Senior Democrats drafting plan to give parents at least $3,000 per child in Biden stimulus
Senior Democratic lawmakers are moving to fulfill President Biden's desire to expand the child tax credit by drafting legislation that would direct the IRS to send recurring monthly payments to tens of millions of American families, according to officials who spoke on the condition of anonymity to share knowledge of the internal discussion.
Under one draft of the plan being discussed, the IRS would be tasked with depositing checks worth $300 every month per child younger than 6, as well as $250 every month per child age 6 to 17. That would amount to $3,600 over the course of the year for young children, as well as $3,000 a year for older children, the officials said.
Unlike with the stimulus checks, the Biden administration and Democratic lawmakers are hoping to make these child benefits a permanent government program that would continue in future years, according to three senior Democratic officials who spoke on the condition of anonymity to discuss internal planning. The current proposal calls only for the expanded benefit to be enacted for one year, after which Democrats widely hope political pressure will force Congress to extend them. The benefit would be phased out for affluent Americans, though the precise income level has not been determined.
The benefit could prove costly, increasing the federal deficit by as much as $120 billion for one year, according to estimates by the Committee for a Responsible Federal Budget, a nonpartisan group. But it could curb child poverty in the United States by more than 50 percent, researchers at Columbia University have found.
Congressional Republicans are expected to oppose the measure because of its price tag. Similar plans have garnered pockets of Republican support, however, with Sens. Marco Rubio (R-Fla.) and Mike Lee (R-Utah) among the GOP lawmakers who have pushed for dramatically increasing the child tax credit. All but one Senate Democrat endorsed legislation to expand the child tax credit in the previous Congress.
Biden earlier this month announced his intention to push for an expansion of the child tax credit as part of his $1.9 trillion economic relief package, and congressional Democratic staffers have made significant headway in drafting the legislation.
Under the plan, the IRS would send these payments automatically to American families, similar to how the $1,200 stimulus payments were disbursed last year. This approach would not require taxpayers to wait until they file their taxes to receive the credit. Families would receive the monthly benefits even if they owe the government more in taxes than the value of the credit.
"This will have more collective buy-in if a broader swath of the population directly receives the payment," one senior Democratic aide involved in drafting the legislation said, citing the popularity of the stimulus payments.
Democratic lawmakers are also exploring whether the Treasury Department can set up an online portal for parents to manage the disbursal of the new credit, these people said. The plan would be aimed at giving taxpayers the option of receiving a year's worth of the tax credit at filing season, rather than every month, should they so choose. Aides cautioned it may take time for Treasury Department officials to successfully set up a site that could handle millions of such requests. Other Democrats worry about whether the IRS will have the capacity to disburse the payments efficiently.
The Democratic staffers, who cautioned that discussions were ongoing and that the proposal had not yet been finalized, spoke on the condition of anonymity to discuss private deliberations not yet made public.
House Ways and Means Committee Chair Richard E. Neal (D-Mass.) is closely involved in the effort to write the expansion of the child tax credit, which also draws significantly from legislation spearheaded by Sens. Sherrod Brown (D-Ohio) and Michael F. Bennet (D-Colo.), the staffers said. House Appropriations Committee Chair Rosa L. DeLauro (D-Conn.) has also been closely involved in efforts to expand the credit.
The United States spends less than almost any other developed nation on child benefits as a share of its economy. Only a handful of industrialized nations, such as Romania and Chile, rank behind the United States on measures of child poverty kept by the Organization for Economic Cooperation and Development.
The tax credit proposal is also meant to, in part, address the skyrocketing burden of raising children during a pandemic and the widespread economic struggles millions of families are facing. Researchers at Columbia University have found the Biden plan would dramatically reduce the number of children in poverty, by as much as 54 percent, the equivalent of 5 million children. More than 1 million African American children would be lifted out of poverty by the plan, the researchers found.