Politics

White House, Democrats stumped as parents brace for the end of monthly government checks


Parents in more than 30 million households across America are about to be disappointed when the monthly checks they’ve been receiving from Uncle Sam don’t arrive.

Democrats are desperate to revive the direct payments of up to $300 per child that expired this month, but they remain stymied in search of an election-year solution to preserve the popular benefit known as the child tax credit.

The checks and direct deposits to most American parents — including families making up to $150,000 a year  — will stop showing up on Saturday after an extension of the child tax credit died with President Biden’s $1.75 trillion social welfare and climate bill.

Democratic leaders are mad about it, but they are stumped about how to revive Mr. Biden’s big spending bill or push through a standalone extension of the expensive payouts.

Senate Majority Whip Richard Durbin, Illinois Democrat, acknowledged that the impasse is angering the party’s liberal base in the election year.

“I’m sure they’re frustrated,” he said. “I know I am. … Cutting child poverty in the United States in half is a major accomplishment, and I hope we don’t abandon it.”

Rep. Pramila Jayapal of Washington, a leader of House progressives, called the lapsing benefit “totally unacceptable.”

“The pandemic isn’t over, the relief to withstand it shouldn’t stop,” she said.

The child tax credit, which was expanded as part of COVID-19 relief to send payments to poor families who don’t pay taxes, would cost an estimated $1.6 trillion over 10 years, according to an analysis by the Tax Foundation.

The White House is still holding talks with Senate Democrats about how to pass the massive spending package or pass it piecemeal, including the child tax credit.

One option would be to trim the overall cost of the tax credit program in hopes of accommodating Democratic holdouts, namely Sen. Joe Manchin of West Virginia who single-handedly sunk the $1.75 trillion bill last month over cost and inflation concerns.

Democratic lawmakers said they are still pressing Mr. Manchin. But he’s no closer to agreeing to an immediate extension of the child tax credit, which was one of the top reasons he refused to support Mr. Biden’s big bill.

“I’ve been basically very clear on that. I think there should be a work requirement,” Mr. Manchin recently told reporters.

He also has objected to the White House’s strategy of counting only one year of the program’s cost in its plan when he says it’s intended as a permanent benefit.

The checks began going out in June every month, rather than applied to annual income tax returns, as a relief measure for the economic woes related to the coronavirus pandemic.

Mr. Biden’s COVID-19 relief package that passed in March increased the amount families receive under a federal child tax credit, from $2,000 per child to $3,000 for each child between 6 and 17 years old, and $3,600 per child younger than 6. Single parents making up to $112,500 or married parents making a combined $150,000 were eligible for the extra money.

Rather than making parents wait until they file their taxes this year, the Treasury Department under the stimulus package had sent parents checks on the 15th of every month.

Adding to the price tag, the stimulus package expanded the credit to those who earn so little that they do not have to pay taxes, including those who do not work.

“Raising kids is work,” said Sen. Sherrod Brown, Ohio Democrat.

The work requirement remains a major sticking point for Mr. Manchin and Republicans, though Democrats have not been trying to negotiate a compromise with Republican senators.

The Democrats shift to benefits without a work requirement effectively undo the idea behind former President Bill Clinton’s welfare reforms, said Robert Rector, a senior fellow at the conservative Heritage Foundation.

“Requiring welfare recipients to do something was anathema to them,” he said. “Without a work requirement, what it is, is a welfare expansion.”

Democrats opposed requiring parents to work, saying disqualifying those without jobs would take money from poor children.

An IRS spokeswoman said that making the tax credit available even to those who make too little to pay taxes allowed the parents of 26 million children to qualify for the extra money.

Chuck Marr, senior director of federal tax policy at the liberal Center on Budget and Policy Priorities, argued that imposing a work requirement would take money away from those children at a time when their parents may not be working because of the pandemic.

“We don’t impose work requirements for tax breaks that wealthy people enjoy,” said Seth Hanlon, a senior fellow at the Center for American Progress, another liberal Washington think tank. “We shouldn’t add burdensome requirements on the people who are doing the hardest work of all, which is raising children on low incomes.”




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