Democrats unveil a one-year plan to ship as much as $ three,600 per little one to households

House Democrats unveiled their plan on Monday to send up to $ 3,600 per child to families. A huge but temporary increase in household aid forecast by experts could lift millions out of poverty.

The proposal would further elaborate on President Joe Biden’s request for a $ 1.9 trillion increase in child tax credit under his Covid-19 relief legislation. An aide said the plan could change before it was officially released.

The proposal is $ 3,600 for children under 6 and $ 3,000 for children under 18 over a year. The money will be distributed by the IRS in monthly installments starting in July. Payments would expire for individuals earning more than $ 75,000 and couples earning more than $ 150,000.

The proposal would increase the amount of the child tax credit, which under current law provides for $ 2,000 for children under the age of 17 and is distributed annually.

Rep. Richard Neal, D-Mass., Chair of the House Ways and Means Committee, said in a statement that the pandemic “is driving families deeper and deeper into poverty and is devastating”.

“We’re making the child tax credit more generous, accessible, and paying out monthly,” said Neal. “This money will make the difference in a roof over your head or someone’s food on their table. This is how the tax code is supposed to work for those who need it most, and as long as I chair the Ways and Means Committee, you can expect from us. “

The proposal is expected to be included in Biden’s full $ 1.9 trillion relief plan, although it must meet certain technical criteria as Democrats push for a Congressional process that will allow them to spot a potential GOP -Filibuster to bypass the Senate

Biden said a push for a minimum wage of $ 15 could not be considered under parliamentary rules known as reconciliation.

While Republicans have criticized the $ 1.9 trillion plan for being too big, it’s possible the child tax credit increase could get at least some bipartisan support. Senator Mitt Romney, R-Utah, released his own plan on Thursday to provide households with even greater child support and permanent. Romney funded his plan in part by cutting other spending programs.

A Romney spokesman did not immediately respond to a request for comment on the Democrats’ plan. The White House also did not respond to a request for comment. White House spokeswoman Rosemary Boeglin said last week that the Biden administration wants to work with lawmakers to come up with an ongoing plan to increase support for families with children.

An increase in the amount of aid that the US distributes to families with children would align the country better with the amount of aid provided by other developed nations, which also generally have lower child poverty. The Covid pandemic has put the burden on families, left millions of people unemployed and closed schools across the country.

Biden’s agenda for economic aid – including increasing child tax credits and other measures – would cut the U.S. child poverty rate in half, according to the Center for Poverty and Social Policy at Columbia University.

Critics left and right

While plans to increase aid to households with children are largely backed by Democrats, Neal’s proposal has been technically criticized by progressives. After the Washington Post first reported the plan on Sunday, Matt Bruenig, an analyst on the left, wrote that “the administrative design here is a mess”.

Bruenig wrote that the plan was flawed by using last year’s tax information to determine the amount of a family’s monthly payment, even though their eligibility for the program is based on the current year.

“This will lead to * both * underpayments and overpayments. And the overpayments will trigger reclaims through surprising tax bills,” wrote Bruenig in a post on Twitter.

The plan is also likely to be criticized by Republicans who have insisted on downsizing and tightening the aid package.

A counterproposal by 10 Republican senators last month, including Romney and Sens. Susan Collins of Maine and Lisa Murkowski of Alaska, lowered the increase in the child tax credit.

Sens. Marco Rubio of Florida and Mike Lee of Utah, who supported efforts to increase child tax credits, also spoke out against Romney’s plan and suggested that GOP support might be limited. The two senators said they do not endorse support for families where parents are unemployed.

“We have long said that the child tax credit needs to be increased further to help working families. In the pandemic relief bill currently under consideration, we would support increasing the child tax credit to $ 3,500 and infants to $ 4,500.” said the two senators.

“However, we do not support converting the tax credit for children into what is known as ‘child benefit’, which is paid out to all parents as a universal basic income. This is not a tax break for working parents, but social assistance.” added.

Subscribe to CNBC Pro for the live TV stream, deep insights and analysis of how to invest during the next president’s term.

Related Articles