The Democrats are making final efforts to save a vital part of their ambitious tax and spending bill days after Senator Joe Manchin torpedoed the $ 1.7 trillion package.
Legislature sees a more generous version of the child tax credit – first introduced in March with the passage of the American bailout plan – as the centerpiece of their platform ahead of the 2022 midterm elections and hopes to extend the program for at least a year.
The stimulus bill increased the loan from $ 2,000 to $ 3,000 for the 2021 tax year, but it’s slated to expire this year. The first half came in monthly installments from July through December at $ 300 for children under six and $ 250 for children ages 6-17, but the final check was mailed last week. The second half will be delivered as a lump sum when the families submit their tax return in spring 2021.
IRS TO DELIVER FINAL CHILD TAX CREDIT PAYMENT TO 36 MILLION FROM 2021 FAMILYS
Proponents have hailed the program as an important tool in the fight against poverty. If the increased credit is not granted, there is a risk that an estimated 10 million children will fall below the poverty line, according to an analysis by the Center on Budget and Policy Priorities, a progressive think tank. Another 27 million will lose all or part of the loan.
The Democrats are exploring the possibility of breaking the law and getting parts of it passed separately, which would almost certainly include the expanded child allowance. Still, House spokeswoman Nancy Pelosi has tossed cold water on this idea, suggesting that it would detract from the bargaining power of Democrats in the Senate, where they limit the number of times they can pass bills through the budget reconciliation process are.
Senate Finance Chairman Ron Wyden, D-Ore., Told lawmakers last week that the IRS needs an extension to December 28 to make a monthly payment on January 15, an increasingly unlikely feat. The Biden government has announced that it will look into the possibility of a double payment in February to give the Democrats more time to come up with a solution.
“We want to do everything humanly possible to keep the child allowance on track,” said Wyden last week.
But even if the Democrats approve a tax credit extension plan, they must win the support of an increasingly skeptical Manchin.
Manchin, DW.Va., outlined some changes to the bill on Monday that could garner his support, including limiting which families can get the increased child tax credit. During an interview with a radio station in his home state of West Virginia, the day after crushing the $ 1.7 trillion bill, Manchin insisted that the program must have both work requirements and means tests in order for anyone to do more than $ 200,000 is not entitled to the money.
“Make sure the people who need it get it, that’s all,” he said during the interview on West Virginias MetroNews, suggesting that Americans should show a W-2 for the extra cash.
Full tax credit currently goes to individuals earning $ 75,000 or less, married couples earning $ 150,000 or less, and a single parent filing as a householder who makes up to $ 112,500.
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The Democrats are trying to strike a delicate balance to secure the support of all 50 members of their caucus necessary to pass laws without a Republican vote.
A source familiar with the matter told FOX Business that Manchin and Biden spoke on the phone Sunday night hours after the West Virginia Democrat told Fox News Sunday that he could no longer support the Build Back Better bill. The call suggests that despite heightened tensions between the president and Manchin, the two may consider resuming negotiations on the spending bill.
If Biden had managed to get the proposal passed, Congress would have approved a staggering $ 5 trillion in spending in less than a year since he took office, an unprecedented level. The nation’s debt is already at an all-time high of $ 29 trillion and is expected to top $ 30 trillion.