Biden’s budget is pushing to renew the older child tax credit for families
Parents and children participate in a demonstration organized by the ParentsTogether Foundation in support of the child tax credit portion of the Build Back Better bill outside the US Capitol on December 13, 2021.
Sarah Silbiger | Bloomberg | Getty Images
President Joe Bidens Budget proposal for the 2024 financial year contains a variety of suggestions for family support.
That includes a key proposal — the reintroduction of the Enhanced Child Tax Credit, which temporarily granted eligible parents up to $3,600 per child in 2021 through the American Rescue Plan.
Biden’s plan is to increase the current maximum child credit from $2,000 per child to $3,600 per child under age 6, or $3,000 per child age 6 and older.
The budget also includes making the child tax credit permanently fully refundable, meaning people would still be eligible if their tax liability was less than the child tax credit.
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The improved child tax credit — including monthly payments of up to $300 per child — helped halve poverty, the “lowest level in all of American history,” Biden said said in a speech about the budget on Thursday.
“We were very pleased to see the White House doubling down on its efforts in support of this direct cash payments program,” said Anna Aurilio, federal campaign director for the advocacy group Economic Security Project Action.
The move to expand the loan would be accompanied by other policy proposals in the president’s budget aimed at helping both individuals and families.
The labor income tax deduction is to be permanently expanded for childless employees with the aim of protecting low-income earners from poverty.
The plan provides for 12 weeks of paid family and sick leave and seven days of paid sick leave for all workers. It also aims to expand access to affordable childcare and free preschool. The budget also calls for the expansion of Medicaid’s home and community-based services, which would allow the elderly and disabled to stay at home and would relieve the burden on family caregivers and home caregivers.
“It will help millions of parents go to work knowing their children will be taken care of,” Biden said of the budget Thursday.
Admittedly, the proposals — including the push to renew the expanded tax credit — could be difficult to get through Congress.
Biden aims to increase benefits and reduce the deficit
With the budget, Biden aims to cut deficits by nearly $3 trillion over 10 years.
A Analysis by the tax foundation found that extending the child tax credit to three years, creating a monthly payment option, and permanently repaying it in full would cost more than $429 billion over 10 years. Expanding the earned income tax credit for workers without qualifying children would cost about $156 billion.
However, other research suggests that government spending could have a positive impact.
For every $1 spent on the child, a tax credit would result $10 in community benefitaccording to the Columbia University Center on Poverty and Social Policy.
The child tax credit just wasn’t big enough to have an impact on inflation, but it was big enough to help families meet rising costs.
Federal campaign manager at the interest group Economic Security Project Action
“People support it,” Aurilio said. “It’s very popular, especially now.”
That’s how inflation did increased the prices of everyday items than for decades.
While some argue that stimulus measures like an increased child tax credit would stoke inflation, other experts say this is not true.
“The child tax credit just wasn’t big enough to have an impact on inflation, but it was big enough to help families meet rising costs,” Aurilio said.
in a (n Open letter to the leaders of Congress in December, more than 200 economists argued that extending the child tax credit for 2021 would help low- and middle-income families cope with rising costs and contribute to better economic health.
“The extension of the extended child tax credit is one of the simplest, most effective and most direct tools we currently have to help families deal with the impact of inflation on family budgets.” they write.
But adopting a new policy won’t be easy, Aurilio said. “K Street is deeply committed to reinvigorating corporate tax breaks.”
“We’ve been saying all along that this shouldn’t happen unless Congress also relieves families and workers by expanding the CTC and EITC,” she said.
While some Democratic leaders have championed the policy, other leaders, such as Senator Mitt Romney, R-Utah, have spearheaded efforts to tighten universal child benefits.
“The biggest challenge, I think, for a Republican or a Democrat is going to be how you’re going to pay for it,” Romney said said in an interview last year. “And my own view is this, by skimping on the size of the program.”
Romney also called for a possible repurposing of funds from other benefits, such as the child portion of the Earned Income Tax Credit.
https://www.cnbc.com/2023/03/10/bidens-budget-pushes-to-renew-bigger-child-tax-credit-for-families.html Biden’s budget is pushing to renew the older child tax credit for families