarging the SALT deduction.

Romney said he’s been talking with Manchin and other Democrats who he declined to name about the child tax credit. He pointed to the possibility of work by an evolving bipartisan group of senators who’ve negotiated pandemic relief and last year’s infrastructure law, and are currently discussing election overhaul measures.

“When you work in a bipartisan basis, there’s got to be give and take,” he said.

The expansion included in Democrats’ March 2021 COVID-19 relief package raised the value for people at lower income levels, made the credit fully available to people who owe little or no income taxes and paid half of the benefit in advance monthly installments of up to $300 per child.

At the time the last payments under the expired program went out in mid-December, the Treasury Department estimated more than 36 million households with over 61 million children received credits. The average payment was $444 in December; states with more children per household received higher payments, topping out at $530 in Utah.

Work requirements

Romney said he’s also open to a limited form of work requirements in order to attract support from other Republicans who’ve backed expanded child tax credit proposals. He suggested some proof of work before a child’s arrival could be a compromise, but expressed concern that some mandates could penalize families when a parent chooses to stay home to raise children.

Romney also said he’s open to lowering the income eligibility threshold for full benefits to below $400,000, and setting a lower income bar for those receiving the benefit in monthly installments. Manchin has pressed for both as conditions for ultimately winning his support.

A bipartisan effort may be more likely to win support from Manchin, who’s touted work with Republicans as producing better results. Still, Democratic child tax credit proponents say they want to move ahead with extending their party’s 2021 benefit boost without changes.

Manchin has said the program should have a work requirement and be better targeted to people with less income. Under current law, it begins phasing out for individuals making $200,000 per year or couples filing taxes jointly who make more than $400,000.

Manchin also pressed for lower total spending in the budget package and funding fewer programs for a full decade or longer, both demands that complicate the child tax credit expansion, which represents a significant chunk of the package’s cost. The one-year cost of the 2021 credit expansion was $109 billion, the Joint Committee on Taxation estimated; extending full refundability and other features permanently could cost $1.6 trillion unless other offsets or benefit trims are included.

One child credit advocate, Sen. Michael Bennet, D-Colo., said at a Tuesday news conference that he doesn’t believe Manchin has closed the door to discussions on an expanded credit moving as part of the reconciliation bill. Bennet said proponents of the more generous credit are open to means-testing it, for example.

“I think we would all agree that we’d all be comfortable with the income level being lower than it has been,” he said. “I certainly would.”

The group of child credit advocates who spoke Tuesday — which also included Sens. Raphael Warnock of Georgia, Cory Booker of New Jersey and Sherrod Brown of Ohio along with Reps. Suzan DelBene of Washington and Rosa DeLauro of Connecticut — was less open to work requirements. They said it’s critical that people with disabilities, parents caring for children with disabilities, single mothers and grandparents get full access.

“The scripture says, ‘Woe to those who crush the poor,’” said Warnock, a pastor at Ebenezer Baptist Church in Atlanta who’s facing a tough reelection fight this year.

He cited a lack of work requirements for some tax cuts in Republicans’ 2017 tax overhaul that benefited well-off households.

“This is a tax cut. It’s just for ordinary people,” Warnock said.

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