Will enough House Dems warm up to the Wyden-Smith tax bill?
Liberal lawmakers tell Once Upon a Hill that a return to the 2021 Child Tax Credit is worth fighting for.
The House Ways & Means Committee tomorrow morning is scheduled to markup a proposed tax bill by Chair Jason Smith (R-Mo.) and Senate Finance Chair Ron Wyden (D-Ore.) that would partially restore the enhanced Child Tax Credit congressional Democrats passed and President Joe Biden signed into law in 2021.
The markup comes as members from both parties in both chambers expressed dismay for different reasons at the potential return of the benefit responsible for lifting almost half of America’s kids out of poverty.
Senate Republicans called the tax provision too generous and indicated a preference for it to be restricted to fewer families. Democrats, for the most part, are on the opposite end of the spectrum: They fear the Wyden-Smith CTC leaves too many kids behind.
I spent most of the week talking and listening to members from across the House Democratic Caucus to get a sense of whether they were inclined to support the updated version of the Child Tax Credit.
But before I open my notebook, here’s what you should know about it:
The revised Child Tax Credit would extend to families with multiple children and be adjusted for inflation starting in 2024. Taxpayers would be able to use current- or prior-year income to calculate the CTC in 2024 and 2025.
But while the Wyden-Smith Child Tax Credit would be phased in to increase the refundable portion for the years 2023–2025, the Biden CTC, which cut poverty nearly in half, was fully refundable for the first time. As a result, 20 percent of children would remain excluded from the benefit this time around.
House Minority Leader Hakeem Jeffries (D-N.Y.) told reporters this morning that he was receiving feedback on the proposal from top Ways & Means Democrats, including Ranking Member Richie Neal of Massachusetts and Rep. Suzan DelBene of Washington, and House Appropriations Committee ranker Rosa DeLauro of Connecticut, who with DelBene authored the House version of the 2021 Child Tax Credit.
“In my preliminary assessment, it’s clear that the Child Tax Credit provisions do not go as far as they should relative to what President Biden and Democrats were successfully able to do in terms of the Child Tax Credit that was in the American Rescue plan, particularly as it related to monthly payments and refundability,” Jeffries said. “That said, some movement on the Child Tax Credit is clearly better than no movement.”
DeLauro, who came out early against the Wyden-Smith proposal and spent five minutes with me last week explaining why, told me yesterday she was still opposed after reading the legislative text.
“We’ve gone backwards,” she said. “We continue to pull the rug out from under working families, vulnerable families and middle-class families and we give millions of dollars to the biggest corporations in this country, some of whom do not pay any taxes.”
It’s not just leadership and DeLauro who have concerns about the new CTC proposal.
Congressional Progressive Caucus Chair Pramila Jayapal (D-Wash.) told me her members would be meeting today to discuss the tax package.
“We still have a need to make sure that some of the things that worked with Democrats and our Child Tax Credit are incorporated,” she said.
A spokesperson for the Progressive Caucus did not respond to a request for comment on the outcome of the meeting.
Rep. Steven Horsford (D-Nev.), who chairs the Congressional Black Caucus, placed blame for the children who slipped back into poverty after Congress failed to extend the Child Tax Credit beyond 2021 at the feet of congressional Republicans but said he was optimistic about the latest proposal.
A spokesperson for the center-left New Democrat Coalition said it didn’t have a comment on the tax deal at press time. Spokespeople for the Congressional Hispanic Caucus and Congressional Asian Pacific Caucus did not respond to a request for comment.
White House spokesperson Michael Kikukawa said in a statement to Once Upon a Hill this week that the administration looks forward to reviewing the full details of the Wyden-Smith agreement but stopped short of an explicit endorsement.
“[President Biden] remains committed to fighting for the full expanded Child Tax Credit,” Kikukawa said. “We appreciate Chairman Wyden and Chairman Smith’s work toward increasing the Child Tax Credit for millions of families and supporting hundreds of thousands of additional affordable homes.”
In addition to the Child Tax Credit proposal, the package also enhances the Low-Income Housing Tax Credit, a provision to expand the affordable housing supply. It would also add disaster tax relief to cover recent hurricanes, flooding, wildfires and the 2023 Ohio rail disaster, provisions Jeffries said he supported.
In addition to the Child Tax Cut and Low-Income Housing Tax Credit, the proposal includes several tax cuts the business community is lobbying for.
Businesses that are forced to borrow at higher interest rates to meet payroll and expand operations would receive expanded eligibility on their deductions. All businesses would be able to fully write off expenses for machines, equipment, and vehicles, too. Additionally, the small business expensing cap would increase to $1.29 million under the plan, up from the $1 million limit passed in the 2017 Trump tax cuts. And the bill would raise—for the first time since the 1950s—the cap for small businesses that subcontract labor to $1,000 from $600 and index it for inflation. For businesses with a footprint in the US and Taiwan, the proposal removes double taxation, a provision to make America more competitive with China. (The bill mostly pays for itself by accelerating the end of a COVID-era program designed to encourage employers to keep workers on their payroll.)
Senate Majority Leader Chuck Schumer (D-N.Y.) said on Tuesday he supports the bill, due in part to the Child Tax Credit provision and the China competitiveness policies. Sens. Sherrod Brown (D-Ohio) and Michael Bennet (D-Colo.), the original Senate sponsors of the 2021 Child Tax Credit, also support the Wyden-Smith plan.
Sen. Wyden previously said he would push for the bill’s passage ahead of the start of the tax filing season on January 29. But with the daylight between the parties on the CTC, it’s unlikely this self-imposed deadline will be met.
👋🏾 Hi, hey, hello! Welcome back to Once Upon a Hill, an independent newsletter bringing you fresh reporting and unique insights on congressional politics and how federal policy affects diverse communities. It’s Thursday, January 18, 2024 and that sound you hear is from the planes of all the members of Congress who skipped town ahead of another snowstorm.
In the Know
Politics
The Senate passed in a 77-18 vote a short-term extension to keep the government open through March while lawmakers negotiate full-year funding bills. Senators voted down two amendments from Republicans before final passage of the extension, known in Washington as a continuing resolution or “CR.” The 18 nays were all Republicans.
The House immediately took up the CR after the Senate, passing it by a 314-108 margin, with Democrats producing 207 votes despite serving in the minority party. With the business of funding the government ahead of the Friday night deadline, House Republican leadership canceled votes tomorrow so members could leave ASAP before that aforementioned snowstorm.
Sens. Michael Bennet and John Hickenlooper (D-Colo.), Reps. Jason Crow and Brittany Pettersen (D-Colo.) and Democratic Mayor Mike Johnston of Denver called on Congress to support the state’s communities that are receiving migrants from the southern border. In addition to other Colorado communities providing assistance to migrants, the lawmakers said the City of Denver alone spent over $38 million to meet the humanitarian needs of more than 37,000 migrant arrivals, including sheltering 4,500 migrants—many of whom are children.
Rep. Colin Allred trails Sen. Ted Cruz by two points in a new Emerson College Polling/Nexstar Media poll, placing the Dallas Democratic congressman in a statistical tie in his race to unseat the two-term Republican senator. Allred must first win a competitive primary on March 5 for the chance to face off with Cruz in the general election. Texas is one of two pickup opportunities for Senate Democrats and Florida as they defend a brutal map in hopes of hanging onto their two-seat majority.
Sen. John Fetterman (D-Pa.) endorsed Rep. Andy Kim (D-N.J.)’s candidacy in the US Senate election in New Jersey. Kim, a two-term member of Congress and first Democratic member of Korean descent, is challenging Sen. Bob Menendez (D-N.J.), who is currently under federal indictment on corruption charges. Fetterman has been one of Menendez’s most vocal critics and repeatedly called for his resignation.
The Democratic National Convention introduced the logo for the 2024 event. The convention to nominate President Biden for reelection will be held in August in Chicago. Republicans will hold their July nominating convention in Milwaukee.
President Biden made an unscheduled stop at a private home in Raleigh after an official visit to North Carolina to promote investments in high-speed internet (see more in the Policy section below). The Biden campaign said the president was sitting down with a local North Carolina family of an educator who had a significant amount of student loan debt canceled for a “kitchen table conversation” about the impact of his agenda. (He also made an unannounced stop at Cookout for a bacon cheeseburger, french fries and a Black & White milkshake.)
Policy
The House Energy and Commerce Committee held a hearing on name, image and likeness—a set of rules for US college athletes to profit from their identity—as it considers draft legislation that would make college at. Rep. Frank Pallone of New Jersey, the top Democrat on the committee, argued in his opening remarks that lawmakers should not only be working to preserve NIL rights but also establish health and safety protections and uphold college athletes’ right to organize.
The House Budget Committee held a markup of a bill to create a federal debt commission to address decades of deficit spending. Congressional Democrats have criticized the Republican-led plan as a backdoor gambit to cut Social Security, Medicare and Medicaid and are unlikely to support the bill House Budget Republicans passed out of committee following the markup.
President Biden traveled to North Carolina to announce $82 million in new funding to connect an additional 16,000 homes and businesses to high-speed internet. The administration says the state has received $3 billion from the American Rescue Plan and bipartisan infrastructure law, which has resulted in thousands of local manufacturing jobs and 885,000 households saving money on their internet bills every month.
Vice President Harris participated in a discussion on gun violence prevention today at the US Conference of Mayors’ Winter Meeting. She called the suggestion that you’re either in favor of the Second Amendment or you want to take everyone’s guns away a false choice: “I’m in favor of the Second Amendment,” she said to Democratic Mayor Quinton Lucas of Kansas City, who moderated the discussion. “But is it not reasonable that we would have an assault weapons ban understanding that assault weapons were literally designed to kill a lot of human beings quickly and our weapons of war are now placed on our streets in a civil society?”
The Justice Department released a damning 577-page report on its review of the response to the May 2022 mass shooting at Robb Elementary School in Uvalde, Texas. Attorney General Merrick Garland, who traveled to Uvalde to meet with some of the survivors and victims of the shooting, called the decision of officers to treat the shooter as a barricaded subject instead of an active shooter the most significant failure among several leadership, command and coordination mishaps.
Read All About It
“Why are voters so upset? Consider the Snickers bar.” by Paul Donovan: “A Snickers bar illustrates how humans don’t think about inflation rationally.”
“What the media gets wrong about the so-called border crisis” by James North: “The mainstream press’s dark warnings about a flood of migrants are underpinned by a staggering ignorance about where asylum seekers are coming from—and why they’re fleeing for their lives.”
“Donald Trump’s attempt to otherize Nikki Haley is a familiar tool from his playbook” by Caleb Ecarma: “The former president has sought similar ploys against Barack Obama and Kamala Harris.”
“Trump pocketed millions in foreign payments. Why won’t Senate Democrats investigate?” by Greg Sargent: “Jamie Raskin and House Democrats unearthed dynamite. But they can’t subpoena. Senate Democrats can. So—will they?”
“Mike Johnson’s predicament is looking awfully similar to Kevin McCarthy’s” by Eric Lutz: “Senate and House Republicans have put the House Speaker in a bind on border policy that could help cement his legislative legacy—but cost him the gavel.”
“When public health loses the public” by Pamela Paul: “What role may public health officials have played in fostering public distrust in them?”
“Leonard Leo’s dark money groups are targeting AIDS relief” by Melissa Gira Grant: “Conservative organizations want Republican lawmakers to block reauthorization of the President’s Emergency Plan for AIDS Relief, falsely claiming that it serves as a “slush fund” for abortion.”
“Electric car owners confront a harsh foe: Cold weather” by Emily Schmall and Jenny Gross: “In freezing temperatures, the batteries of electric vehicles can be less efficient and have shorter range, a lesson many Tesla drivers in Chicago learned this week.”
Related: “For truckers driving EVs, there’s no going back” by Shannon Osaka: “Electric trucks still make up only a tiny fraction of trucks on the road in the United States.”
“How the TV industry lost its nerve” by Peter Biskind: “The best shows of the last two decades were the product of unusual creativity and incredible risk. Too bad the TV industry has left those qualities behind.”
“Spotify dominates audio streaming, but where are the profits?” by Anne Steele: “The company has expanded beyond music to stay ahead but has struggled to make money.”
“In every power couple there’s a Taylor Swift and a Travis Kelce” by Callum Borchers: “Even wildly successful people can be outshined by higher-profile romantic partners.”
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See you tomorrow,
Michael