Topline
As the Biden administration prepares to unveil its massive “Build Back Better” plan focused on infrastructure and American workers next week, a group of 41 Senate Democrats is urging the president to make certain pandemic relief tax cuts permanent.
Sen. Sherrod Brown (D-Ohio)
Key Facts
In a Friday letter to President Biden, Sens. Sherrod Brown (D-Ohio), Michael Bennet (D-Colo.), Cory Booker (D-N.J.), Ron Wyden (D-Ore.) and others urged the administration to make permanent the temporary expansions of the Child Tax Credit and the Earned Income Tax Credit authorized by the $1.9 trillion American Rescue Plan in any future recovery plans it releases.
Biden’s forthcoming proposals would only extend the expanded credits for a few years, the Washington Post reported last week.
The President cannot unilaterally cut or raise taxes without Congress—that means that the permanent extensions will need enough support from lawmakers in a closely divided and highly partisan Senate to overcome a filibuster (60 votes) or, if the proposal is folded into the special budget reconciliation process, reach a simple majority (51 votes).
Crucial Quote
“No recovery will be complete unless our tax code provides a sustained pathway to economic prosperity for working adults and families,” the senators wrote. “Your forthcoming Recovery Plan is the opportunity we have to make the expansions of these credits permanent.”
Key Background
Under the American Rescue Plan, the new child tax credit will give eligible parents $3,000 for every child aged 6 to 17 and $3,600 for every child under age 6 (up from $2,000 per dependent child up to age 16). Half of that money is slated to be sent out in advance in a series of payments in the second half of the year, with families able to claim the remainder on their tax returns next year. Democrats also made the credit fully refundable to make it more accessible to those at the lowest end of the income spectrum. The expanded earned income tax credit nearly tripled the size of the maximum benefit for childless filers from $534 to $1,502 and widened the eligibility requirements to include people under age 25 and people over age 65. The expansions of both credits will expire after one year unless Congress acts to extend them or make them permanent.
Big Numbers
83 million. That’s how many children live in households that would benefit from the child tax credit as expended by the American Rescue Plan, the Institute on Taxation and Economic Policy estimated. The expanded earned income tax credit is expected to reach 17 million low-income adults, according to the Center on Budget and Policy Priorities.
What To Watch For
President Biden is planning to unveil his multitrillion-dollar infrastructure plan in Pittsburgh on Wednesday.
Further Reading
Covid-19 Recession: 10 Important Numbers That Sum Up America’s Economic Crisis One Year Later (Forbes)
How Much Money You Will Get From Stimulus Checks, Unemployment Benefits And Everything Else Inside Biden’s $1.9 Trillion Relief Bill (Forbes)
Here’s Everything You Need To Know About The New Expanded Child Tax Credit (Forbes)
$1,400 Stimulus Checks Are Already Working As Credit, Debit Spending Surges 45%, BofA Says (Forbes)
