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Talk of additional stimulus funds never seems to die. Read on for three signs that talks may actually be warranted.
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Just about the time common sense tells us that stimulus is dead as a doornail, news comes out of Washington, D.C., breathing new life into the possibility of more. Based on what we’re currently hearing, we’re closely watching news on the expanded Child Tax Credit.
Quick review
A tremendous amount of news and information has flooded us over the past few years, so we can all be forgiven for forgetting the precise details of the expanded Child Tax Credit. Consider these points the highlight reel:
Before the pandemic hit in 2020, the Child Tax Credit provided tax-filing households up to $2,000 per child. The money was paid after taxes were filed.Given the hardship that faced American families in the heart of the COVID-19 pandemic, the Child Tax Credit was increased to provide $3,600 per child under age 6 and $3,000 for kids ages 6 to 17. Rather than wait until tax time to receive the credit, parents could arrange for a portion of the funds to be delivered monthly from July through December 2021. Checks hit bank accounts nationwide for $300 per month for kids under 6 and $250 for children up to age 17.After he was elected, President Biden made it clear that he sees value in giving American families the money they need to feed, clothe, and house their children. His argument was supported by the fact that millions of American children were lifted out of poverty during that time.The GOP-led Congress killed the program, with the final checks sent in December 2021.
And let’s face it, since that day, we’ve watched the horizon, read the tea leaves, and otherwise looked for signs that might indicate there’s life left in the expanded version of the Child Tax Credit.
Today, we’re seeing these three signs.
1. Biden’s tweet
On April 8, President Joe Biden tweeted, “My budget restores the full Child Tax Credit, which spurred the largest-ever one-year decrease in child poverty in American history. No child should have to grow up in poverty.”
It’s not the first sign that the president is serious about resurrecting the expanded Child Tax Credit, but it does serve as a reminder that he’s not letting the subject drop.
2. Omar’s call to action
Ilhan Omar, the Congressional representative from Minnesota’s 5th district, recently wrote an op-ed in the Star Tribune, outlining bold steps taken by Minnesota Gov. Tim Walz and Lt. Gov. Peggy Flanagan. Walz and Flanagan want to send eligible Minnesota families direct survival checks that expand affordable childcare options and boost K-12 funding.
Omar said the proposal would help lift millions of middle- and lower-income Minnesota families up. Omar referenced when she was a struggling young mom, attending school full-time and working to support her children. She says such assistance would have “made a monumental difference for my family.”
Before signing the letter though, Omar says ending child poverty should not fall on states alone. Given the overwhelming evidence of the success of the expanded Child Tax Credit and American Rescue Plan’s anti-poverty measures, she joins the fight to reinstate the expanded Child Tax Credit nationwide and make it permanent.
Joining politicians like Bernie Sanders and Mitt Romney, former Treasury Secretaries Robert Rubin and Jacob Lew, have also called for Congress to make the expanded Child Tax Credit permanently available to families with limited income. They don’t suggest sending “extra” money to families so they can increase their investment portfolios. Their goal is to help families meet their basic needs.
3. Shoring up the IRS
For the past decade or so, there’s been an odd battle going on in Congress that pits Conservatives against the IRS. How it started is unclear, but it boils down to this: Republicans have decided that the IRS is targeting Conservatives. In retribution, those Congressional Republicans have slowly cut the IRS budget, leaving the agency with staff shortages and outdated technology.
This may be changing. When the Biden administration passed the Inflation Reduction Act in 2022, $80 billion was earmarked to help the IRS hire new workers, improve customer service, and update its technology.
Given how Congressional “payback” involved gutting the IRS, there were serious questions about whether the revenue agency could manage monthly Child Tax Credit distributions. There’s reason to hope that a flood of new employees and state-of-the-art technology make such an undertaking possible.
The challenge is predicting how Congress will act on any particular topic. Some politicians won’t cross party lines, even if they know it’s in the best interest of their constituents. Others will only act if their move is endorsed by the campaign donors who keep them in office. And others are so focused on the 2024 election that they’ll throw their bodies in front of a figurative train to prevent President Biden from taking a victory lap.
In other words, we don’t know anything for certain, but we do watch with interest. Knowing that significant changes are typically tied to steep uphill battles, we suspect it will be a tough fight.
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