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Biden, some Dems at odds over extending Child Tax Credit

WASHINGTON — President Joe Biden and some key Democratic lawmakers are at odds over how long to extend the expanded Child Tax Credit passed in March in the stimulus bill that boosts benefits, including to an estimated 400,000 or more children on Long Island.

Biden proposed extending the one-year tax credit through 2025 in his American Families Plan unveiled Wednesday, but House Ways and Means Committee chairman Richard Neal (D-Mass.) preempted him Tuesday with a bill that would, among other things, make the child tax credit permanent.

The debate over the tax credit comes as Biden tries to follow up on his $1.9 trillion stimulus package by reaching out to Republicans for support of his massive $2.3 trillion Build Back Better infrastructure plan and now his $1.8 trillion American Families Plan.

But Neal, House Appropriations Committee chair Rosa DeLauro (D-Conn.), Senate Finance Committee chairman Ron Wyden (D-Ore.) and many other Democrats are pushing to spend heavily on the social safety net while they still control the White House and Congress.

"The Child Tax Credit is a lifeline for families who have struggled throughout the pandemic. It will dramatically reduce child poverty here on Long Island and across the country," said Rep. Tom Suozzi (D-Glen Cove), a Ways and Means Committee member, in a statement.

"The pandemic exposed the inequities in our society and the need to make child care and the CTC a permanent part of U.S. policy," Suozzi said.

Asked why the Biden plan lets the child tax credit expire in 2025, White House spokeswoman Jen Psaki on Tuesday said it reflects lawmakers' different views and the cost.

"It's about a billion dollars a year to implement the Child Tax Credit, and certainly that is a part of the discussion that we expect to have with Congress," she said.

Expanding the Child Tax Credit and making it permanently fully refundable through 2025 would cost about $450 billion over the next 10 years, the most expensive of the proposals in Biden’s new plan, according to the nonpartisan Committee for a Responsible Federal Budget.

Biden proposed to pay for the expanded social services by raising the top tax bracket from 37% back to 39.6%, along with taxes on inheritances, capital income and carried interest.

The child tax credit was expanded by the American Rescue Plan passed in March. It boosted the tax credit from $2,000 to $3,000 for children ages 6 to 17 and to $3,600 for those under age 6. The plan makes the credit fully refundable and monthly, beginning in July.

The size of the tax credit phases out for heads of household making $112,500 and married couples making $150,000.

An analysis by House Ways and Means Committee’s Democrats estimates that Long Island families with children in poverty will receive about $3,900 to $4,100 a year on average from the expanded child tax credit. The analysis offered a congressional district by district breakdown.

In New York’s 1st District, where the U.S. Census Bureau estimates about 10% of children live in poverty, the tax credit is estimated to lift about 3,500 children out of poverty. About 70% of the children in the district would gain from the monthly child tax credit checks.

In the 2nd District, where 7% of children live in poverty, an estimated 3,900 children would be lifted out of poverty and some 70% of children would benefit from monthly credits or checks.

In the 3rd District, where about 6% of children are in poverty, the credit would raise about 3,700 children out of poverty about 56% of children would gain from monthly credits or checks.

And in the 4th District, where about 7% of children are in poverty, the credit would lift about 5,500 children out of poverty and two thirds of children would gain from monthly credit or checks.

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