Biden Tells Lawmakers He Will Seek Temporary Child Credit Boost

President Joe Biden told a group of lawmakers he plans to propose a temporary extension of the child tax credit, saying that a permanent expansion could be difficult the pass the Senate.

Representative Teresa Leger Fernandez, a New Mexico Democrat, brought up the child tax credit during a meeting at the White House Tuesday, a spokeswoman for the lawmaker, Maria Hurtado, said. While Leger Fernandez and Biden agreed that they preferred a permanent expansion, they discussed the possible challenge it could face in the Senate, Hurtado said.

The discussion outlines one of the key stimulus measures that Biden is expected to reveal in his “American Families Plan” in the coming days and a long-term priority for Democrats: getting cash to low and middle income parents.

The Washington Post previously reported that the administration was considering a time-limited extension of the enhanced benefit, while the Wall Street Journal reported on Biden’s remarks to lawmakers.

Biden’s proposal would include a multi-year extension of a provision in the March pandemic-relief legislation that expanded the child tax credit this year to $3,600 for children five and younger and to $3,000 for children six and up. The tax benefit had previously been $2,000 per child. It begins phasing out for single parents making more than $112,500 and married couples making more than $150,000.

Price Tag

The law also requires the Internal Revenue Service to send out the payments periodically throughout the year, instead of adding it onto a household’s annual tax return. Those payments are slated to start going out in July.

Many Democrats have said they want to make the larger child tax credit permanent, but doing so faces some challenges -- especially the hefty price tag. The Tax Foundation estimates that a permanent expansion could cost $1.6 trillion over a decade.

Paying for that could mean raising taxes beyond what some moderate Democratic senators -- such as Joe Manchin of West Virginia or Kyrsten Sinema of Arizona -- have said they would support. Manchin has also said he doesn’t want to debt-funded spending. Both senators are must-have votes as Democrats look to pass legislation in a Senate divided 50-50 where Republicans have said they won’t vote for tax increases.

Democrats are hoping that the expanded family benefit will lift children out of poverty and prove to be popular among voters, effectively compelling lawmakers to make it a permanent fixture in the future. The tax benefit has historically had bipartisan support, but some Republicans criticized the newly expanded version, saying that it gave too much direct cash support to households.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.