Democrats are making ultimate efforts to save a key part of their ambitious tax and spending bill, days after Senator Joe Manchin torpedoed the $ 1.7 trillion package.
Lawmakers see a more generous version of the child tax credit – first established in March with the passage of the US bailout – a centerpiece of their platform ahead of the 2022 midterm election and hope to extend the program for at least a year. .
The stimulus bill increased the credit to $ 3,000 from $ 2,000 for the 2021 tax year, but it is set to expire this year. The first half was delivered in monthly payments from July to December with $ 300 for children under six and $ 250 for those aged 6 to 17, but the last check was mailed last week. The second half will be paid as a lump sum when families file their 2021 tax returns in the spring.
IRS OFFERS FINAL TAX CREDIT FOR 2021 CHILDREN TO 36M FAMILIES
Supporters hailed the program as a vital tool in the fight against poverty. If the improved credit is not extended, about 10 million children are at risk of falling 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 credit.
Democrats are exploring the possibility of splitting the bill and passing parts of it separately, which would almost certainly include the expanded child tax credit. Still, House Speaker Nancy Pelosi threw cold water on the idea, suggesting it would reduce Democrats’ bargaining power in the Senate, where they are limited in how often they can pass bills. using the budget reconciliation process.
Senate Finance Chairman Ron Wyden, D-Ore., Told lawmakers last week that the IRS needs an extension by December 28 in order to make a monthly payment on January 15, a increasingly improbable feat. The Biden administration said it was exploring the possibility of a double payment in February to give Democrats more time to find a solution.
“We want to do everything humanly possible to keep the child tax credit on track,” Wyden said last week.
Yet even if Democrats agree to a plan to extend the tax credit, they will have to win the support of an increasingly skeptical Manchin.
Manchin, DW.Va., on Monday introduced some changes to the bill that could garner his support, including limiting families who receive the increased child tax credit. Speaking in a radio interview in his home state of West Virginia, a day after he crushed the $ 1.7 trillion bill, Manchin insisted the program must have work requirements as well as resource testing so that anyone earning more than $ 200,000 is not eligible for the money.
“Make sure the people who need it get it, that’s all,” he said in an interview with MetroNews in West Virginia, suggesting Americans should be required to show a W -2 in order to receive the extra money.
The full tax credit currently goes to people earning $ 75,000 or less, married couples earning $ 150,000 or less, and a single parent filing as head of household earning up to $ 112,500.
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Democrats are trying to strike a delicate balance in order to gain the support of their 50 caucus members, which is necessary to pass legislation without any Republican votes.
A source familiar with the matter told FOX Business that Manchin and Biden spoke on the phone Sunday evening, hours after the West Virginia Democrat told “Fox News Sunday” he could no longer support the project. Build Back Better law. The call suggests that despite heightened tensions between the president and Manchin, the two may consider resuming negotiations on the spending bill.
Had Biden succeeded in pushing through the proposal, Congress would have approved $ 5,000 billion in spending in less than a year since taking office, an unprecedented level. The country’s debt level has already reached an all-time high of 29 trillion dollars and is on the way to surpassing 30 trillion dollars.