Littwin: It’s shocking, but Congress might pass a new and improved child tax credit

Believe it or not, there is a more than remote chance that, basically from nowhere, our dysfunctional, hyperpolarized Congress might actually do something right. And maybe — just maybe — do even more than one thing right.

Not entirely right, of course. Not even halfway right. But still, more right than anyone could have reasonably hoped.

You see, there is a bipartisan, bicameral, by-God compromise bill being put forward that would lift as many as 400,000 kids from poverty and offer significant assistance to 15 million more kids from low-income families by changing, and thus improving, the child tax credit law. 

It’s a far cry from the child tax credit plan that was passed with a one-year sunset as part of the 2021 COVID relief bill and that, in a single year, reduced child poverty by an astonishing 50%. But, despite the improvement, the new child tax credit — which was based on a bill co-authored by Sens. Michael Bennet and Sherrod Brown — was not renewed.

You can guess what happened. The old, regressive child tax credit — which actually penalizes poor families with more than one child — was reinstated. Child poverty, which had reached an all-time low, roared back. In fact, in a single year, it more than doubled.

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If this new bill doesn’t do as much as Bennet’s — and it doesn’t — it’s a start. Or at least that’s one way to look at it, particularly if you believe in the half-a-loaf theory of legislation.

And so when it’s announced that top legislators in both houses of Congress have agreed to a bipartisan compromise on a newly improved child tax credit bill — in tandem with reinstating some business tax cuts — we could put aside our cynicism, embrace the moment and then demand action.

Anyway, that’s what Bennet advises. And I’m inclined, although with some reservations, to agree.

“I’m heartened that there’s a bipartisan bill that will help 16 million kids,” Bennet told me Friday morning. “I’m heartened that 200,000 kids from Colorado will benefit. We still should have as our goal ending childhood poverty in America, in the richest country in the world. The costs of childhood poverty, to our children and to our country, are far too great.”

Bennet wants the full loaf, enough to feed every kid who might, in this wealthy nation, somehow be faced with missing a meal. Or to feed the mother who doesn’t eat at all so her children can. This happens. More than 13 million children, according to the USDA, faced hunger in 2022.

But as much as he wants a better bill, Bennet still strongly supports this one.

The argument is clear: Even if the 400,000 kids isn’t the 3 million — many of them Black and Hispanic — that the first bill lifted up, it’s still 400,000 who won’t escape poverty without it. And, under the new bill, a further 3 million poor children would get some aid. And that’s not nothing. 

And there’s the chance, I guess, that someday — say a day in which Donald Trump doesn’t become president again — a better bill could eventually emerge.

We know how difficult it is to pass any legislation these days. I mean, right-wing House Republicans, on Trump’s advice, are currently refusing to pass a bill to aid Ukraine, despite the nightmare scenario that would surely follow any decision to withhold desperately needed support. And that’s despite Joe Biden’s offer to meet Republican demands to link Ukraine aid to a serious proposal on dealing with the situation at the border.

It’s hard to wrap your mind around the idea that we would actually abandon Ukraine at this point — not when it’s fighting such a costly war against Vladimir Putin’s authoritarianism and in the service of democracy. 

But Putin, as you know, is Trump’s pal. And democracy is apparently, in MAGA world, just a sometimes thing. And we can never discount the politics behind the issue. Trump, whose main campaign issue seems to be immigration — and the bigotry he trades on by shamelessly calling undocumented immigrants “vermin” who are “poisoning the blood of our country” — doesn’t want a border deal. He knows that any deal would help Biden.

Still, Bennet believes that passing a Ukraine aid bill “is more likely than not.” He noted that though “the degree of difficulty is very high, the consequences of not supplying aid would be catastrophic.” I’d like to think he’s right, but I don’t know.

Meanwhile, Speaker-for-now Mike Johnson needed help from Democrats just to pass a continuing resolution that would prevent a government shutdown, and now there’s grumbling from his right-wing buddies that they might dump him the way they did Speaker-for-then Kevin McCarthy for similar crimes in the pursuit of comity. Is Johnson ready to risk his job for Ukraine? If he’s not, try to imagine what would happen.

It’s all hard. And yet.

Just after I spoke with Bennet came the news from the House Ways and Means Committee that it had passed the compromise bill by a whopping 40-3 vote. All Republicans voted for it. All but three House progressives on the committee — some of them reluctant to accept a compromise that doesn’t do enough for many of the poorest families in the country — voted for it.

That doesn’t mean the bill will get through the House. That doesn’t even guarantee it will get a floor vote. But we’re a lot closer to a new bill, a much needed new bill, than we were even days ago.

The present child tax credit law doesn’t allow poor families to receive much tax credit  for more than the first child. For many families, it doesn’t allow any credit at all. Meanwhile, upper-income families, who pay enough in taxes, get full credit for every child. If that seems upside down, that’s because it is.

The new bill would change that. It would allow families with more than one child to receive credit for each one. The tax credit is indexed to inflation, meaning that those who wouldn’t receive full credit initially could still see the amount of their tax credits increase over time.

Bennet’s bill did much more than that. It raised the credit for each kid from $2,000 to either $3,000 or $3,600 a month, depending on the children’s age. Under the bill, families received money each month instead of having to wait to file taxes the following year. Those who didn’t pay enough, or any, income tax still received the full credit. 

It relied on the notion, accepted in most Western democracies, that having more money is the surest way out of poverty. And it worked — until Democratic Sen. Joe Manchin refused, along with all Republicans, to vote to renew the bill.

Like the current bill, this new one relies, in part, on the conservative notion that the poor could be “disincentivized,” as they say, from working if they get assistance. It’s a myth. A Senate banking subcommittee, chaired by Bennet, showed that it was a myth — in Bennet’s words, “the myth is an insult to hard-working people” —and that, for some single mothers with children, the findings showed that the credits allowed them to work more.

The new bill does better. A mother of two working, say, part time in the food industry, and earning maybe $15,000, would see her child tax credit double. And if passing such a bill requires reinstating some business tax benefits — some of which most Democrats actually support — that’s what must be done.

Look, there is already a huge tax on being poor, and that goes beyond sales taxes and gas taxes and the other regressive taxes that everyone pays. If you’ve never been poor, you might not understand.

But shockingly, nearly everyone, right and left, on the House Ways and Means Committee understood it at least a little bit. I’d like to think that the huge majority gives us reason to hope the bill passes, even in a time when hope doesn’t come cheap.

Mike Littwin has been a columnist for too many years to count. He has covered Dr. J, four presidential inaugurations, six national conventions and countless brain-numbing speeches in the New Hampshire and Iowa snow. Sign up for Mike’s newsletter.

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