For months, Democrats have touted the extended child tax credit as the crown jewel of President Joe Biden’s "Build Back Better" legislation, but the subsidy faces extinction in the wake of Sen. Joe Manchin’s announcement that he will not vote for the bill.
Congress initially passed an increased child tax credit in President Joe Biden’s $1.9 trillion COVID-19 relief bill, and Democrats planned on extending it for one year in the Build Back Better Act, a $1.75 trillion social welfare and green energy bill.
The credit provided up to $300 per child each month. Proponents said the money has served as a financial lifeline for parents during the pandemic and has slashed childhood poverty significantly.
The measure was set to expire at the end of the year, and the last round of checks was issued in December.
Democrats hoped to renew the payments in Build Back Better and to pass the measure by the end of the year, preventing any significant lapse in the payments. But without Manchin’s support, the measure is stalled indefinitely.
Majority Leader Chuck Schumer, a New York Democrat, said the Senate would vote on the bill, despite Manchin’s objections to it, as soon as lawmakers return in January.
Proponents hope that public support of the child tax credit will help pressure Manchin to change his mind.
“We have got to do a better job of getting the word out as to what's in this bill and what it will mean, among other things, by the way,” Senate Budget Committee Chairman Bernie Sanders, a Vermont independent, told MSNBC. “The $300 per month for working parents that they're getting for their kids, that's going to end if this bill is not passed, despite the fact we have reduced childhood poverty through that by almost 40%.”
Without Manchin’s support, the Build Back Better legislation cannot pass the evenly split Senate.
Democrats are also weighing a plan to split up the bill and attempt to pass portions of it separately. The child tax credit will likely be a top priority.
But even as a stand-alone measure, it may not win Manchin’s support, nor is it likely to garner any GOP support.
Manchin, in a Monday interview with Hoppy Kercheval on West Virginia MetroNews, said the tax credit should only target people “that need to get it.”
Currently, couples earning up to $150,000 qualify for the payments, as do single parents making $112,500.
And Manchin believes only “people that are working” should have access to the extra payments.
“It’s called a tax credit,” Manchin said, “You’ve got to have a W-2 to show that you worked.”
Republicans oppose the subsidy, arguing it should end now that economies are reopened and jobs are widely available.
Democrats, however, hoped to make the expanded child tax credit permanent, arguing parents are struggling with the high cost of raising children.
While the Build Back Better legislation extended the tax credit for only a year, the party intended to find a way to keep it going as a kind of universal basic income for families.
Manchin opposed the Build Back Better legislation in part because Democrats provided short-term cost analyses for the child tax credit and other programs in the bill that they would likely seek to make permanent at a much greater cost.
“That’s not being genuine as far as my constituents in West Virginia,” Manchin said.
A Congressional Budget Office report released earlier this month found that the Build Back Better legislation would add $3 trillion to the debt over a decade if programs within it became permanent.
The tax credit is popular, and Manchin may be open to working with fellow Democrats to pass a version that meets his requirements for means-testing and employment.
Sen. Ron Wyden, who chairs the Senate Finance Committee, outlined a proposal that would extend the tax credits beyond one year.
“Families received their sixth child tax credit payment last week, and they have come to depend on these payments to cover the essentials like rent, groceries, heat, and clothing for their children,” Wyden said. “Food insecurity among families dropped by about 25% since these payments began. Child poverty has been cut nearly in half. This program is Social Security for our children, and Democrats must keep it going over the long term.”
Wyden’s outline includes money for clean energy programs and lowering the cost of prescription drugs. It would not add to the deficit, he said, if Democrats stick with the plan to raise taxes on corporations and the wealthy.
“The Finance Committee has put forward a revenue menu with more than enough options to permanently pay for these priorities,” Wyden said.
Biden touted the child tax credit at the White House on Tuesday.
“I still think there’s a possibility of getting Build Back Better done,” Biden said. “Sen. Manchin and I are going to get something done.”