WASHINGTON — The IRS this week is sending out the final child tax credit payments of 2021 as Democrats struggle to keep the program alive next year.
The monthly payments started in July for more than 36 million households, giving parents as much as $300 per child. Democrats wanted to continue the policy through 2022 as part of their Build Back Better legislation.
But plans to finish the legislation before the end of the year are looking doubtful as Democrats struggle to get unanimity within their caucus.
Sen Joe Manchin (D-W.Va) has refused to say he would support the bill, which would also expand access to prekindergarten, subsidize child care and create a host of green energy tax incentives.
The child tax credit itself has always been a point of contention, with Manchin demanding a “work requirement” that would exclude the poorest families, and a lower cutoff to exclude people with higher incomes. Democrats had refused Manchin’s demands and omitted the provisions from their drafts of the legislation, and several senators have told HuffPost they thought they had an agreement to extend the enhanced credit for one year.
But Manchin declined to say Wednesday whether he supported continuing the $300 monthly payments in their current form as part of Build Back Better.
“I’ve always been for child tax credits,” Manchin told HuffPost.
It’s not an answer — everyone in Congress supports the child tax credit. The question is whether the changes Democrats made this year continue into next year.
As part of the American Rescue Plan, Democrats boosted the overall value of the credit from $2,000 to $3,600 for kids under 6, and to $3,000 for kids between 6 and 17. The law also eliminated a requirement that parents have at least $2,500 in earned income in order to qualify, made the credit fully refundable, meaning its full value can be paid as a refund, and told the IRS to send the refunds as advance monthly payments.
Without another law to continue the credit, starting next year it will revert to its previous, smaller form — a partially refundable tax credit that pays out refunds after people file their annual tax returns. Millions of households with little or no income would be excluded.
As a main Democratic holdout in the Senate, Manchin has faced relentless questioning from reporters about his position on various elements of Build Back Better, and he lost his temper on Wednesday when HuffPost followed up with a question about whether he supported continuing the child tax credit in its current form.
“This is bullshit,” he said. “You’re bullshit.”
The IRS has told lawmakers that if they want January’s child tax credit payments to go out around the 15th, they should pass their legislation by Dec. 28. With that deadline fast approaching and no resolution in sight, Sen. Ron Wyden (D-Ore.), chair of the Senate Finance Committee, said Democrats would consider moving a bill to prevent a lapse in payments.
It’s not clear if Democrats would try to pass a standalone child tax credit through the budget reconciliation process, which requires only 50 Senate votes, or if they would try to get 10 Republicans on board.
“We’re working through all of those issues now and will have some more to say about that before long but we’re looking at all of the potential procedures,” Wyden told reporters.
A handful of Republicans have favored expanding the child tax credit. Sen. Mitt Romney (R-Utah) told HuffPost he would support a bill to keep the payments going.
“I think if BBB does not pass, there will surely be an effort to have a temporary measure or a narrow measure to move more quickly, which would obviously be appropriate,” Romney said.
House Speaker Nancy Pelosi (D-Calif.) told HuffPost on Wednesday that the looming expiration of the expanded child tax credit is a useful incentive for Democrats to finish Build Back Better. She said she didn’t want to talk about an alternative scenario.
“We’re just still optimistic about BBB passing,” Pelosi said.