Republicans and some moderate Democrats opposed efforts to expand the program.
About 450 economists signed an open letter Thursday urging Congress to make a permanent extension of President Biden’s child tax credit program, an economic measure that has prompted intense debate on Capitol Hill.
Economists drawn from universities and institutions across the country argue that preliminary research has shown that a sustainable child tax credit can “dramatically reduce childhood poverty by improving educational, health-related and career outcomes for low-income youth.” will reduce substantially”. Letter quoted A Study Which concluded that a sustainable program would cost 16 cents for every $1 in new economic benefits.
“A permanently expanded CTC would provide tremendous immediate and long-term benefits for children and their families and would be unlikely to meaningfully reduce employment,” the letter said. “For these reasons, we believe that the benefits of expanded CTC far outweigh the costs.”
Under the current Enhanced Child Tax Credit program enacted in Biden’s $1.9 trillion “American Rescue Plan,” eligible parents receive $3,000 per child ages 6 to 17 and $3,600 per child under age 6 each year. can do. Half the money is disbursed monthly in direct cash payments, with the other half applied as a credit on the 2022 tax return.
Republicans and some moderate Democrats opposed efforts to expand the program, arguing it would be too costly for taxpayers and discourage job seekers as the US economy recovers from the COVID-19 pandemic.
In their open letter, the economists argued that gradual cuts in pay for high-income parents, starting at $75,000 for individuals and $150,000 for married couples, ensured an incentive to pursue work.
The economists said, “A design feature limiting such effects is that the expanded CTC amount will not end up at higher levels of income; thus, most households will not see a decline in their CTC amount as their income increases.” “
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Economic experts are divided on the potential impact of the increased benefits. The Heritage Foundation, a conservative think tank, has referred to Biden’s program as a “bait and switch” that would impede participation in the job market.
“Contrary to the administration’s rhetoric, the primary focus and only permanent feature of the child allowance policy will not be tax relief, but the elimination of all work requirements and work incentives from the current child loan program,” the group said in July. “In pursuing this change, the administration clearly attempts to overturn the foundations of welfare reform established during the Clinton presidency.”
Democrats’ $3.5 trillion budget reconciliation bill would extend the program through 2025, and Biden and other top Democratic lawmakers have called for it to be made permanent.
The debate could present an impediment to the passage of the bill in the Senate. Sen. Joe Manchin, DW.VA, a prominent swing voter, has called for a work requirement to be implemented for parents who receive benefits.