Still No Extension of Child Tax Credit for Low-Income Families

by Guest Blogger, 7/25/2003

As 25 million families begin receiving their checks from the IRS for the $400 per child increases in the child tax credit, House Democrats used a series of procedural floor votes on July 23 to bring attention to the fact that no progress has been made to extend the credit to low-income families.

The Senate-passed bill will cost $9.8 billion over 11 years and includes offsets (extension of U.S. customs service fees) for the cost of extending the credit. The House-passed bill includes other tax cuts, benefiting wealthier families, and costs $82 billion without offsets. Senate Republican leaders have also offered a compromise bill that would cost $50 billion (primarily by using the sunset gimmick on some provisions of the House-passed $82 billion bill). See the Center on Budget and Policy Priorities analysis.

In spite of calls on President Bush from both parties to intervene, neither a compromise nor a vote on the original Senate passed bill appears to be in the works. With the House leaving for its August recess last Friday, there will be no action as House leaders strongly dislike any kind of offset that "raises" taxes, and remain adamant about including tax cuts for wealthier families with the low-income child tax credit.

Low-income families should receive the child tax credit. However, given OMB’s recent report on the sharply increasing deficit for 2004, only a "clean" bill that extends the credit to low-income families and provides offsets is responsible. Further increases in the deficit due to more tax cuts will ensure that even more services and programs are cut in the future, wiping out the benefit of a child tax credit to low-income families by loss of other federal and state services. Low-income families will remain the losers.