Children’s cash schemes take center stage as coronavirus relief scheme takes shape

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The $ 1.9 trillion coronavirus aid package making its way through Congress will be the scene of a new debate between Democrats and Republicans: how best to get more money for families with children. Democratic tax writers in the House unveiled their plan Monday night, ahead of an expected margin session later in the week of their part of a bill that would go to the Senate and be immune to the obstruction requirement. out of 60 votes.

“The pandemic is driving families into deepening poverty, and it is devastating. We are making the Child Tax Credit more generous, more accessible, and by paying it monthly, this money will make the difference in a roof over someone’s head or food on their table, ”said Rep. Richard Neal, a Democrat from Massachusetts. . According to draft legislative language obtained by MarketWatch.com, the Democrats’ plan would increase the child tax credit from $ 1,000 currently in law for one year to $ 3,000, or $ 3,600 in the case of families with children under the age of 6. . The credit would be refundable, which means that if a family’s tax bill were more than the credit, they would still be eligible to receive it. The credit would begin to be phased out at income levels of $ 75,000 for individuals and $ 150,000 for couples. The liberal Economic Security Project praised the plan, saying: “Monthly direct payments are the fastest and most efficient way to get help for families in need.” The Democratic proposal was unveiled just days after Sen. Mitt Romney, a Republican from Utah, published his own proposal, which would also give money to families with children, but instead use the Social Security Administration to cut the checks. , not the Internal Revenue Service. Under Romney’s proposal, which, unlike the Democrats’ plan, would be a permanent program, families would be eligible to receive a monthly benefit, beginning with pregnancy. For children under the age of 5, the benefit would be $ 350 per month. From ages 6 to 17, the benefit would drop to $ 250 per month. Romney would offset the costs of his plan with a combination of cuts elsewhere in the budget. They would include eliminating the state and local tax deduction, which was capped in the 2017 tax cuts law and Republicans say it benefits the wealthy the most. Other cuts would eliminate the government‘s Temporary Assistance for Needy Families assistance program, the “head of household” tax status, and the existing child and dependent care tax credit. “American families are facing increased financial pressure, compounded by the COVID-19 pandemic, and marriage and birth rates are at an all-time low. On top of that, we have not comprehensively reformed our family support system in nearly three decades, and our changing economy has left millions of families behind, ”Romney said Thursday. “Now is the time to renew our commitment to families to help them meet the challenges they face as they take on the most important job any of us will ever do: raising the children of our society.” Liam Donovan, director of the Bracewell LLP Policy Resolution Group in Washington, said that the fact that Democrats spearheaded the launch of their aid package this week with details of the increased child tax credit shows that they take it seriously and their chances of inclusion in a final. the package is good. “It’s a long-standing priority,” he said. “In terms of the interaction with Romney, I think it’s almost incidental, but in terms of his intentions here, it seems pretty clear that this is a high priority.” While the proposed Democratic plan is temporary, history has shown the willingness of lawmakers to extend popular temporary tax breaks when they are ready to expire. That could make the proposal, for which Democrats did not specify compensatory cuts or revenue increases elsewhere, part of a group of provisions called “tax extensions” that are routinely given new life annually or every other. years. Donovan said including the idea in the coronavirus bill and passing the bill through the budget reconciliation process, which means Republicans can’t block it in the Senate, shows how the tax code will reflect the political polarization of The time. “As long as the only route to major legislation is through reconciliation, I think the tax code will have all the characteristics of what it takes to achieve something through reconciliation. It’s going to make it more complicated, but that’s the nature of the beast at this political moment, ”he said.