By Andrew Duehren and Andrew Restuccia
WASHINGTON -- President Biden told a group of lawmakers that he intends to propose a temporary extension of an enhanced child tax credit, rebuffing requests from some Democrats who favor making the new benefit permanent.
As part of a $1.9 trillion Covid-19 relief package Democrats passed earlier this year, Congress raised the child tax credit to $3,000 from $2,000, setting it at $3,600 for parents of children under age 6 and making parents of 17-year-olds eligible. The credit, which scales down above certain income thresholds, is fully refundable and was designed to be paid in intervals, rather than in one lump sum.
But the expansion of the tax credit, which advocates said would slash child poverty in the U.S. in half, is only set to last through 2021, and some Democrats have sought to make it permanent. Mr. Biden had previously signaled he might also back a permanent expansion.
At a meeting at the White House on Tuesday with members of the Congressional Hispanic Caucus, Mr. Biden said that he expects that proposing a permanent expansion of the tax credit would run into trouble in the Senate, according to lawmakers at the meeting. When Rep. Teresa Leger Fernandez (D., N.M.) said she asked Mr. Biden about making the expanded tax credit permanent, Mr. Biden said he planned to propose extending it by several years.
"He said 'I'd love to do it permanent, but I'm not sure that I can get that through the Senate,' " Ms. Leger Fernandez said. "You could tell he was interested in making it permanent, that was the back and forth on that."
The one-year expansion of the child tax credit in the relief plan cost roughly $100 billion, according to the Joint Committee on Taxation, meaning the price tag on a permanent expansion could run into the trillions. Republicans opposed the $1.9 trillion relief plan, attacking it as an expensive laundry list of Democratic policy goals.
"Look, it's a costly proposal, we get that. We think it's a worthwhile investment for the American public. But I understand that from a CBO perspective, you know, people have to make these things work," said Rep. Pete Aguilar (D., Calif.), who attended Tuesday's meeting, referencing the Congressional Budget Office, which also scores the cost of policy proposals.
Mr. Biden's remarks to lawmakers come as the White House prepares another major spending package, focused on education and antipoverty efforts, in a follow-up to its $2.3 trillion infrastructure plan. While the details of the second package are still being worked out, people familiar with the measure said it could cost more than $1 trillion, with funding money for child care, paid leave, universal prekindergarten education and tuition-free community college. The cost is expected to be offset with tax increases, including an increase in the top income-tax rate and higher taxes on investments gains.
"The details of that package are still being finalized, so speculation as to its final contents is premature at this point," White House spokesman Michael Gwin said in a written statement.
The Washington Post previously reported that the White House is considering proposing a temporary extension of the child tax credit through 2025 as part of a roughly $1 trillion package.
In a statement Tuesday, a group of Democrats called on the White House to propose making the expanded child tax credit permanent.
"No recovery will be complete unless our tax code provides a sustained pathway to economic prosperity for working families and children. Permanent expansion of CTC will continue to be our priority," the group of Democrats, which included Reps. Rosa DeLauro (D., Conn.), Suzan DelBene (D., Wash.), and Ritchie Torres (D., N.Y.), and Sens. Sherrod Brown (D., Ohio), Cory Booker (D., N.J.), and Michael Bennet (D., Colo.).
Temporarily extending policies before warning of the consequences of letting them expire is a common tactic on Capitol Hill. Republicans are already arguing to extend provisions of the 2017 tax law set to expire after 2025, including a bigger standard deduction, lower individual tax rates and a larger estate-tax exemption.
As they look ahead to the next White House proposal, Democrats are also considering how to proceed with Mr. Biden's infrastructure plan. Lawmakers and the White House are holding a series of meetings to determine whether a bipartisan compromise is possible, with a group of Senate Republicans working on a counteroffer of roughly $600 billion to $800 billion.
Senate Minority Leader Mitch McConnell (R., Ky.) said Tuesday he could support a modest infrastructure bill that is paid for. The Biden administration has proposed increasing taxes on corporations to cover the cost of their $2.3 trillion plan, though Republicans have rejected those tax hikes.
"We're open to a more modest and targeted infrastructure bill," he said. "And for myself, it's one thing to run up the national debt when you have a 100-year pandemic. And just to keep routinely adding trillions of dollars, the national debt, I think is ill-advised for the future of the country."
Write to Andrew Duehren at email@example.com
(END) Dow Jones Newswires
April 20, 2021 18:38 ET (22:38 GMT)Copyright (c) 2021 Dow Jones & Company, Inc.