The House voted to approve a short-term expansion of the child tax credit along with the restoration of some business tax credits.
Katie Dull/NPR
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Katie Dull/NPR
The House voted to approve a short-term expansion of the child tax credit along with the restoration of some business tax credits.
Katie Dull/NPR
The House overwhelmingly approved a bipartisan tax plan that combines a temporary expansion of the child tax credit with business tax cuts and credits to encourage the development of low-income housing.
The bill includes $33 billion to expand the widely used child tax credit over three years, including the ongoing tax season if the bill quickly passes the Senate. This change will make the credit available to more low-income households and allow more households to receive more credit. This number will be adjusted for inflation over the next few years. The agreement is the result of negotiations between House Ways and Means Committee Chairman Jason Smith (R-Missouri) and Senate Finance Committee Chairman Ron Wyden (D-Ore.), with Congress in a recession. It was a rare moment of bipartisanship. Paralyzed by divisions of all kinds.
The bill also restores several business tax credits, including credits for corporate research and development and interest expenses. Although these provisions are supported by many members of both parties, Republicans have primarily focused on business confidence as a motivation for supporting the package.
The Senate is not scheduled to vote on the bill, but Senate Democrats generally support it and a vote could happen soon.
Some Democrats criticized the bill for not providing enough aid to low-income families.
The current child tax credit expansion is not as generous as the coronavirus-era policy, which is credited with lifting about 3 million children out of poverty while the program was available. Several outside groups estimate that the current version will similarly help families struggling to make ends meet. The bipartisan Center on Budget and Policy Priorities estimates that the bill could benefit approximately 16 million children from low-income households in the first year. The organization estimates that 500,000 children could be lifted out of poverty.
House Speaker Mike Johnson (R-Louisiana) praised the bill Wednesday ahead of the vote, despite days of conflict within the Republican Party over the bill. In the end, Mr Johnson focused solely on business tax credits in announcing his support.
“The American Families and Workers Tax Cuts Act is an important bipartisan piece of legislation that restores conservative, pro-growth tax reform,” Johnson said in a statement. “Importantly, this bill also ends wasteful coronavirus-era programs and saves taxpayers tens of billions of dollars.”
