Boosted child tax credit not on White House list of tax priorities
The recent tax priorities outlined by the White House have notably excluded an expansion of the child tax credit, which has garnered support among many Republicans. As Congress works on a critically important fiscal overhaul via budget reconciliation—allowing legislation to bypass the filibuster—Republicans aim to extend the 2017 Tax cuts and Jobs Act (TCJA).While the White House has prioritized measures such as eliminating taxes on tips and overtime pay, the child tax credit remains at its current level of $2,000 instead of reverting to the previous $1,000. Despite the omission, Republican lawmakers are advocating for an increased child tax credit, with some pushing to double it within upcoming legislation.Proponents of this increase argue its importance for demographic reasons,given the declining birth rate in the U.S., which has dropped to the lowest in a century. Observers believe there could still be support for a child tax credit enhancement during the reconciliation process, as the GOP increasingly embraces populist policies aimed at fostering family growth.
Boosted child tax credit excluded from White House list of tax priorities
The White House‘s list of tax priorities this week featured a notable omission: an expansion of the child tax credit, a policy favored by a growing number of Republicans.
Congress is working on a major fiscal overhaul that Republicans plan to pass through budget reconciliation, a legislative process that allows for bills to bypass the filibuster and pass with only a simple majority in the Senate.
This will give the GOP the opportunity to extend the 2017 Tax Cuts and Jobs Act, known as the Trump tax cuts, and expand or add other provisions to the tax code. The White House has now released a list of its priorities, but increasing the child tax credit, something that Vice President JD Vance has pushed for, did not make the cut.
When contacted by the Washington Examiner about enhancements to the child tax credit not being included, a White House spokesman sent a link to a social media post listing the Trump tax priorities.
Among them are eliminating taxes on tips, ending taxes on Social Security, eliminating taxes on overtime pay, adjusting the state and local tax deduction cap, removing special tax breaks for billionaire sports team owners, closing the carried interest tax deduction “loophole,” and introducing tax cuts for made-in-America products.
The biggest piece of the pie, though, is the overall extension of the TCJA. While the White House is not pushing for expanding the child tax credit from its current $2,000 level, if the tax cuts are extended, it would stop the credit from reverting back to the $1,000 level, where it was prior to the TCJA being signed into law.
As the GOP embraces populism more tightly, an increasing number of lawmakers have called for a larger child tax credit and more economic incentives for family creation.
Some Republican lawmakers are already pushing for a boosted child tax credit in reconciliation.
For instance, Rep. Blake Moore (R-UT) is pushing for his plan to more than double the child tax credit to be included in the legislative vehicle.
Despite a bigger child tax credit not being listed among the White House’s priorities, Moore said he hopes there will be a boost to the prized credit in reconciliation. He said he appreciated the Trump administration’s “whole-of-government approach” to family creation.
“The Trump-Vance administration has been vocal about their intention to promote pro-family policies, and I remain hopeful that child tax credit modernization will be included in reconciliation,” he told the Washington Examiner. “We have a great opportunity before us in the reconciliation process to deliver real results for Americans, and I will continue to push for this bill’s inclusion and share Utah’s great model of supporting families and building strong communities.”
Josh McCabe, the director of social policy at the Niskanen Center, said he was not very surprised that language on the child tax credit was left out of the White House’s list of tax priorities but that he thinks there is enough support for an increase to be included at some point in the reconciliation process.
“I saw that report and said, ‘OK, you know, this is just sort of short-term politics,’” McCabe told the Washington Examiner. “In the long game I think there’s going to be something on the CTC in terms of expanding it in some capacity.”
McCabe pointed out that the child tax credit proponents might not be the loudest group on Capitol Hill. For instance, proponents of increasing the SALT cap from $10,000 have been extraordinarily vocal about including changes to the cap.
Those who support a bigger child tax credit will also have some strong leverage in the House, given Republicans’ wire-thin majority.
In 2017, when the TCJA was first crafted, Republicans could spare to lose votes in the House, but the Senate was tighter. Now, only a few House members can withhold their votes to exact concessions because Republicans need every member’s vote to pass legislation.
Notably, in 2017, then-Sen. Marco Rubio (R-FL) successfully used the thin margins in the Senate to exact concessions and force lawmakers to include a bigger child tax credit. He threatened to withhold his vote on the tax plan unless the credit was boosted.
Some child tax credit proponents say it is necessary for demographic reasons, as Vance has talked about. For instance, in interviews with the Washington Examiner, both Kari Lake, who ran for Senate in Arizona, and Sen. Bernie Moreno (R-OH) brought up the issue.
The total fertility rate, or the average number of children a woman will have in her lifetime, plummeted to 1.62 in 2023, the lowest level in a century, according to the Centers for Disease Control and Prevention.
The rate has trended down since 2007, when the total fertility rate reached the replacement rate of 2.1 births per woman. Demographers define the replacement rate as the number of births that will keep a population stable, with no growth or decline.
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