Senate Democrats weigh extending Biden's monthly $300 checks to families to 2024 in $3.5 trillion social-spending plan

joe biden
President Joe Biden giving remarks from the East Room of the White House on August 16. Anna Moneymaker/Getty Images
  • Oops!
    Something went wrong.
    Please try again later.
  • Senate Democrats are weighing an extension of President Joe Biden's child allowance to 2024.

  • Some low-income families may be excluded from the full benefit after then over budget constraints.

  • A reduction in the plan's size may further jeopardize its extension.

  • See more stories on Insider's business page.

Senate Democrats are weighing a three-year extension of President Joe Biden's revamped child tax credit in the $3.5 trillion social-spending plan, per a Senate Democratic aide familiar with the ongoing discussions. But it could be pared back because of the program's cost and the prospect of Democratic moderates demanding cuts to the size of the package.

The aide spoke on condition of anonymity to share details of private negotiations and stressed it was in flux. The child tax credit would be extended until 2024, and the amount would drop back to $2,000 in a presidential election year. But families who owe little or no taxes would get the full size of the benefit permanently, otherwise known as "full refundability."

Yet to save $35 billion, Democrats in the upper chamber haven't ruled out scrapping full refundability for the rest of the decade. Top Democrats like Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi are pressing to maintain it.

"Nothing is locked in," the person said. "The White House is pushing for it. We know Schumer is pushing for it. We definitely know Pelosi is pushing for it. But it's a money game at this point."

Congressional committees are in the midst of drafting their parts of the social-spending bill. Democrats intend to muscle it through a process known as reconciliation that requires only a simple majority, bypassing what's likely to be unanimous GOP opposition.

The Senate Finance Committee has been allocated $385 billion to extend the child tax credit, along with another pair of programs like the earned-income tax credit and the child and dependent care tax credit, a person familiar told Insider. A three-year extension of the child tax credit alone amounts to $330 billion, per the Joint Committee on Taxation, underscoring limited funding some initiatives will have as Democrats jostle to lock down their sweeping economic priorities.

The child tax credit provides up to $300 a month for each child under 17. The Democratic stimulus law in March turned it into a cash benefit for most American families. Individuals earning $75,000 and below are eligible for the full amount, along with couples making $150,000 and under.

It maxes out for individuals at $200,000 and couples at $400,000.

Previously, the program offered low-income families only some or no federal assistance because they earned too little. Now the vast majority of families can get the $3,000 or $3,600 annual benefit, depending on their child's age.

In addition to renewing the tax credits, Democrats are focusing their $3.5 trillion package on expanding the reach of Medicaid and Medicare, setting up paid and medical leave programs, instituting clean-energy measures to combat the climate emergency, and creating universal pre-K and tuition-free community-college programs among other measures.

Some Democratic lawmakers are seeking to salvage the child-tax-credit expansion. An architect of the expansion, Sen. Sherrod Brown of Ohio is pushing to maintain its broadened reach for as long as possible. Early research indicates the revamped child tax credit has lifted 3 million children out of poverty and slashed hunger in its first batch of payments.

"The CTC is one of the best tools we have to show people government is on their side and deliver meaningful results that nearly all families with children can feel and see in their everyday lives," a Brown representative said in a statement to Insider. "Sen. Brown believes we need to keep full refundability and extend the expansion of the credit because this has been the most pro-family program in a generation and is already changing lives."

Experts argue the credit's refundability is a critical part of ensuring it delivers the largest benefits to low-income parents.

"It's the most important piece in terms of reaching the families that need assistance raising their children the most and also in terms of racial equity," Seth Hanlon, a tax expert at the liberal-leaning Center for American Progress, told Insider. He noted the previous version of the $2,000 tax credit excluded 27 million children - most of whom were Black or Latino - from receiving some or all the money.

Axios reported on Tuesday that Sen. Joe Manchin of West Virginia might support less than half of the planned spending. That would be a major step down from a $3.5 trillion budget now being fleshed out, but all 50 Democratic senators must band together for the plan to clear the upper chamber.

Manchin and Sen. Kyrsten Sinema of Arizona, another centrist, say they will oppose a package that costs $3.5 trillion, triggering the ire of progressives.

The bulked-up child tax credit is a key Democratic priority, and Biden touted the measure Wednesday. "Everybody talks about my child tax credit - it is a tax cut for ordinary folks," he said at a labor-union event at the White House. "That's what it is."

Read the original article on Business Insider