WASHINGTON — The U.S. House voted overwhelmingly on Wednesday to approve a $78 billion tax package that would expand the child tax credit and restore some tax incentives for businesses.
The 357-70 vote sends the bill, called the Tax Relief for American Families and Workers Act of 2024, to the U.S. Senate, where lawmakers are expected to vote on it at some point, though passage is not guaranteed. All 14 North Carolina representatives voted ‘yes’ except Republican Dan Bishop, who voted ‘no’.
The House debate on the 84-page measure was largely bipartisan, with both Democrats and Republicans arguing between Missouri Republican Representative Jason Smith, chairman of the House tax-writing committee, and his Senate counterpart, Finance Chairman Ron Wyden, an Oregon Democrat. Supported the agreement. ,
Members of both political parties also spoke against the bill, with several far-right lawmakers arguing that expanding the child tax credit would expand the “welfare state” and progressive Democrats saying the bill would do less to provide relief to people. Not enough. Income and working families.
“Each of these policies will help American businesses grow, create jobs, and sharpen their competitive edge against China,” Smith said.
The child tax credit expansion continues provisions that Republicans inserted into the 2017 tax law passed during the Trump administration, she said, while updating some of the language.
“We maintain work requirements and remove the penalty for families with multiple children, while increasing benefits to support families suffering from today’s inflation,” Smith said.
Massachusetts Representative Richard Neal, the top Democrat on the tax-writing committee, said expanding the child tax credit would immediately help 16 million children across the country.
“It’s not the bill I would have written, but it is sensible policy,” he said of the overall package.
Neal sharply criticized far-right Republicans who spoke against the measure during floor debate and called the CTC “welfare.”
“I can’t believe we’re going to stand here tonight and hear that addressing childhood poverty is welfare-enhancing,” Neal said.
Immigrant and Child Tax Credit
Freedom Caucus Chairman Bob Good of Virginia, Matt Gaetz of Florida, Thomas Massie of Kentucky, Scott Perry of Pennsylvania and Chip Roy of Texas were among the Republicans who argued against passage during floor debate.
They all expressed disappointment that child tax credit payments could go to undocumented immigrants, even though a provision of the 2017 GOP tax law requires the child to have a Social Security number. And many also criticized the tax credit for businesses.
“Young children are not sent checks even if they have Social Security numbers. But their parents, who are here illegally, do,” Perry said.
Georgia Republican Representative Drew Ferguson vehemently rejected the criticism, saying he was not “concerned at all about ensuring that American business is more competitive on the global stage.”
“This isn’t about giving tax breaks to business, this is about investing in America and American jobs,” Ferguson said. “And the complete misinterpretation about the child tax credit is the most intellectually dishonest conversation I’ve heard on this floor in a very long time.”
“This is about making sure that working people and their families have the ability to move forward,” Ferguson said.
Connecticut Democratic Representative Rosa DeLauro, one of the more progressive members of the House and a longtime advocate for the CTC, also said she could not support the bill, arguing that it would “contradict who representative government works for.” is a joke.”
DeLauro said, “I cannot vote for a deal that so lopsidedly benefits big corporations while failing to ensure adequate tax cuts for middle- and working-class families.” “This deal is inequitable at a time when we have seen rising inequality.”
If Congress approves the bill, President Joe Biden is likely to sign it.
White House press secretary Karine Jean-Pierre said in mid-January that the legislation was a “welcome step.”
“And we believe Congress should pass it,” he said.
What’s in the Child Tax Credit?
The bill would expand the current child tax credit, which is up to $1,600 per child, to a maximum of $1,800 in 2023, $1,900 in 2024, and $2,000 in 2025. The extension will end after that.
The three-year extension of the child tax credit will not reach the level Congress approved during the COVID-19 pandemic, when it reached a maximum of $3,000 or $3,600 for children under 6.
The bill includes several tax incentives for businesses, including a provision that would allow businesses to immediately deduct research and development investments made within the United States.
According to a summary of the legislation, the bill “would strengthen the United States’ competitive position with China by removing the existing double taxation that exists for businesses and workers in both the United States and Taiwan”.
This legislation would help make housing more affordable through increases in the low-income housing tax credit and other provisions.
Parts of the law are aimed at helping communities recover from natural disasters, including tax relief for families damaged by hurricanes, wildfires, floods or the train derailment in East Palestine, Ohio.
The legislation would be paid for by eliminating a tax break for businesses that kept their employees during the COVID-19 pandemic, known as the Employee Retention Tax Credit. The legislation would end the ability for businesses to file new claims on January 31 instead of April 15, 2025.
The House Ways and Means Committee voted 40-3 in mid-January to send the legislation to the House.
‘Children who need diapers and shoes’
Senate Majority Leader Chuck Schumer, a New York Democrat, said Wednesday that he supports the tax bill and will work to figure out when and how it should be brought to the House floor for a vote.
Wyden, chairman of the Senate tax-writing committee, said he would talk to Schumer to determine whether there would be amendment votes on the package. But he said he wanted to see it voted on “as quickly as possible.”
Wyden also rejected some criticisms of the bill not expanding the child tax credit more significantly, noting that it lasts for three years and Congress would need to renegotiate tax policy after that.
“We’ve got kids who need diapers and shoes and they’re paying for essentials (and) small businesses that are trying to compete with China,” Wyden said. “I have to say, ‘Get on with it,’ ‘Get it done.'”
West Virginia Republican Sen. Shelley Moore Capito said she expects the Finance Committee to keep a markup before the bill goes to the Senate floor.
Capito said, “I think they need to have an amendment process to move it through finance and without having to decide everything in advance.” “That’s what troubles people when they’re trying to make policy, they don’t have any opportunity to think. Therefore I am in favor of the committee process. Bring it up and let it go through the committee.
Republican Senator Thom Tillis of North Carolina said he had several concerns about the bill, including that it “is not comprehensive enough.” He said he hoped the leaders would put the amendment vote in the House.
“I have been saying this is a mistake. I also think the payments are fraudulent,” Tillis said. “I mean, this is a program that we didn’t pay for when we were doing the COVID bill, that we’re now looking at paying for. And most of them are really cracking down on fraud and abuse.”
“Here’s a concept — why don’t we just send it back to the Treasury and start filling the $34 trillion hole that we have,” Tillis said, referring to the national debt.
Indiana Republican Sen. Todd Young said he and Idaho Sen. Mike Crapo, the top Republican on the tax-writing committee, are hoping to make changes to the law once they arrive in their chamber.
“We’re still hoping for reform,” Young said, though he declined to specify what changes he would want to make to the tax package. “I won’t elaborate.”
