Politics Biden's Child Tax Credit seems like it should be a political slam dunk, but it's getting scaled back anyway
Bernie’s Tax the Rich Bluff Just Got Called by His Fellow Dems
The Democratic party has been tearing itself to pieces debating whether its latest reconciliation bill should spend $3.5 trillion or $2 trillion or even $1.5 trillion. Less noticed, but perhaps more important, has been the quiet death of the progressives’ bold “tax the rich” utopia. For years, socialists and progressives such as Bernie Sanders and Elizabeth Warren have enticed voters with free-lunch promises of a European social democracy financed mostly by new taxes on millionaires and large corporations. Now that Democrats have full control of the White House, House, and Senate, they can no longer blame Republicans for blocking these taxes.
As government policy changes go, it's hard to find one that helps millions of Americans as rapidly and directly as President Joe Biden's
Since its temporary enactment in Biden's $1.9 trillion Covid relief bill in March,up to $300 per child each month, according to the administration. For 90% of them, the money goes directly into their bank accounts from the Treasury.
"A tax cut for middle-class people," Biden told a CNN town hall on Thursday. And because it's fully available to households with little or no income, the President boasted in Pennsylvania a day earlier, the expanded credit has cut child poverty in the US by 50%.
Expanded child tax credit contains almost no tax cuts
Democrats’ rhetoric about their expansions of the child tax credit increasingly insists that these new benefits amount to “tax cuts” for middle-class families. As one article recently put it: “In speeches, internal memos, and campaign-style videos, President Joe Biden and the Democrats are increasingly promoting the payments as a ‘tax cut’ for the middle class, rather than a spending program that benefits only lower-income families.” But that characterization is sharply at odds with the proposal’s actual effects, which Democrats would extend for four years as part of their $3.5 trillion budget reconciliation package.
Its striking impact makes all the more remarkable what's happening in the emerging Democratic compromise on Biden's economic agenda. Within a sprawling bill not clearly identified with any specific policy objective,back, just like a myriad of others.
That partly reflects the breadth ofwho in the same bill seek to expand Medicare, add years to public education and implement strategies to fight climate change. But it also shows the challenge for elected officials in cutting through the fog of political information even while putting cash in voters' pockets.
To save child credit expansion, Democrats ready shorter renewal
Democrats are facing the possibility of a much shorter extension of an expanded child tax credit they’ve touted than many had hoped, which could ultimately stave off cuts to other aspects of the benefit they are fiercely defending. As negotiators work to trim the House’s budget reconciliation bill from a $3.5 trillion-plus package to somewhere closer to […] The post To save child credit expansion, Democrats ready shorter renewal appeared first on Roll Call.
Advocates cite multiple reasons for the expanded credit's underwhelming political footprint. They include its link to the pandemic that voters want to leave behind and an intra-party debate on Capitol Hill focused more on the legislation's price tag than its benefits.
"We've done almost nothing to champion this," complained Sen. Michael Bennet of Colorado, a leading Democratic proponent. Parents who have benefited, he added, "are profoundly grateful. They don't know who to be grateful to."
Neither the Child Tax Credit nor the $1,400 per person Covid-relief checks Biden and congressional Democrats included in the American Rescue Plan have prevented Biden's approval rating from sagging under the weight of events. Worries about the persistent pandemic, a spike in the price of gasoline and other basics, and theof high-demand goods have seized public attention even as the economy recovers and unemployment falls.
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"For many voters, simply getting more money back from the government isn't necessarily a cure-all for the challenges they see around them," explained Republican pollster Kristen Soltis Anderson. Meantime, she added, debate over Biden's plan "is so confusing. All people know is, it's infighting in Congress and it's a lot of money."
A survey Anderson helped prepare for the advocacy group Marshall Plan for Moms showed the Child Tax Credit enjoying majority support. But other priorities including paid family leave and more affordable health care coverage -- both of which are also getting shrunk in the Democratic compromise - were considerably more popular.
That's not due to limited access. The credit is available in full for households earning up to $150,000, which covers the vast majority of American families. It gradually phases down beyond that level.
Some insist that near-universal availability, rather than broadening the expanded credit's appeal, actually limits it. Democratic data analyst David Shor argues a narrower program may be more politically sustainable.
Number of joint Biden-Harris appearances plummets: Report
Joe Biden and Kamala Harris appeared together publicly 18 times in February after rising to the White House on a promise to be a partnership. But in October they only had one joint press event.When Biden picked Harris to be the first female and woman of color to be vice president he strongly indicated she would be an equal partner in his administration.
"In general, voters like to receive benefits themselves," Shor and a colleague wrote recently on the SlowBoring website. "But when thinking about benefits for other people, they often prefer that social spending be targeted to those who need it most."
In that way, recalcitrant Democraticeffort to reduce the credit's cost by restricting its availability to those with lower incomes might help preserve it in future years. Reflecting the cultural resistance to "welfare" even among some potential beneficiaries like his West Virginia constituents, Manchin warns against creating "an entitlement society."
Biden supports embedding the expanded credit, which costs more than $100 billion annually, permanently into law. To preserve cash for other priorities, however, an initial version of the pending legislation extended it for only four years.
As resistance from moderates shrinks the price tag from $3.5 trillion to around $2 trillion, negotiators have since moved toward a one-year extension. In either case, Democrats hope public support would prevent even a Republican Congress from letting it expire.
"People tend to be loss averse," reasoned Chuck Marr of the liberal Center on Budget and Policy Priorities. "So they might not give someone as much credit for the gain, but when someone else tries to take it away, then the political benefit would be more apparent."
Republicans in 2017, for example, couldn't muster the votes to repeal Obamacare despite its up-and-down political past. Yet there's a crucial difference: an expiration date would let hostile lawmakers kill the expanded credit without taking any action at all.
As a result, advocates are quietly negotiating a fallback.
The Child Tax Credit that existed before Biden increased it as high as $3,600 let the lowest earning families -- those without income tax liability to offset with a credit -- claim no more than $1,400 of the $2,000 maximum. Now, Bennet and others are pressing to make the $2,000 maximum for that previous version of the credit fully and permanently available to even those lowest earners.
If they succeed, full "refundability" would endure even if the expanded Biden credit expires. Simply doing that, by Marr's calculation, would reduce child poverty from its pre-Biden level by 20%.
COVID-19, corporate taxes, Iran nuclear deal on Biden's agenda for Day One of G-20 summit .
The G-20 summit that opened Saturday in Rome will mark the first time in two years that some of the world's most powerful leaders have met in person.Biden arrived at the modernist, cloud-shaped convention center in Rome where the Group of 20, or G-20, is meeting and was welcomed by Italian Prime Minister Mario Draghi. A few minutes later, he joined other leaders for a traditional "family photo.