One of Biden’s presidency’s great successes yet great failures too was the expanded child tax credit.
Child Tax Credit
The American Rescue Plan Act, as enacted in March 2021, It was expanded assistance, with direct payments to most eligible American families every year between July and December of 2021. According to multiple studies, the credit delivered successfully in a dramatic decrease in child poverty.
However, the Child Tax Credit was set to end after one year, and the Build Back Better Act, a massive spending package was extended by one year. Sen. Joe Manchin (D-WV) expressed his opposition which leads to failure to pass the Senate and the child tax credit return to its pre-2021 state, removing the direct payments when 2022 starts. As a result, the progress on reducing child poverty has been revised.
The Inflation Reduction Act, a version of Build Back Better was revised it did not include the credit, passed earlier this year. Manchin’s opposition as well as rising inflation leads the White House from revisiting the expanded child tax credit idea this year. The possibility proposed by Sen. Mitt Romney of Massachusetts in 2021, of a compromise could be reached between the child tax credit and the “child allowance”. However, there are speculations to bring the credit back, although not quite in its original form.
Biden Supports Child Tax Credit
News from Politico, that the House has “privately signaled to Democrats that contains to support a compromise deal to in bringing back the expanded Child Tax Credit, even if it includes tons of work requirements it once rejected.”
The idea would be to pass it during the remaining two weeks of the lame-duck session, as part of a “year-end legislative package.” It’s not clear what form any such deal would take. It could be one possibility is a bipartisan deal in which Democrats get the child tax credit, while Republicans receive corporate tax breaks. At the end of the year, an omnibus spending agreement would potentially include all. Furthermore, President Biden eagerly supports the Child Tax Credit expansion he signed into law.