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Much of the focus of the just-passed $1.9 trillion COVID-19 relief bill has been on things like stimulus checks to individuals, aid to states and unemployment insurance. But two lower-profile provisions could be a sign of long-term changes to the American social safety net if – as Democrats hope and Republicans promise to oppose – they eventually become permanent.
The first is a child tax credit currently set to bump up benefits for families and could begin a "fundamental shift in child tax policy," according to one analyst.
The second is a limited paid leave provision that will reinstate some protections for federal workers during the pandemic. Some protections had been in the The Families First Coronavirus Response Act in 2020, including new paid options available for many workers (not just federal workers). Those provisions, which notably exempted companies with more than 500 employees, expired over the winter.
In an interview with Yahoo Finance, Sen. Kirsten Gillibrand (D., N.Y.) touted both efforts, especially paid leave.
“One of my goals is to make paid leave permanent,” she said. “We are still the only industrialized country in the world without access to paid leave and most workers do not have access.”
‘This pandemic would not be as nearly damaging’
Pro-paid leave activists have praised the bill but said “recovery requires longer-term work policies we’ve needed but haven’t had.” Statistics show that around 19% of workers in the United States have access to paid family leave through their employers, with 40% having access to medical leave through employer-provided short-term disability insurance.
Gillibrand has long pushed legislation called the FAMILY Act that would create a permanent and national paid family and medical leave program for serious medical events. She has also pushed comprehensive legislation that encompasses both sick days and family and medical leave. The hope is to make it consistent for all workers when the need to take time off from work for either medical issues or family issues – like caring for a newborn.
The New York senator appeared as part of Yahoo Finance’s special coverage of International Women’s Day. She argued that “if we had had paid leave, this pandemic would not be as nearly damaging as it's been for women in the workplace and for parents in the workplace.”
Gillibrand said the child tax credit was “one of the most ambitious investments” in the package; under this provision parents could get a check for $300 per child per month for the rest of the year (or up to $3,000 per child, or $3,600 for each child under the age of six).
Previously, the credit was based on taxable income, but the new legislation does away with the need for certain earned income levels. “I think that in and of itself is a huge shift,” Erica York, an economist at the Tax Foundation, told Yahoo Finance in a separate interview. “It's going to mean that millions of people who didn't have access to the child tax credit before now have access to it.”
A hefty price tag
The opposition to making either of the provisions permanent will likely revolve around cost. The Center for a Responsible Federal Budget recently estimated that the $1.9 trillion bill would swell to over $4 trillion if some policies in the current bill are extended.
Making the child tax credit expansion permanent would likely have the heftiest price tag. In the current bill, it's expected to cost $110 billion, but extending it permanently could increase the federal debt to an additional $1.1 trillion through 2031.
The bill appears set to become law later this week after the Senate passed an amended version this weekend. The House of Representatives is scheduled to approve the changes on Tuesday before it heads to President Biden’s desk for his signature.
While the bill appears set to pass without the support of a single Republican member of Congress, Gillibrand says “the American people on a bipartisan basis asked for this relief.”
Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.