Democrats in Congress have reintroduced a bill that would make the child tax credit (CTC) permanent and expand who is eligible. The bill, called the American Family Act, would also include a new feature: a $2,000 payment for newborn babies.
The CTC is a tax break that helps families with the costs of raising children. Under the American Rescue Plan, which was passed in 2021, the CTC was temporarily increased to $3,600 for children under 6 and $3,000 for children between 6 and 17. The CTC was also made fully refundable and paid in monthly installments.
However, these changes expired at the end of 2021. The American Family Act would restore the expanded CTC and make it permanent. It would also add a “baby bonus” of $2,000 for new parents in the month their child is born. This means that a family with a child born in January could receive up to $5,300 in the first year, before dropping to $3,600 in the following years.
The bill’s sponsors, Reps. Rosa DeLauro, Suzan DelBene and Ritchie Torres, said the CTC is a vital tool to reduce child poverty and provide economic security for American families.
“It was the largest tax cut for middle-class and working families in generations,” DeLauro said in a statement. “These monthly payments helped parents pay bills, keep healthy and nutritious food on the table, afford school clothes and supplies, pay for a music lesson or a new pair of cleats, or manage a mortgage or rent payment.”
“It lifted nearly 4 million children out of poverty in one year alone. It worked, and it is time we get it working for families and children once more,” she added.
The White House also supports extending the CTC as part of President Joe Biden’s Build Back Better agenda.
“That is why President Biden strongly believes that we should extend the new Child Tax Credit for years and years to come. That’s what he proposes in his Build Back Better Agenda,” the White House website states.
The CTC would be available in full for married couples earning up to $400,000 or individuals earning up to $200,000, and phase out above those income levels. According to CNET, the CTC was one of the most successful anti-poverty measures in recent history.
The bill has 204 co-sponsors in the House, but faces an uncertain fate in the Senate, where Democrats have a slim majority and need bipartisan support to pass most legislation. Some Republicans have criticized the CTC as a form of welfare that discourages work and encourages dependency. Others have proposed alternative ways to reform the CTC, such as making it conditional on work or reducing its size.
Relevant articles:
-Stimulus checks: Bill would reinstate $300 monthly child payments, pay $2k ‘baby bonus’, mlive.com, Jun. 26, 2023
-Congresswoman Proposes Expanded Child Tax Credit With $2,000 Baby Bonus Payment, 247wallst.com, Jun. 23, 2023
-Baby bonus a new twist in Democrats’ child tax credit push, rollcall.com, Jun. 20, 2023.