Here's What You Need To Remember: However, in Biden’s original American Families Plan – a $2 trillion proposal concerning economic relief for American families – the increased credit was set to be extended until 2025, and possibly beyond.
The first of six Child Tax Credit (CTC) payments is scheduled to be sent out today. The payments, scheduled for each month from July until December, are slated to be sent to 36 million American households and will cost the government roughly $110 billion to administer. This is a steep price tag, but it is not the most expensive program implemented in the American Rescue Plan Act, the March 2021 legislation which paved the way for the advance CTC payments. The same bill set aside roughly $450 billion for the third round of stimulus checks, totaling $1400 apiece to all qualifying Americans.
The Child Tax Credit’s advocates have maintained it is worth the cost. There is no question that families have been uniquely affected by the negative consequences of the COVID-19 pandemic; the expenses of raising children are significant, and the projected benefits from the tax credit have fueled a movement to make it permanent. So far, Democratic Sens. Michael Bennet (D-Colo.), Sherrod Brown (D-Ohio) and Cory Booker (D-N.J.) have come out in favor, as have a handful of Democrats in the House of Representatives. These lawmakers have argued that, even after the pandemic ends, families should be certain to have a basic threshold of money to rely upon for child-rearing.
However, this movement has encountered pushback from fiscal conservatives. In April 2021, Republican Sens. Marco Rubio (R-Fla.) and Mike Lee (R-Utah) issued a statement lambasting the expanded Child Tax Credit for its “refundable” provision, enabling families to claim it even if they did not pay taxes.
The two senators compared the tax credit to a “universal basic income” program, warning that it would discourage work, although the link between cash handouts and unemployment has been criticized elsewhere and a number of universal basic income pilot programs have found that cash payments have little effect on willingness to work.
President Biden has not publicly advocated for the credit to be permanent. When promoting the proposal, his administration has made the argument that the increased spending, as well as the sending out of advance payments, was a measure designed to combat the pandemic, rather than a permanent economic assistance payment to poor families.
However, in Biden’s original American Families Plan – a $2 trillion proposal concerning economic relief for American families – the increased credit was set to be extended until 2025, and possibly beyond.
Trevor Filseth is a current and foreign affairs writer for The National Interest. This article is being reprinted for reader interest.