Democrats are using the opportunity presented by President Biden’s economic relief package to propose legislation that could further end the financial struggles experienced by families with children.
The Washington Post first reported on the bill, led by Rep. Richard E. Neal (D-Mass.), which is set to be unveiled today. If passed, the measure would expand the Child Tax Credit and direct the IRS to provide at least $3,000 in direct cash benefits per child in American households over this year.
Families would receive $3,600 per child under the age of 6. Similarly to the $1,400 stimulus checks that Americans are awaiting as part of the overall relief package, these proposed cash benefits would be based on families’ reported income from the last tax year. A “safe harbor” provision would be included in the measure, in order to protect families from having to pay back the benefits if the IRS later finds that they were no longer eligible for the benefit based on a change in income from the prior year.
From Washington Post:
The legislation would create an online portal, managed by the Treasury Department, for families to update their information if their annual incomes decline and they became eligible for the payment as a result.
The IRS would begin sending out payments July 1 in a similar fashion to how it sent out the stimulus payments, directly depositing the payments in taxpayers’ bank accounts. Crucially, the benefits would not be deducted off taxpayers’ existing tax liability, meaning American parents would still receive $250 per month per child — or $300 per month per young children — even if they have an existing tax obligation with the IRS.
The benefits will also be delivered monthly in an attempt to help poorer parents facing fluctuations of income. That may be difficult for the IRS to achieve. Treasury officials have told Democratic lawmakers that they would do their best to implement the program. But concerns remain about the capacity of the tax agency to stand up the benefit during a pandemic and a filing season that has already stretched the IRS thin.
“This money is going to be the difference in a roof over someone’s head or food on their table,” Neal said about the proposal. “This is how the tax code is supposed to work for those who need it most.”
Millions of Black Americans would benefit from a reduction in poverty under the proposal, according to a projection by the Center on Poverty and Social Policy at Columbia University.
Though Sen. Mitt Romney (R-Utah) has also proposed a plan to provide direct cash benefits to families with children this year, his would eliminate other welfare programs including Temporary Assistance for Needy Families. It remains to be seen if Democrats can pass the child benefit proposal through the reconciliation process they used their narrow majority in the Senate to approve Biden’s $1.9 trillion relief package, which Republicans continue to oppose. House Speaker Nancy Pelosi has signaled her desire to pass the overall COVID relief package in the House in the next two weeks.