At the top of the list is the increase in the child tax credit, a measure that advocates believe could generate bipartisan support and which, according to analysts, would reduce child poverty by almost half. But some lawmakers and outside experts hope Democrats will also struggle to keep expanding income tax credit for work and a second program for child and dependent care, while additional extensions of food assistance and increased unemployment benefits are also likely.
“Taking something out of [tax] code is generally more difficult than inserting something into the code, ”House Ways and Means President Richard Neal (D-Mass.) said. “It is unlikely that what we did will go away.”
The approach suggests that Biden’s $ 1.9 trillion plan – as historic in size and scope as it is – could represent only the first step in a potentially significant expansion of the welfare state and a major shift towards expand the government’s role in helping the poorest Americans.
And that, in turn, can represent a major breakthrough for progressive leaders who have been pushing for more generous benefits for years.
“We have been focused on these issues for a long time, but the moment has found us,” said Congresswoman Rosa DeLauro (D-Conn.), Who first introduced legislation to make child tax credit permanent 18 years ago this week. “We are ready to move forward with a series of areas that in the past have not been able to achieve this traction, this universal support.”
Biden said on Friday that the bill “changes the paradigm”, moving away from drip economics theory and instead putting workers first – the first time this has happened, he said, since that Lyndon Johnson was president in the 1960s.
“It is time to build an economy that grows from the bottom up,” he said, “and from the middle out.”
Cementing these priorities will not be easy, however, as Republicans classify Biden’s relief bill as a bloated progressive wish list and sound the alarm about rising deficit spending levels. The Federal Responsible Budget Committee, which advocates deficit reduction, estimates that the $ 1.9 trillion plan may more than double in cost, as several programs become permanent or extend beyond their due dates. current expirations.
In addition to the cost, other Republican Party lawmakers are raising concerns about the extent of programs that have been approved as temporary measures under the guise of coronavirus relief when they have little to do with the pandemic.
“We need to see through these lenses,” said a policy advisor to Congressman Jason Smith (R-Mo.), Who has supported child tax credit in the past. “Is it a relief for Covid or just another Democratic priority?”
Rep. Kevin Brady of Texas, the top Republican on the Ways and Means Committee, said it is clear that Democrats are “eager to create bigger and bigger programs” – the tax credit for children, but also sick leave for the family and a permanent role for the federal government in unemployment benefits. But he warned that sending checks to families would do little to correct the systemic problems that caused their difficulties in the first place.
“Their tactic of merely spending more – which effectively lost the war on poverty – instead of addressing the underlying symptoms that caused that poverty, I think it will fail,” he said.
Brady said that including such generous benefits on a temporary basis through the rescue plan does not automatically mean that they will come to stay. But historically, it has been difficult, if not impossible, for politicians to undo tax cuts or tax credit expansions once enacted. And Republicans have had more trouble arguing against the deficit since they passed major tax cuts under then President Donald Trump in 2017, a plan that also cost more than $ 2 trillion, said Brian Riedl, a former Republican economic adviser to long date.
“The prospect of an abyss of benefits that will shake the middle class is too unpopular for politicians to even contemplate,” said Riedl, who now works as a specialist in economic policy and taxes at the right-wing Manhattan Institute.
“The right way to think about this bill,” he said, “is so much like an initial payment on a progressive goals wish list that will extend far beyond the pandemic and the recession.”
The child tax credit, which was expanded with the new law from $ 2,000 to a maximum of $ 3,600 per child for a year, it is bound to be the first temporary change that could become permanent, in part because Biden himself has expressed support for this.
In a call with House Democrats, in which the president endorsed the permanent extension, he also said his recommendation to do so was “Listen to Rosa” DeLauro, according to three people who heard or were informed of the call.
Supporters of the children’s tax credit, which has also been made available under the relief plan for millions of low-income and low-income families, say there is an impetus both in the House and in the Senate to make it permanent. They are exploring whether Biden’s second stimulus package – another multi-trillion dollar plan that Democrats hope to launch in late May – could be a vehicle for that move.
By halting progress there, Democrats could push for autonomous legislation – which DeLauro introduced again last month with Washington’s representatives Suzan DelBene and New York’s Ritchie Torres – or turn it into an approved tax package before the end of the year. .
“It is fair to say that the child tax credit was the most important, but least controversial, provision in the American Rescue Plan,” said Torres. “So there are reasons for hope.”
Expanding is also an idea that has won support on both sides of the corridor in the past – Republican Senator Mitt Romney of Utah last month put forward his own proposal on how to do it. And it is an area where Democrats see a real opportunity to make a lasting change, considering how difficult it would be not to extend the benefit when families grew up and depended on regular payments directly to their bank accounts.
Democrats and supporters also argue that the plan will pay off considering how much the United States already spends trying to combat child poverty each year. And they are focused on acting quickly to curb programs they have advocated for years.
“Policies like this were good ideas before the pandemic, [and] even more important during the pandemic, ”said DelBene. “And it is extremely important that we continue this effort in the long term due to the impact that we can have.”