A bipartisan compromise to expand the child tax credit (CTC) and restore some corporate tax breaks is now imperiled, due to opposition from some U.S. Senate Republicans, The Washington Post reported.
Sen. Mike Crapo (R-Idaho), the ranking member of the Finance Committee, opposes the bill, as do other top party officials. Although Most Democrats back it, they may not have enough Republican votes to overcome a filibuster. Some Republicans who like the compromise plan say they might prefer to deal with the issue next year, according to the Post, as they hope to control the chamber after the November elections and will have to confront expiring provisions of the Tax Cuts and Jobs Act (TCJA).
“I think from a political standpoint, a lot of Republicans, me included, feel like we’ll have more leverage a year from now than we have today,” Sen. Kevin Cramer (R-N.D.) said, the Post reported. “We want to help working families. We want to help the employers who support those working families, who hire those working families, and we have a year to do it. And we don’t need to rush into it.”
Other Senate Republicans would like Majority Leader Chuck Schumer (D-N.Y.) to bring the $79 billion legislation to the floor.
“I think we need to call their bluff on it,” Sen. Markwayne Mullin (R-Okla.) said of his colleagues. “There’s a lot of people that may not commit to it until it goes on the floor. I told [Sen Ron Wyden (D-Ore.), chair of the Finance Committee] to tell Schumer bring it to the floor. Make people vote against the tax bill. I mean, when it comes time to actually make the vote, and you’re going to vote against the tax bill? As Republicans? Let’s try that. Let’s see if you’re really going to do that.”
Estimates by nonpartisan entities say it would lift 400,000 children out of poverty. A 2021 expansion of the CTC kept 3 million children out of poverty, according to research conducted by Columbia University’s Center on Poverty and Social Policy. The expansion expired at the end of 2021, and child poverty spiked immediately afterward.
“Before we talk about what it means for Washington, let’s talk about what it means for people who are hurting,” said Wyden, the Post reported. “For small-business people who aren’t going to be able to make payroll, what it means for a kid in a large family and they’re not going to get much to get a pair of sneakers or diapers.”
Business groups are advocating for the corporate tax provisions, saying that limiting deductions on research and development have restrained spending on product innovations that could bring down consumer costs.
“The small-business community has been in a bit of a whipsaw between administrations and between different parties in the chambers of Congress," said Joe Shamess, managing partner at Flintlock Capital, a venture capital firm that invests in small businesses, in an interview with the Post. "There’s an absolute need for some level of certainty to return to the business community. One of the ways that you do that is through tax policy."
To win over Republican senators, Wyden and Democratic leaders have offered to strip out sections that Crapo and other Republicans opposed, such as a “look back” provision that would allow low-income families to use a prior year’s return to earn a larger tax credit.
“I think there’s a potential deal to be had here,” said Sen. Josh Hawley (R-Mo.). He also wants to eliminate the “look back” and link the legislation to another bill to compensate victims of nuclear tests and radiation, part of a strategy among bill supporters to attach the tax legislation to other, more broadly popular bills. “That’s doable, totally doable.”
Schumer has been reluctant to bring the legislation to the floor without seeing how he could gain the 60 votes necessary to defeat a filibuster. He told legislators in April that the Senate could consider the bill “in the weeks and months ahead,” without laying out a specific timeline.