$3,000-per-child: what is Biden's new pandemic proposal?
Changes to the child tax credit allowance would see parents given up to $300-a-month to help struggling families through the coronavirus pandemic.
Democrat lawmakers are currently working on a new bill that would see deposit checks worth at least $3,000-a-year sent for each child under the age of 18. President Joe Biden pledged to help families struggling through the economic consequences of covid-19 and after signing a raft of executive orders in his first week, plans are in place for further financial support.
On Friday Biden told reporters gathered at the White House: “There is a growing economic consensus that we must act decisively and boldly.”
“This cannot be what we are as a country. We cannot, will not let people go hungry. We cannot watch people lose their jobs, and we have to act,” he said.
How much would the new child tax credits be worth?
The proposal is still in the early stages but CNN report that one draft currently being considered would see the IRS deposit checks worth $300-a-month for every child below the age of six, and $250-a-month for children aged between six and 17. Over the course of a year this would represent a total of $3,000 or $3,600 per child, depending on their age.
Child tax credits are nothing new but this proposal would be a considerable raise on the current amount offered, which works out at a maximum of $2,000 per year for children under 17. The $1.9 trillion American Rescue Plan that Biden unveiled last week includes funding for the new amount to be extended for 12 months from the bill being passed, but there are hopes that it could be maintained for longer.
The Committee for a Responsible Federal Budget, the non-partisan fiscal watchdog, suggests that a single year of this provision would cost the federal government about $120 billion.
Who would be eligible for the $300 monthly payments?
Assuming that the eligibility requirements stay the same then the financial support would be available to individuals earning less than $200,000-a-year, or less than $400,000 for a married couple. Families earning more than that may still be able to get some support but the amount given decreases above that threshold.
As it stands the Joint Committee on Taxation expect at least 48 million households to claim the child tax credit refund for 2020, but there are concerns that some struggling families may not be eligible under the current rules.
Plans to extend eligibility would come as a boost for struggling families
Currently there is a limit on the amount of money that recipients would be able to get because the existing child tax credit only refunds the taxes you have already paid. Therefore if a family pays less than $2,000 in tax than they would not be able to claim the full amount, regardless of their earnings or economic situation. According to the Center on Budget and Policy Priorities, this would mean around 27 million children in low-income families would miss out.
For this reason lawmakers are considering altering the system so the money would be distributed in the form of monthly payments, similar to the stimulus checks. There may also be the option to receive the annual allowance as a lump sum.
It would be a major piece of legislation for the Biden administration to pass, even if only for a limited period, but would prove the President’s commitment to helping struggling families through the pandemic.