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Tuesday, June 25, 2024

Expanded Child Tax Credit Bill Clears House Hurdle, Heads to Senate for Approval

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The House voted Wednesday night to pass a $78 billion tax package that includes an expansion of the child tax credit, sending it to the Senate, where its path is uncertain.

The Republican-led House passed the bipartisan measure 357-70, using a fast-track process that requires a two-thirds majority. The legislation received broad support from each party: 169 Republicans and 188 Democrats voted for it, while 47 Republicans and 23 Democrats voted against it.

But the bill does face opposition from a few corners, including liberal Democrats who object to the business tax breaks, right-wing Republicans who took issue with the child tax credit policy and New York GOP members who complained that it wouldn’t expand the $10,000 cap on federal deductions for state and local taxes.

The legislation now heads to the Democratic-led Senate, where it will need 60 votes to pass. It’s not clear that the votes are there.

Among the skeptics in the Senate is Chuck Grassley, R-Iowa, a member of the Finance Committee, who said directly Wednesday that he has concerns about the bill because it would make President Joe Biden “look good” in an election year.

Senate Majority Leader Chuck Schumer, D-N.Y., declined to say Wednesday when the tax bill would come to a vote and whether it would be amended.

“I support the tax bill,” Schumer told reporters. “I’m working with Sen. Wyden to figure out the best way forward.” Wyden is Sen. Ron Wyden, D-Ore., the chairman of the Finance Committee.

The legislation would expand refundable child tax credits, aiming to provide relief to struggling families, particularly parents with multiple children. It would incrementally lift the $1,600 refundable cap on the credit and adjust it for inflation. It would also resurrect some expired parts of the 2017 Republican tax cuts for businesses — including research and experimental expensing and small-business expensing.

House Ways and Means Committee Chairman Jason Smith, R-Mo., said before the vote that the bill was “pro-growth, pro-jobs, pro-American.”

“Parents in main street communities across this country will see lower taxes, more opportunity and greater financial security after we pass this legislation,” he said on the House floor.

Senate Minority Leader Mitch McConnell’s office said McConnell, R-Ky., is deferring to Sen. Mike Crapo, R-Idaho, the ranking member on the Finance Committee, to lead the Senate GOP response.

Crapo said he wants the bill to go through committee, where it can be revised, and to have “a floor process where all the members can file their amendments.” One change he said he wants is to eliminate the provision that would allow taxpayers to use a previous year’s income if it allowed them larger child tax credits.

“I think we need to fix the look-back requirement on the child tax credit so that we don’t diminish the work requirement. That’s one of them,” he said. “On the child tax credit, they’re allowing income earned in one year to be used in another year.”

“But I’m not discussing everything else,” he said. “We’ll see.”

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