'Stimulus Checks' Forever? Biden Wants to Extend the Child Tax Credit

'Stimulus Checks' Forever? Biden Wants to Extend the Child Tax Credit

The increase laid out in the American Rescue Plan Act is temporary; it is set to expire at the end of the current filing period, next April. However, Biden has included the same increases in his American Families Plan.

 

Three months ago, on March 11, President Joe Biden signed the American Rescue Plan Act into law. The $1.9 trillion spending bill, intended to initiate Biden’s coronavirus economic recovery plan, included several groundbreaking measures—the largest and most important of which was the $450 billion stimulus measure, sending $1,400 checks to all U.S. adults (and dependents) making less than $75,000 per year.

Another significant piece of legislation within the American Rescue Plan concerned the Child Tax Credit, a payment intended to ease the expenses of parents. Before the Plan took effect, the tax credit was set at $2,000 per year; Biden raised it to $3,000 per year (a 50 percent increase) for older children, and $3,600 per year (80 percent) for younger ones.

 

The bill also provides for the payments to be broken down and sent out monthly, beginning on July 15 and continuing until December 15. Each month, one-twelfth of the total payment will be sent out in the form of a check; by December, half of the payments will have been distributed, and the other half can be claimed as a tax rebate when tax returns are filed in April 2022.

The increase laid out in the American Rescue Plan Act is temporary; it is set to expire at the end of the current filing period, next April. However, Biden has included the same increases in his American Families Plan, a separate $2 trillion recovery measure intended to help working families struggling during the pandemic. Per the American Families Plan, the Child Tax Credit will remain at its current level until 2025. Biden proudly tweeted that the benefit would remain in place for “years and years to come.”

At least, this is the general idea. The reality is more complicated; Republicans on Capitol Hill have balked at the Biden administration’s coronavirus recovery plans, which total roughly $6 trillion (including the $2 trillion already allocated in the American Rescue Plan Act). Desperate to cut spending, Republicans have threatened to filibuster Biden’s legislation—and the Senate parliamentarian effectively forbade Senate Majority Leader Chuck Schumer (D-NY) from invoking “reconciliation,” a process to pass filibuster-proof legislation, again.

With the looming threat of a filibuster, Schumer will need to gain the support of at least ten Republicans, none of whom have been inclined to support Biden’s proposals as stated. It is far more likely that the two sides will enter negotiations over the American Families Plan, and a compromise be reached on a lower level of spending. Whether the Child Tax Credit expansion will be a part of this plan remains to be seen.

Trevor Filseth is a current and foreign affairs writer for the National Interest.

Image: Reuters.