The House of Representatives is expected to give broad bipartisan approval on Wednesday to a $78 billion bill that would expand the child tax credit and restore a range of tax breaks for businesses, a rare achievement in an election year of a Congress that tried to pass the legislation.
However, the path to the measure’s enactment is still difficult because of political disagreements over who should benefit most from it. The effort, which faces opposition from Senate Republicans and some House members of both parties, is a test of whether a divided Congress with painfully thin margins can withstand the dysfunction of the Republican-led House, disregarding electoral politics and corresponding ones Enacting laws would mean victories for both parties.
“The Tax Relief for American Families and Workers Act is important bipartisan legislation to revitalize conservative, pro-growth tax reform,” spokesman Mike Johnson said in a statement Wednesday. “This bottom-up process is a good example of how Congress should legislate.”
The package would expand the child tax credit — albeit in a version that is significantly scaled back from pandemic-era levels — and restore a range of tax breaks for businesses related to research and development and capital spending. Both would apply until 2025. It would also strengthen the housing tax credit for low-income earners and extend tax benefits to disaster victims and Taiwanese companies and individuals.
The plan would be funded by cutting the employee retention tax credit, a pandemic-era measure meant to encourage employers to keep workers on the payroll that has become a magnet for fraud.
Lawmakers from both parties see it as a political victory and an opportunity to show voters that they can actually accomplish something despite the chaos and unrest that has characterized the Republican-led House.
“The majority of the country is really yearning for us to do things in a bipartisan way,” Republican Rep. Greg Murphy of North Carolina said in an interview. “We’ve seen a lot of gridlock because some people basically want to say no to everything. And I think we need to move forward and actually show people that we can govern.”
But in a sign of the political hurdles complicating the bill’s path, Mr Johnson is bringing it forward on Wednesday under special fast-track procedures that require a two-thirds majority for passage. The maneuver allows him to bypass any Republicans who might otherwise have blocked the bill based on their policies and political objections.
Senate Republicans have also tried to pump the brakes, another indication of the political hurdles the package faces. The bill would be a victory for President Biden and Democrats who have made expanding the child tax credit a major issue, including Sen. Sherrod Brown of Ohio, who is up for re-election this year and is a key Republican target in November.
And a group of lawmakers from New York and other blue, high-tax states are upset that the measure falls short of a push they have sought to increase the cap on state and local tax deductions, known as SALT, which would benefit high earners. New York Republicans expressed their displeasure Tuesday by briefly blocking a procedural measure in protest.
“The point is, as has been made many times in this Congress, obviously, there is strength in numbers,” said Rep. Mike Lawler, who joined Reps. Anthony D’Esposito, Nick LaLota and Andrew Garbarino in dissenting from the measure , only to swap their votes once their point of view has been made. “But for us, who delivered the majority, this is the issue that counts.”
Mr. Johnson allayed their concerns after a long night of meetings on Tuesday by committing to moving forward on SALT, according to a person familiar with the discussions who described them on condition of anonymity. Another person, also describing the discussions on condition of anonymity, said the expectation was that the speaker would propose a measure that would double the cap on SALT deductions for married couples.
The package discussed Wednesday was negotiated by the two leading tax authors in Congress: Representative Jason Smith, Republican of Missouri and chairman of the Ways and Means Committee, and Senator Ron Wyden, Democrat of Oregon and chairman of the Finance Committee. She has the support of the White House, key leaders of both parties on Capitol Hill and a number of rank-and-file members. It gained momentum after the Ways and Means Committee approved it on a mostly bipartisan basis in January.
Supporters point to that vote and how unlikely a tax deal seemed to be reached as a good sign for his prospects.
“I think about 90 days ago there was a general assessment that the cause of passing a bipartisan tax bill had no pulse,” Mr. Wyden said last week. “I mean, there was just no way.”
Republican advocates argue that the corporate tax breaks are worth embracing and also call the child tax credit a conservative victory.
“The child tax credit reforms in this bill are family-friendly measures that maintain the child tax credit structure of the Trump-era GOP tax reform,” Mr. Smith said in a statement. “The child tax credit provisions in this bill help families suffering from inflation, eliminate the penalty for families with multiple children, and maintain work requirements.”
And the bill’s supporters hope a strong bipartisan vote in the House will pressure Senate Republicans to drop their opposition.
“If there is a really big vote,” Wyden said, “this won’t be a traditional political D and R debate. People will say, ‘We really need this money.’ It will make a big difference.”
The legislation would make the $2,000 per child credit more accessible to families with multiple children and gradually increase the cap for lower-income families to replace the amount for higher-income families. Additionally, the credit would automatically adjust for inflation and allow parents to use their previous year’s income if it would allow them to receive a larger credit.
Right-wing Republicans have denounced the expansion, arguing that it would reduce incentives to work. They have also opposed allowing undocumented immigrants who have U.S.-born children to receive the credit to which they are entitled under current law.
“I will not support anything that expands the child tax credit, that massively expands the welfare state,” said Rep. Bob Good, Republican of Virginia and chairman of the House Freedom Caucus. “And I will not support the child tax credit for illegal immigrants. I think it incentivizes this illegal invasion and we should be united as a Republican Party against it.”
Progressive Democrats, however, argued that the bill does not sufficiently expand the tax credit and disproportionately favors corporations. It falls far short of the pandemic-era version of the child tax credit, which paid up to $3,600 per child into families’ bank accounts and helped lift millions of children out of poverty.
“The tax deal fails justice,” Rep. Rosa DeLauro of Connecticut, the top Democrat on the Appropriations Committee, said in a statement. “At a time when a majority of American voters believe taxes should be increased on large corporations, there is no reason why we should give corporations a tax break while giving families pennies.”
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2024-01-31 17:50:45
www.nytimes.com