Democrats To Unveil $3,000 Child Benefit On Monday
With Treasury Secretary pushing for full-throttle stimulus, after which she says “full employment” can return in the US as soon as next year (and 2025 if not), House Democratic leaders are set to unveil legislation on Monday that would add at least $3,000 per child, advancing a key provision in the Biden administration’s $1.9 trillion COVID-19 relief package, according to the Washington Post.
The bill, an enhanced Child Tax Credit, would represent an expansion of the existing $2,000 Child Tax Credit under current law.
“The pandemic is driving families deeper and deeper into poverty, and it’s devastating. We are making the Child Tax Credit more generous, more accessible, and by paying it out monthly, this money is going to be the difference in a roof over someone’s head or food on their table,” said Richard Neal, Chairman of the Ways and Means Committee, who has spearheaded the creation of the enhanced Child Tax Credit bill, according to a committee spokesperson.
Under the new legislation, children under the age of six would receive $3,600 each, while ages six through 17 would earn $3,000 per child per year. Full benefits will be paid to single parents earning up to $75,000 per year, and couples earning up to $150,000, after which the monthly payments would phase out.
If passed by Congress, payments would begin in July for one year, and would become fully refundable for the year.
Currently, the Child Tax Credit provides up to $2,000 per child under the age of 17, which phases out for single parents making over $200,000 and married couples making $400,000.
The Democratic plan comes days after Utah Sen. Mitt Romney (R) shocked policymakers with a proposal to send $3,000 in direct cash per child to American families – however, “several Republican lawmakers and conservative scholars have started criticizing similar measures because they would give government aid both to working and nonworking Americans alike,” according to the Post.
Romney’s plan would have sent payments to every American regardless of income, through the Social Security Administration, while benefits that went to affluent households would then be clawed back when taxes are filed.
While Neal’s legislation would only provide payments for one year, congressional Democrats and White House officials say they would push for the policy to be made permanent later in the year.
White House officials and Senate Democrats have reviewed Neal’s legislation and are supportive of the proposal. Aides cautioned some of its details may change between now and final passage of the legislation. It is also unclear whether Democrats can pass the new child benefit through the Senate under the rules of reconciliation, the parliamentary procedure they are using to pass Biden’s stimulus without Republican votes. House Speaker Nancy Pelosi (D-Calif.) has said she is aiming to pass Biden’s relief package, which would include the child benefit, through the House within two weeks. –Washington Post
Under the bill, the IRS would base eligibility of the payments on families’ prior-year income, similar to how 2020 stimulus payments were decided. Families can update their annual income information in an online portal which would be created, in the event annual incomes decline and they become eligible for payments as a result.
Payments would not be deducted from any existing tax obligations – so those with existing liabilities would still receive $250 per month per child, or $300 for young children, which would be delivered monthly in an effort to help poorer parents facing fluctuating incomes – which the Post reports may be difficult for the IRS to achieve. According to the report, Treasury officials have told Democratic lawmakers that they’ll ‘do their best’ to implement the program. If Yellen doesn’t think it’s “administratively feasible,” she can also adjust the monthly payment structure and deliver them in the “shortest interval” possible instead.
“There is something symbolically important about this being a universal child benefit,” said Sam Hammond, a policy expert at the right-leaning Niskanen Center who helped craft Romney’s plan. “Overall, Neal’s plan would be, unequivocally, a massive win against child poverty. But it could do more to clean up the administrative complexity of the current system by making the payment universal.”
Conservatives, not RINOs, meanwhile, have argued that expanding child benefits represents a dangerous expansion of the country’s welfare programs, according to the Post.
“We know that the negative income tax experiments of the 1970s found that on net, greater benefits led to a sizable decline in employment among single mothers, and research on the state and federal welfare reforms of the 1990s found that, on net, less generous benefits led to more work in the population affected,” said Scott Winship, director of poverty studies at the right-leaning American Enterprise Institute, who says Romney’s plan would discourage poor Americans from working. “My concern is that the Romney proposal’s incentives for some low-income parents to work more would be weaker than the incentives for some to work less—both because the child allowance benefits can replace earnings foregone but also because the Earned Income Tax Credit that would be available to many single parents under the proposal would be less generous than it is now.”
Mon, 02/08/2021 – 09:37
Source: Zero Hedge News
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