Congress Moves to Expand the Child Tax Credit

The bipartisan sponsors hope to pass the measure before tax season.

By , and
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Happy Wednesday! Yesterday was an exciting day in the nation’s capital! No, there wasn’t any voting happening—Congress gave itself a snow day. But Capitol Hill is good for something besides the occasional lawmaking: It’s also an excellent spot to go sledding.  

Quick Hits: Today’s Top Stories

  • The U.S. military launched additional strikes against Iran-backed Houthi rebels in Yemen on Tuesday, U.S. Central Command (CENTCOM) announced yesterday—the third such barrage since late last week. U.S. forces targeted and destroyed four anti-ship ballistic missiles in an ongoing effort to secure Red Sea shipping lanes against continued Houthi attacks on commercial vessels. Houthi militants fired another missile following the U.S. strike, striking a Greek-owned, Maltese-flagged ship—which remained seaworthy and reported no injuries from the attack. Oil giant Shell announced Tuesday it would suspend travel through the Red Sea over spillage risks and crew safety concerns should one of their vessels be attacked. 
  • Meanwhile, CENTCOM confirmed yesterday that a search remains active for two Navy SEALs missing off the coast of Somalia after falling into choppy waters Thursday night. The pair were part of a team attempting to board a small boat, called a dhow, in order to seize Iranian weapons—including ballistic and cruise missiles—being illegally transported to Yemen. CENTCOM said it was the first such seizure since Houthi attacks on the Red Sea shipping lanes began in November of last year. 
  • Israel and Hamas reached a deal on Tuesday to allow additional medical aid into Gaza in exchange for medication being provided to some of the Israeli hostages Hamas and its allies are still holding in the Gaza Strip. Qatari and French negotiators helped broker the deal, which will see medication—purchased in France and shipped to Qatar, where it will be transferred to Gaza—delivered to approximately 45 hostages.
  • A federal judge on Tuesday blocked JetBlue’s $3.8 billion effort to acquire budget airline Spirit, arguing that the acquisition would disadvantage customers who rely on Spirit’s uniquely low prices. “If JetBlue were permitted to gobble up Spirit—at least as proposed—it would eliminate one of the airline industry’s few primary competitors that provides unique innovation and price discipline,” argued Judge William G. Young of the U.S. District Court for the District of Massachusetts. The ruling was seen as a win for the Biden administration after the Justice Department challenged the merger on antitrust grounds in March. Spirit and JetBlue responded to the ruling in a joint statement, saying the companies were considering “next steps as part of the legal process.”
  • Former Arkansas Gov. Asa Hutchinson dropped out of the 2024 Republican presidential primary on Tuesday after picking up just 191 votes in Monday night’s Iowa caucuses. Hutchinson—who was one of the few candidates to stridently and consistently criticize former President Donald Trump—had repeatedly failed to qualify for GOP debates, appearing in only the first debate last August. “My message of being a principled Republican with experience and telling the truth about the current front-runner did not sell in Iowa,” he said in a statement Tuesday. “I stand by the campaign I ran.”
  • Republican Sen. Chuck Grassley of Iowa is being treated for an infection, his office announced Tuesday. A spokesperson for the senator said Grassley, who is 90 years old, “is in good spirits and will return to work as soon as possible following doctors’ orders.”

Congress Tiptoes Toward a Tax Deal

House Ways and Means Committee Chairman Jason Smith presides over a hearing in the Longworth House Office Building on December 5, 2023, in Washington, D.C. (Photo by Win McNamee/Getty Images)
House Ways and Means Committee Chairman Jason Smith presides over a hearing in the Longworth House Office Building on December 5, 2023, in Washington, D.C. (Photo by Win McNamee/Getty Images)

A Democratic senator and a Republican congressman announced yesterday what has effectively become an endangered species in Congress: a bipartisan, bicameral legislative framework with provisions that are supported by a large number of Republicans and Democrats.

Sen. Ron Wyden, the Democratic chair of the Senate Finance Committee, and Rep. Jason Smith, the Republican chair of the House Ways and Means Committee, published on Tuesday their negotiated agreement to provide tax breaks for businesses and expand the Child Tax Credit (CTC). The framework reflects months of negotiations, and supporters of the bill want to push it through before the end of the month—in time for tax filing season. But the deal comes as House and Senate leadership try to avert a government shutdown, and it’s unclear if a tax package can pass both chambers.

The agreement, to be introduced as the Tax Relief for American Families and Workers Act of 2024, includes $78 billion in tax breaks and expanded credits. It would expand access to the CTC implemented under the 2017 Tax Cuts and Jobs Act (TCJA), which doubled the credit from $1,000 to $2,000 per child through 2025. It would also phase in an increase in the refundability of the CTC to allow low-income families to take full advantage of the credit. 

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  1. Pohl

    QOTD: This was probably already pointed out, but the poorest are already the ones with higher fertility rates. I think this tax credit expansion has more to do with helping the needy than goosing births. I’d rather take from the rich and give to the poor as a general rule of thumb. There’s no shortage of need last time I looked around town.

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  2. Cato

    I doubt very much that the Child Tax Credit will have any effect on birthrates.

    Nevertheless, it should be done simply on moral grounds. People that are having children are bearing a huge burden for a society that has stopped having kids. They are a joy and the meaning of life itself for us. But yes, they are expensive - on both ends . . . direct expenses AND missed opportunity costs.

    My four kids are on the hook for working harder to take home less so everyone can get the "entitlements" they are certain they are owed - although they produced no kids to pay for it.

    Our kids will be the caretakers in every way when our generation is elderly. And they will be fighting our wars and keeping our streets safe.

    A little help paying for them now is not too much to ask.

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    Citizen60

    Support for families will go along way toward reversing the decline in the birth rate. This is good for families, despite my gagging on the tax breaks, too bad Republicans as a whole aren’t on board with getting this done asap.

    Wanna demonstrate a serious concern over the declining birth rate? Paid maternity leave—the US is an outlier in the devoted world not giving mothers this basic protection.

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  4. James Morphew

    LUK: Paying people to have children is not the right approach. We need to foster the joy of giving and nurturing life, along with the humility and satisfaction that comes from raising children and having (and supporting) families. Then more will join the ranks of family living. Our emphases these last 70 years of seeking great careers and recognition and wealth and fame are all self-centered motivations. They are not evil, they can be beneficial, but not meaningful over the long horizon.

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      Magpie

      What does that wish translate to in practical terms? Do you have any policies in mind?

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      1. James Morphew

        Personal ones only, not governmental solutions. Establish and encourage local community organizations, participate in such, reinforce philosophical and spiritual lives and discussions (church comes to mind), participate in school functions, discipline your children. Stuff like that.

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    2. Joe

      Who has been emphasizing seeking great careers and recognition and wealth for 70 years? Who has not been emphasizing great careers and recognition and wealth for forever?

      Great careers and recognition and wealth are good things. Raising children and supportive families are good things. They don't need to be mutually exclusive.

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      1. James Morphew

        That was rather my point.

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        1. Joe

          I misinterpreted. I saw self centered and not meaningful over the long horizon and thought you were subordinating great careers and recognition and wealth. I was saying they are both equally important and could be done together or separate as the person may choose.

          If I were suggesting ways to accomplish this for myself, it would be to learn to respect all the different types of people and the choices they make. Unless, of course, their choices do physical harm to me. And realize, there are many ways and many value structures different from mine. I chose to have children and that was valuable to me and society. Others choose differently and those choices are also equally valuable to them and society.

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  5. Packmd4

    LUK: I am in favor of expanding the CTC, but I'm skeptical it will really make a huge difference in reversing the birth rate decline. It hasn't worked in other countries and thus even though I do think it's worthwhile it won't do anything here. That's on top of how children and parents are really not supported in American society. Especially as it's increasingly hard to have a one income couple be able to make ends meet, professions that take care of kids make considerably less money than comparable careers that are adult focused, unlike Europe we don't have parental leave etc., and I think in general American culture just doesn't value family formation, community and kids. Unless we ramp up immigration we're on the way to becoming Japan or Korea where governments are panicking because the society is not sustainable because no one is having kids anymore.

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  6. Sai Ayila

    What took them so long to expand ctc, this should have been done long time ago. But CTC it needs to minimum $3000 imo it need to be adjusted it based on inflationary rate. It's a good starting point but still has a long way to go before it is put into writing. ARP ctc component is the best imo but still whatever it takes to reduce child poverty I'm in favor of it, they need to push it for more.

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    Dave Conant - MO

    Re: Let us know: I'm in favor of increasing the CTC, but, like many other writers, don't think it will impact the birth rate measurably if at all. Much more important is having a stable, functional government that doesn't play performative political games and a clear policy of equality under the law that doesn't enable disruptive attacks on the social structure of our country.

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  8. BEE

    LUK: I'm very much in favor of expanding the CTC. It seems to be a broad good to help out struggling families. I do not think that it will meaningfully reverse declining birth rates, as I've seen little evidence of any policies tried out around the world doing that in any significant amount, but it will help poor families! That's good enough.

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    David.Link

    One quote about the Child Tax Credit raised a question I've had for a long time. The Center on Budget and Policy Priorities says the CTC “would lift as many as 400,000 children above the poverty line and make an additional 3 million children less poor as their incomes rise close to the poverty line.”

    So who does the CTC really go to? Apparently to parents (who are the ones who would have "incomes" I can only hope and pray) and not to children themselves. Right?

    This is obviously only one among the millions of examples of political rhetoric leveraging ideas like children, first responders, military veterans, seniors, etc., that no one could possibly oppose helping. And everything I've heard and read about the CTC makes it seem like it is a very good idea. It appears to need no hiding of the ball -- parents with minor children will benefit, and in a way that respects fundamental budget arithmetic.

    So I'm all for it. But I'm also for less deceptive language where possible. Unless I'm wrong, and the government will be writing checks to children (with incomes!), I know I'd have supported this proposal if it were more straightforwardly called the Parents Tax Credit.

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    1. Samuelyesnik

      I'm all for honest descriptions of policy goals and get annoyed by euphemisms too, but this is not really an issue here. You could say it lifted families out of poverty, but the number of children affected is what we're more interested in, and calling it the parent tax credit would be less accurate, since it doesn't go to parents whose children are grown or don't live with them.

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    Richard Maxton

    The "having kids is expensive" argument seems to me to be yet another version of "getting an education is expensive" in that the end of that sentence for many people seems to be "so somebody else should pay for it".

    UGH. Having kids, like getting a college education, IS expensive, but that seems to be only bringing up the negatives, yeah? That college education will often mean a much higher income of the course of your life (if you're smart about what our degree is in - no underwater basket weaving or gender studies nonsense). Those kids will bring you incalculable joy and grief and laughter and tears. And if you're lucky—and a good parent—someone(s) who will care for your when you're old wrinkly and decrepit.

    To be clear, I'm fine with child tax credits, and I'm actually fine with this increase. I believe in helping the less fortunate—even those who are less fortunate because of CHOICES they made—though like CynthiaW and others I'm not a fan of social engineering via tax code.

    I just don't like the way many are framing the expense of raising a family. Own your choices people.

    Grumpy old man rant over (for now).

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    1. Pohl

      Yeah, you’re tempting me to add a rant, but I don’t want to harsh my own mellow at the moment. Just one thing: Why aren’t there more little ragamuffins in the middle classes? I think our large, entitled Rockefeller complex is part of the explanation.

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      CynthiaW

      I think using the mechanism of a tax credit - even one that applies to people with no tax liability - just makes people feel better than framing it as what it is: a transfer. Same with all the other tax credits: transfers to people with "this" characteristic from people without it.

      Flat tax. Big personal exemption. Get the rates to the Laffer Curve equilibrium point. Don't use taxation to manipulate the citizens.

      "But we still have poverty," one might say. Okay, have anti-poverty programs. For extra points, have ones that help poor people the most at the least relative cost.

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      1. PROMETHEUS

        The Laffer Curve is not reality; it is a sham construct of the propaganda for the failed supply side economics. myth.

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        Richard Maxton

        CynthiaW for Benevolent Emperor!

        ;)

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      George.Skinner

      It's probably best when something like a child tax credit is framed as "helping people raise kids is important for society, so here's what we can afford to do to help lighten the burden." The key part is *what we can afford* - you'll find a lot of people trying to leverage arguments about the financial burden of raising children to justify a universal government daycare entitlement. These are usually the same people arguing for free tuition or blanket forgiveness of student loans, oblivious to how much government *already* subsidizes higher education through various means.

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        Richard Maxton

        Yes, and also it completely misses that government tax credits/subsidies/what-have-you is hardly the end-all, be-all of what we as a society can do (and often do) to help lighten the burden.

        Plenty of people 'round here denigrate faith and religion (I'm am SO sick of the "sky-daddy" nonsense—have some respect for others, people) without considering all the good that MANY people of faith do to make the world a better place is ways big and small.

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      CynthiaW

      ' ... the end of that sentence for many people seems to be "so somebody else should pay for it." '

      Very good point.

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      Retired Prosecutor

      Here, here!

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    6. MathewA

      Yes but given our current birth rate, and the lack of new tax payers to pay for all those entitlements we desperately need those new tax payers.

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        Richard Maxton

        Which is why I'm in favor of vastly increasing our legal immigration.

        Of course, in order to do that we'd also need to vastly increase our interest in having people immigrate. And also those who immigrate are going to need to be interested in assimilating to our country's culture.

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        1. MathewA

          I'm in favor on immigration, but not that much. People need time for assimilation.

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          1. PROMETHEUS

            I have a question.

            Do you have big fences or a moat around your property?
            Machine gun nests perhaps?

            Or you've an hour away from the end of the last paved road?

            Just curious.

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          CynthiaW

          And people who come to the U.S. would need a place to live.

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            Richard Maxton

            Yes.

            ::insert snarky comment about NIMBYism here::

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        CynthiaW

        Maybe we will not, by any mechanism, generate enough new taxpayers to fund the benefits recipients. Maybe the entitlement system will just crash, and the country will go back to "private pay or private charity."

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        1. MathewA

          I agree the entitlement system will crash, I doubt they will scrap it.

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            CynthiaW

            They could reform it to make it solvent for the future. It seems improbable.

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        2. Packmd4

          Which, considering the rapid decline of institutional religion (as pre 1930's the vast amount of private charity was from Christian organizations), would be a disaster for poor people in this country.

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            CynthiaW

            If there is an example of a country that is dealing successfully with the problem of keeping its pension and welfare programs solvent under circumstances where the proportion of earners to recipients is declining significantly, I am not aware of it.

            That said, I think the current role and potential of private charity is greater than many expect.

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