A bipartisan group of lawmakers released a roughly $78 billion tax package Tuesday that would enhance the child tax credit and restore several business tax breaks, as well as boost funding for affordable housing and disaster relief. However, the deal faces many hurdles to passage.
Some congressional Democrats and progressive groups have been pushing hard to restore at least part of the expanded child tax credit that greatly reduced child poverty and stabilized families’ finances in 2021. Meanwhile, certain Republicans and business interests have sought to reverse limits on companies’ ability to deduct investments in machinery and equipment and other tax relief.
While the bipartisan and bicameral support is notable, this deal was not negotiated by the leadership and its pathway through Congress remains unclear. Some lawmakers are pushing to attach it to a must-pass bill to help ease its passage, but the bill may need to go as a standalone bill. The lead negotiators are optimistic about the deal, but Congress has a lot else on its plate — and accomplishing anything significant in an election year always tends to be more challenging.
Plus, the deal lacks buy-in from other key players such as Rep. Rosa DeLauro of Connecticut, the top Democrat on the House Appropriations Committee who believes the child tax credit expansion doesn’t go far enough.
The deal would beef up the popular child tax credit, though the enhancement would not be as generous as the one contained in the Democrats’ American Rescue Plan Act in 2021, which increased the size of the credit for certain families, enabled many more parents to claim it and distributed half of it on a monthly basis.
The new package calls for enabling more lower-income families to claim the credit by increasing its refundability over several years and eliminating the penalty for larger families. It would also adjust…
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