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House Democrats Plan to Renew Biden’s $300 Monthly Aid to Families Up to 2025 in Social Spending Package

A new proposal from the House Democrats plans to renew the reconstructed child tax credit until 2025. This can potentially create a conflict with their fellows in the Senate who are considering shortening the extension of the $3.5 trillion social spending budget. 

The Democratic plan released last Friday night by the House Ways and Means Committee shares the same plans with President Joe Biden’s proposal presented in spring. The next four years’ bulked-up benefit will remain and the credit’s ability to be issued as monthly payments will be locked in for the majority of American families. 

The low-income families who don’t get enough to be obliged to pay taxes can also be allowed full refundability or to tap the entire benefit permanently. The bill also includes other benefits such as an expansion of Medicaid coverage, low-income housing tax credits, and prescription drug reforms authorizing the federal government to negotiate lower prices for seniors.

Read More: Installment of the Child Tax Credit Payment of $ 300 or $ 250 Will Arrive This Week.

Rep. Richard Neal of Massachusetts, chair of the Ways and Means panel shared in a statement:  “Taken together, these proposals expand opportunity for the American people and support our efforts to build a healthier, more prosperous future for the country.” 

The current child tax credit gives up to $300 monthly per child from 5 years old and below, or $3,600 per year. Families with children between 6 to 17 years old can receive $250 per month or $3,000 annually. 

The Democratic stimulus law in March changed the credit into a one-year monthly cash benefit, increasing its amount from $2,000. Individuals who earn $75,000 and below are qualified to receive full payments as well as couples earning $150,000 and below. 

On the other hand, individuals earning $200,000 and couples at $400,000 are excluded from the benefit. These thresholds remain the same in the House Democratic plan. 

However, the Senate Democrats are planning to extend until the presidential election year, 2024. The decision to make it fully refundable after that year is still undecided. They are trying to prevent overwhelming legislation with other top priorities such as a Medicare benefit expansion, medical and paid leave, and tuition-free community college.

This provision can cause a clash between the House and Senate Democrats due to the limited budget to fund this, similar to the conflict on Medicare benefits expansion or making federal subsidies for Affordable Care Act coverage permanent.

Read More: How Can You Increase Your Social Security Benefits?

The timeline of the House Democrats will authorize the benefit to expire together with the slate of tax cuts from the 2017 Republican tax law, and Congress will have to handle them at the same time. This will put some pressure on Republican lawmakers to support the child allowance renewal in exchange for the Democrats’ extension of the components of the GOP tax law.

Democrats are braced to manage the anti-poverty bill through reconciliation, which needs only a simple majority and creates the path to get around the unanimous Republican opposition. However, three defections can be allowed for the Democrats in the House and none in the Senate for the bill to pass.

The child tax credit renewal can still change as the House committees assemble their parts of the bill and Democrats negotiate the plan’s scope and size.

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