AMERICAN RESCUE PLAN

What have the Democrats said about paying $ 3,600 per child?

Democrats released part of their sweeping $1.9 trillion covid-19 relief bill on Monday, including $1400 stimulus checks and enhanced child benefits.

What have the Democrats said about paying $ 3,600 per child?
Kevin Lamarque REUTERS

Third stimulus check IRS updates today: live. 

The House Ways and Means Committee presented their portion of the developing coronavirus relief package proposal. Based on President Biden’s American Rescue Plan, it includes providing up to $3,600 per child for American families for the 2021 fiscal year.

The enhanced child tax credit has been promoted since 2003 by Representative Rosa DeLauro who urged the White House to include the provision in the President's plan to help the US recovery from the economic crisis brought on by the covid-19 pandemic. The proposed measure is temporary but there is a push to make it permanent to tackle childhood poverty.

What are Democrats proposing in the enhanced child tax credit?

“People often say stimulus, but this is about stability,” said Richard Neal, Chairman of the House Ways and Means Committee, at a joint press conference with Massachusetts Governor Charlie Baker.

The proposal that Neal is spearheading would give American families an enhanced child tax credit of $3,000 per child 17 and younger and $3,600 per child under 6 for the 2021 fiscal year. Starting in July half the amount would be sent to families as monthly direct payments of $250 and $300 respectively through December. The other half families would claim on their 2021 income-tax filing.

It would see the child tax credit expanded to lower income families that are currently ineligible for the credit due to work requirements and an earnings floor of $2,500.

“This is how the tax code is supposed to work for those who need it most, and so long as I am Chairman of the Ways and Means Committee, it’s what you can expect to see from us,” Neal added.

The plan could see childhood poverty halved

“The moment is here to make dramatic cuts in child poverty that could improve the lives and the future of millions of children,” Representative Rosa DeLauro said on Sunday.

Researchers at Columbia University have found that the Biden Plan, the framework for the current proposal, could cut child poverty by as much as 54 percent. According to the Center on Budget and Policy Priorities (CBPP) an expanded child tax credit would lift more than three million people in the US, including two million children, over the poverty line.

“This credit is an extremely effective tool in combating child poverty, and Democrats are working to make the expanded version fully refundable and be provided to eligible individuals on a monthly basis,” Neal said in a statement.

There may be some difficulties with implementing the plan

Neal has admitted that there could be some issues with implementing the plan due to how the payments would be made. The payments would be sent out by the IRS and be based on the income-tax filings from the previous year. His proposal calls for creating an online portal which individuals could use to update their information in the event there is a change in their situation. He said that the plan would require investing money in technology improvements for the IRS and Treasury Department.

Senator Ron Wyden, the Chair of the Senate Finance Committee, also expressed concern about potential difficulty the IRS might face. “This ties into our bigger challenge in rebuilding the IRS,” he told the Washington Post. “We can’t ask the IRS to do more and more and not provide adequate resources over the long term.”

Most Democrats are in favor of the proposal

Senate Democrats and the White House have expressed support for the plan. In a statement from the White House “The President has made it a central priority of his first legislative proposal to cut child poverty in half this year through a child tax credit expansion in the American Rescue Plan, and looks forward to working with members of Congress on this legislation.”

In the Senate, Senators Michael Bennet and Sherrod Brown are working on matching legislation in the Senate. Senator Cory Booker who is working on a similar initiative with “baby bonds” told the Washington Post “Of all the policy issues being discussed this Congress, of all the things we are working on, the biggest impact we can make for economic justice in our country, and enact measurable transformational change, lies within this policy that would slash child poverty.”

Democrats are moving quickly to pass covid-19 relief bill

House Democrats aim to get their bill passed in the next two weeks. Even though they have a slim majority they should be able to pass it with or without GOP support. The next hurdle will be the Senate where the overall package may run into resistance from more conservative Democrats worried that some items in the bill, most notably the $1400 stimulus checks will go to upper income earners under the current House proposal.

Senate Democrats want to get the legislation to President Biden’s desk for signing before mid-March when current extended unemployment insurance and other pandemic-related measures expire.

“The pandemic is now a year old and a lot of people in the American family are hurting, and we think that this assistance in the timeline that I have laid out is entirely reasonable.” Neal said.