Coronavirus and Your Money

Republican Senators' Plan Drops the $3,000 or $3,600 Child Credit

A plan by 10 moderate GOP Senators omits Biden's proposal for a higher temporary child tax credit.

President Biden is calling for a number of family-friendly proposals in his American Rescue Plan, a $1.9 trillion stimulus relief package. One element in the plan that Democrats say would help reduce child poverty is his proposal to temporarily expand the child tax credit.

Presently, the child tax credit is worth $2,000 per dependent under the age of 17. Up to $1,400 of the child credit is refundable for some lower-income individuals with children. Biden wants to increase the credit for one year to $3,000 per child ($3,600 for a child under age 6), make it fully refundable and allow 17-year-old children to qualify.

A group of 10 moderate Senate Republicans who believe that Biden's stimulus package is too costly met with the president to discuss their $618 million plan. It calls for smaller stimulus checks for fewer individuals and less unemployment benefits for the jobless, among other things. But it drops Biden's proposal for higher child tax credits.

Democrats have shot down the $618 million plan as a nonstarter, mainly because it does not provide aid to state and local governments and its unemployment benefits are not robust enough. Also, many Democrats feel that now is the time to again go big on stimulus to help the economic recovery.

Yet the fact that Biden met with the group of 10 GOP Senators for two hours shows that he is still hoping for bipartisan support on a stimulus package. But if he can't get it, he may very well turn to budget reconciliation to allow legislation to pass the Senate with a majority vote instead of the usual 60 votes to avoid a filibuster. This tool, which is messy, subject to lots of restrictions and can only be utilized for certain items, was last used during Donald Trump's presidency to enact his signature tax law in late 2017.

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