Most of the Democrats in the Senate are trying to make the expanded child tax credit permanent
- Biden's stimulus expanded the child tax credit for a year, which should cut child poverty in half.
- 41 Democratic senators are urging Biden to make it permanent, saying a year isn't enough.
- Separately, the EITC expansion should boost the incomes of 17 million childless adults.
President Joe Biden's stimulus included a one-year expansion of the Child Tax Credit and Earned Income Tax Credit, lifting American out of poverty by sending up to $3,600 checks to parents. But the majority of Democratic senators say one year is not enough.
Now 41 Democratic senators, led by Sherrod Brown of Ohio, Michael Bennet of Colorado, and Cory Booker of New Jersey, sent a letter to Biden on Friday urging him to make the CTC and EITC permanent.
The letter touts their benefits, saying the EITC expansion is expected to boost the incomes of 17 million low-wage working adults, and the CTC expansion is expected to cut child poverty nearly in half. Failing to make it permanent would result in a spike in child poverty after this significant advance, the letter says.
"We must not allow these critical expansions to expire after one year," the letter said. "Doing so would result in a significant spike in child poverty, after we have made historic strides to end it. It would mean that millions of struggling adult workers would once again be taxed into poverty. That is wrong and unacceptable."
Congress and the White House need to provide a permanent path to recovery for Americans, the letter said, and along with making the EITC and CTC permanent, the Senate Democrats recommended Biden do the following:
- Lower the EITC eligibility age from 25 to 19 and eliminate the maximum age to ensure no one is locked out of needed aid;
- Make the CTC fully refundable;
- Boost the CTC from $2,000 to $3,000, and $3,600 for children aged 0-5, and distribute the credit monthly;
- Ensure strong safeguards to protect low-income families from surprise tax bills;
- Continue the option to use previous year's income to compute EITC benefits.
Studies have found that expanding the CTC and EITC would significantly benefit low-income Americans. Insider estimated that over 30 million American households could receive the CTC in 2021, and a report from the Democratic Policy and Communications Committee unveiled on March 3 found the credit expansions would lift nearly 10 million children above or closer to the poverty line. The Center on Budget and Policy Priorities said this would cut child poverty by more than 40%.
However, experts have debated the CTC expansion and whether it will truly deliver on its intended benefits. Matt Bruenig of the People's Policy Project -a left-leaning think tank - wrote in an analysis that a monthly, fully refundable CTC is a "comically complicated and bad policy design that would require an enormous amount of new administration to pull off."
And while Republican lawmakers support a credit expansion, Sens. Marco Rubio of Florida and Mike Lee of Utah said in a February statement that a CTC should not be turned into a "'child allowance,' paid out as a universal basic income to all parents."
"That is not tax relief for working parents; it is welfare assistance," the Republican senators said.
But the Democratic lawmakers who landed the credit expansions in the stimulus bill - Bennet, Brown, Booker, and Reps. Rosa DeLauro of Connecticut, Suzan DelBene of Washington, and Ritchie Torres of New York - said the expansions are vital to ensure equitable recovery for Americans.
"These improvements [the one-year credit expansions] are a necessary component of a Recovery Plan that ensures children, families, and struggling workers have the economic security they need," the letter said. "They also make for a fairer and more just tax code. Moving forward, if indeed we are to build back better, these changes must be made permanent to ensure a sustained and equitable recovery for American workers and families."