Research shows that a tax policy bill shot down by Senate Republicans this week would have helped bring 500,000 children out of poverty, according to the Center for Budget and Policy Priorities (CBPP).
On Thursday, August 1, Senate Republicans blocked the Tax Relief for American Workers and Families Act, with 48 voting in favor to 44 opposing. It needed 60 votes to pass, in which case it would have expanded child tax credit and allowed tax breaks for businesses. Earlier this year, the House approved the bill for the Senate’s review with 357 votes in favor.
If passed, the bill would have expanded eligibility for the child tax credit among the lowest-income families and adjust payments for inflation for the 2024 and 2025 tax filing years, as well as retroactively boosting the refundable portion for 2023.
The expansion would have been in effect for three years, and would have cost roughly $33 billion, as per the Congressional Budget Office. The CBPP said it would have lifted as many as 400,000 children above the poverty line in its first year, as well as making an additional 3 million children “less poor as their incomes rise closer to the poverty line.”
Once the proposal came into full effect in 2025, it would see an additional 100,000 children brought out of poverty. For 2024, a family of four with a combined income of $31,200 or under are considered to be living in poverty, according to the U.S. Department of Health and Human Services.
More than 1 in 5 U.S. children would have been affected by the change, the CBPP reported in January this year. Of the approximate 16 million children who would have benefited in the first year, half live in families that would have gained $630 or more, and 25 percent live in families that would have benefited from $1,400 or more.
Earlier this year, CBPP’s Chuck Marr, an expert on federal tax policy, told Newsweek: “This bipartisan proposal rightly focuses on the roughly 19 million children who today are left out of the full Child Tax Credit because their families’ incomes are too low. This proposal would increase the credit for more than 80 percent of these children—about 16 million children—lifting as many as 400,000 children above the poverty line in the first year and making an additional 3 million children less poor.”
Following the approval of the bill by the House in January, House Ways and Means Committee Chairman Jason Smith, a Missouri Republican, and Senate Finance Committee Chairman Ron Wyden, an Oregon Democrat, hailed the agreement as a “common sense, bipartisan, bicameral tax framework that promotes the financial security of working families, boosts growth and American competitiveness, and strengthens communities and Main Street businesses.”
Republicans defended striking down the bill, saying that more work needed to be done to get GOP senators on board.
“While there are plenty of provisions in this bill that my colleagues and I support, the proponents have known this since before it was released—that Senate Republicans would need to change the bill in order to gain substantial bipartisan support,” Mike Crapo, Idaho, a ranking Republican member on the Senate Finance Committee, said on the floor.
“It has been months since any real attempt at engagement of outreach has taken place, which suggests that my colleagues are not actually serious about passing a bill, but are instead focused on election-year messaging,” Crapo added.
Democrats on Capitol Hill criticized Republicans for the blockage, with Senate Majority Leader Chuck Schumer saying: “They hope that, if things go their way, they can get a more conservative package sometime in the future. And they’re willing to walk away from expanding programs like the Child Tax Credit along the way.”
What Was in the Bill?
The Tax Relief for American Workers and Families Act would have legislated the following:
- Enhanced child tax credit access: a gradual rise in the refundable segment of the child tax credit would be implemented for the years 2023, 2024 and 2025.
- Penalties removed for larger families: to ensure equitable application of the child tax credit phase-in to households with multiple children.
- A one-year income lookback: aimed at providing taxpayers with the flexibility to use either their current or prior-year income for calculating child tax credit in 2024 or 2025.
- Inflation-adjusted relief: adjusting the tax credit for inflation, starting in 2024.
The post Republican Child Tax Credit Block Keeps 500,000 Kids in Poverty—Study appeared first on Newsweek.
